Notice is hereby given that the following filing(s) has/have been made with the Commission pursuant to provisions of the Act and rules promulgated under the Act. All interested persons are referred to the application(s) and/or declaration(s) for complete statements of the proposed transaction(s) summarized below. The application(s) and/or declaration(s) and any amendment(s) is/are available for public inspection through the Commission's Branch of Public Reference.
Interested persons wishing to comment or request a hearing on the application(s) and/or declaration(s) should submit their views in writing by March 26, 2002, to the Secretary, Securities and Exchange Commission, Washington, DC 20549-0609, and serve a copy on the relevant applicant(s) and/or declarant(s) at the address(es) specified below. Proof of service (by affidavit or, in the case of an attorney at law, by certificate) should be filed with the request. Any request for hearing should identify specifically the issues of facts or law that are disputed. A person who so requests will be notified of any hearing, if ordered, and will receive a copy of any notice or order issued in the matter. After March 26, 2002, the application(s) and/or declaration(s), as filed or as amended, may be granted and/or permitted to become effective.
Exelon Corporation, et al. (70-10050)
Exelon Corporation (“Exelon”), a registered holding company, and four Exelon subsidiary companies, Exelon Ventures Company, LLC (“Ventures”), Exelon Enterprises Company, LLC (“Enterprises”), Exelon Generation Company, LLC (“Genco”), and Exelon Energy Delivery Company, LLC (“Delivery”), all located at 10 South Dearborn Street, 37th Floor, Chicago, Illinois 60603 (collectively, “Applicants”) have filed an application-declaration (“Application”) under sections 9(a), 9(c), 10, 11(b), 12(c), 12(f), 32, 33, 34 and rules 42, 43, 53, 54, and 58 of the Act.
Applicants request the following authority for the period ending June 30, 2005 (“Authorization Period”):
Development and Administrative Activities
Exelon requests authority, directly or through subsidiaries, to engage in preliminary development activities (“Development Activities”) and administrative and management activities (“Administrative Activities”) related to exempt wholesale generators (“EWGs”), foreign utility companies (“FUCOs”), exempt telecommunications companies (“ETCs”), subsidiaries permitted under rule 58 of the Act (“Rule 58 Subsidiaries”), and energy-related subsidiaries operating outside the United States (“Energy-related Subsidiaries”) (collectively, “Permitted Nonutility Investments”). Exelon proposes to expend directly or through subsidiaries up to $500 million in the aggregate outstanding at any time during the Authorization Period on Development Activities.
Development Activities will be limited to due diligence and design review; market studies; preliminary engineering; site inspection; preparation of bid proposals, including the posting of bid bonds; application for required permits and/or regulatory approvals; acquisition of site options and options on other necessary rights; negotiation Start Printed Page 10777and execution of contractual commitments with owners of existing facilities, equipment vendors, construction firms, power purchasers, thermal “hosts,” fuel suppliers and other project contractors; negotiation of financing commitments with lenders and other third-party investors; and other preliminary activities that may be required in connection with the purchase, acquisition or construction of facilities or the securities of other companies. Development Activities will be designed to eventually result in a Permitted Nonutility Investment.
Exelon proposes a “revolving fund” concept for permitted Development Activities. To the extent a subsidiary for which amounts were expended for Development Activities becomes an EWG, FUCO, Rule 58 Subsidiary or Energy-related Subsidiary, the amount expended in development of that entity will no longer count against the limitation set for Development Activities but will then count against the limitation on the aggregate investment under rules 53 or 58, as modified by Commission order applicable to Exelon. The approval sought will not increase Exelon's authorized amount of aggregate investment in EWGs and FUCOs nor increase the permitted aggregate investment authorized under rule 58.
