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Notice

Filings Under the Public Utility Holding Company Act of 1935, as amended (“Act”)

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Start Preamble June 28, 2002.

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 July 18, 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 July 18, 2002 the application(s) and/or declaration(s), as filed or as amended, may be granted and/or permitted to become effective.

National Grid Group plc, et al. (70-10025)

National Grid Group plc (“National Grid”), a registered holding company, 15 Marylebone Road, London NW1 5JD, United Kingdom; National Grid's registered holding company subsidiary National Grid USA (“Grid USA”) 01582; Grid USA's exempt holding company subsidiary, New England Power Company (“NEP”), both located at 25 Research Drive, Westborough, MA; and Vermont Yankee Nuclear Power Corporation (“Vermont Yankee”), an electric public utility subsidiary company of NEP, 185 Old Ferry Road, Brattleboro, VT 05703 (together, “Applicants”), have filed a declaration under sections 6(a), 7, and 12(d) of the Act and rules 44, 53, and 54 under the Act.

Vermont Yankee is a single purpose electric utility which operates a 540 MW nuclear powered electric generating plant (“Plant”) located in Vernon, Vermont. Vermont Yankee is owned by New England Power Company, a subsidiary of each of National Grid USA and National Grid Group plc, both registered holding companies, owns 23.89% of the outstanding common stock of Vermont Yankee.[1] Vermont Yankee's output is currently shared by the eight utility companies which own Vermont Yankee (“Sponsoring Utilities”).[2] The Sponsoring Utilities Start Printed Page 44650and Vermont Yankee currently operate under cost-of-service power contracts approved by the Federal Energy Regulatory Commission (“FERC”) and additional power contracts.

On August 15, 2001,Vermont Yankee entered into a purchase and sale agreement (“PSA”) with Entergy Nuclear Vermont Yankee, L.L.C. (“ENVY”), a subsidiary of Entergy, a registered holding company doing business in Texas, among other states. The PSA states that Vermont Yankee proposes to sell to ENVY substantially all of its assets, including the Plant. The PSA contemplates that ENVY will pay a purchase price of $180 million, subject to closing adjustments, and will assume Vermont Yankee's obligation for operating and decommissioning the Plant in exchange for the transfer at the closing of the sale (“Closing”) of:

1. Substantially all of the assets comprising the Plant,

2. The funds in Vermont Yankee's decommissioning trust (“Decommissioning Trust”), which had a fair market value of approximately $299.6 million as of September 30, 2001,[3]

3. Vermont Yankee's rights with respect to the funds held by the State of Vermont in connection with the Texas Low-Level Radioactive Waste Disposal Compact,

4. Certain human and site assets related to the Plant,

5. The Plant's switchyards and certain transmission assets, and office property located in Brattleboro, Vermont.

After the Closing, Vermont Yankee will continue its existence as a corporation. Its operations will be limited to its obligations under the PSA. The PSA contemplates that Vermont Yankee will purchase, from ENVY, 100% of the output of the Plant, based on the Plant's current configuration and capacity during the Plant's remaining licensed life[4] under a power purchase agreement (“PPA”) between Vermont Yankee and ENVY. Vermont Yankee will resell that output at wholesale to the Sponsoring Utilities under certain amendatory agreements (“Amendatory Agreements”) with each of the Sponsoring Utilities that modify existing power contracts and additional power contracts (collectively, “Power Contracts”) to reflect the proposed transaction. The Power Contracts also require the Sponsoring Utilities to pay Vermont Yankee's remaining unamortized net plant investment and Vermont Yankee's ongoing costs after Closing.[5]

In addition, the PSA contains a Security Agreement between Vermont Yankee and ENVY under which Vermont Yankee pledges its rights to the payments from the Sponsoring Utilities under the Power