Incidental Acquisition of Nonutility Assets
Exelon requests authority to expend directly or through subsidiaries up to $500 million to construct or acquire energy assets that are incidental and related to its business as an electricity and energy commodities marketer and broker (“Energy Assets”) or to acquire the securities of one or more existing or new companies substantially all of whose physical properties consist or will consist of Energy Assets. Exelon's business as an electricity and energy commodities marketer and broker is conducted through Genco or Permitted Nonutility Investments. Energy Assets acquired will not include “utility assets” within the meaning of the Act. Energy Assets will not constitute additional investments in EWGs or FUCOs.
New Intermediate Subsidiaries for Internal Corporate Structuring
Exelon requests authority to acquire directly or through subsidiaries the securities of one or more corporations, trusts, partnerships, limited liability companies or other entities (“Intermediate Subsidiaries”) which would be created and organized exclusively for the purpose of acquiring, holding and/or financing or facilitating the acquisition of Permitted Nonutility Investments. These transactions will involve only internal organization and no authority is sought to acquire any new business not otherwise approved, authorized or exempted. Intermediate Subsidiaries may also engage in Development Activities and Administrative Activities.
Applicants state that there are several legal and business reasons for the use of Intermediate Subsidiaries in connection with making investments in Permitted Nonutility Investments. An Intermediate Subsidiary may be organized, among other things: (1) To facilitate the making of bids or proposals to develop or acquire an interest in any EWG, FUCO, ETC, or other nonutility company which, upon acquisition, would qualify as a Rule 58 Subsidiary or Energy-related Subsidiary; (2) after the award of such a bid proposal, to facilitate closing on the purchase or financing of such acquired company; (3) at any time subsequent to the consummation of an acquisition of an interest in any such company in order, among other things, to effect an adjustment in the respective ownership interests in such business held by the Exelon system and non-affiliated investors; (4) to facilitate the sale of ownership interests in one or more acquired Permitted Nonutility Investments; (5) to comply with applicable laws of foreign jurisdictions limiting or otherwise relating to the ownership of domestic companies by foreign nationals; (6) as a part of tax planning in order to limit Exelon's exposure to U.S. and foreign taxes; (7) to further insulate Exelon and its utility subsidiaries from operational or other business risks that may be associated with investments in nonutility companies; or (8) for other lawful business purposes.
Investments in Intermediate Subsidiaries may take the form of any combination of the following: (1) Purchases of capital shares, partnership interests, member interests in limited liability companies, trust certificates or other forms of voting or non-voting equity interests; (2) capital contributions; (3) open account advances without interest; (4) loans; and (5) guarantees issued, provided or arranged in respect of the securities or other obligations of any Intermediate Subsidiaries. Funds for any direct or indirect investment in any Intermediate Subsidiary will be derived from Exelon's available funds. No authority is sought for additional financing authority. To the extent that Exelon provides funds directly or indirectly to an Intermediate Subsidiary which are used to make an investment in an EWG, FUCO, Rule 58 Subsidiary or Energy-related Subsidiary, the amount of these funds will be included in Exelon's “aggregate investment” in such entities, as calculated in accordance with rules 53 or 58 of the Act, as applicable and as modified by Commission order applicable to Exelon.
Internal Corporate Reorganization of Existing Investments
Exelon and its subsidiaries request authority to undertake internal reorganizations of existing and permitted nonutility subsidiaries and businesses. For example, a nonutility subsidiary may be moved to be a subsidiary of a different parent company. The internal reorganizations will be accomplished through a contribution, sale, distribution, assignment or other transfer from one entity and the acquisition by another entity of the securities, assets or interests in such entities. The internal corporate reorganizations will not include any transfer of utility assets or the securities of any utility subsidiary. These transactions will involve only internal reorganizations, and no authority is sought to acquire any new business not otherwise approved, authorized or exempted under the Act.
Exelon and its subsidiaries request authority, to the extent not exempt, to sell or otherwise transfer (1) nonutility businesses, (2) the securities of current subsidiaries engaged in some or all of these businesses or (3) investments which do not involve a subsidiary (i.e. less than 10% voting interest) to a different subsidiary. And, to the extent approval is required, Exelon requests, on behalf of the subsidiaries, authority to acquire the assets of nonutility businesses, subsidiaries or other then existing investment interests. Alternatively, transfers of such securities or assets may be effected by share exchanges, share distributions or dividends followed by contribution of such securities or assets to the receiving entity. In the future, following its direct or indirect acquisition of the securities of new nonutility subsidiaries, Exelon seeks authority to transfer the securities or the assets of these new nonutility subsidiaries to other subsidiaries as described in this section. Exelon also seeks authority to liquidate or merge nonutility subsidiaries. Start Printed Page 10778
These internal transactions would be undertaken to eliminate corporate complexities, to combine related business segments for staffing and management purposes, to eliminate administrative costs, to achieve tax savings, or for other ordinary and necessary business purposes.
Energy-Related Subsidiaries Outside the United States
Exelon requests authority to engage through subsidiaries, direct or indirect, in energy-related activities outside the United States like those activities exempted in the United States under rule 58 of the Act. Exelon requests authority to conduct energy management services  and consulting services  anywhere outside the United States and to conduct energy marketing activities  in Canada and Mexico.
Ventures (or Enterprises, as appropriate) proposes to file a single consolidated quarterly report under rule 24 of all investments in subsidiaries, commencing with the quarterly report for the first full calendar quarter which ends at least 45 days following the date of the order for this Application. It is proposed that the combined report be in lieu of any separate notification on Form U-6B-2 that would otherwise be required with respect to exempt securities issuances.Start Signature
For the Commission, by the Division of Investment Management, pursuant to delegated authority.
Jill M. Peterson,
1. Expenditures in EWGs, FUCOs, Rule 58 Subsidiaries and Energy-related Subsidiaries, which count against the “aggregate investment” limitation of rule 53 or rule 58, as modified by Commission orders applicable to Exelon, will not count against the $500 million limitation for Development Activities.Back to Citation
2. If the Intermediate Subsidiary is merely a conduit, the aggregate investment will not “double count” as both the conduit investment and the investment in the operating company authorized as an EWG, FUCO, Rule 58 subsidiary or other approved investment.Back to Citation
3. Energy management services includes the marketing, sale, installation, operation and maintenance of various products and services related to energy management and demand-side management, including energy and efficiency audits; meter data management, facility design and process control and enhancements; construction, installation, testing, sales and maintenance of (and training client personnel to operate) energy conservation equipment; design, implementation, monitoring and evaluation of energy conservation programs; development and review of architectural, structural and engineering drawings for energy efficiencies, design and specification of energy consuming equipment and general advice on programs; the design, construction, installation, testing, sales, operation and maintenance of new and retrofit heating, ventilating, and air conditioning, electrical and power systems, alarm, security, access control and warning systems, motors, pumps, lighting, water, water-purification and plumbing systems, building automation and temperature controls, installation and maintenance of refrigeration systems, building infrastructure wiring supporting voice, video, data and controls networks, environmental monitoring and control, ventilation system calibration and maintenance, piping and fire protection systems, and design, sale, engineering, installation, operation and maintenance of emergency or distributed power generation systems, and related structures, in connection with energy-related needs; and the provision of services and products designed to prevent, control, or mitigate adverse effects of power disturbances on a customer's electrical systems.Back to Citation
4. Consulting services, for energy- and gas-related matters for associate and nonassociate companies as well as for individuals, includes technical and consulting services involving technology assessments, power factor correction and harmonics mitigation analysis, meter reading and repair, rate schedule design and analysis, environmental services, engineering services, billing services (including consolidation or centralized billing, bill disaggregation tools and bill inserts), risk management services, communications systems, information systems/data processing, system planning, strategic planning, finance, general management consulting including training activities, feasibility studies, and other similar related services.Back to Citation
5. Energy marketing means the brokering and marketing of electricity, natural gas and other energy commodities, as well as providing incidental, related services, such as fuel management, storage and procurement.Back to Citation
[FR Doc. 02-5547 Filed 3-7-02; 8:45 am]
BILLING CODE 8010-01-P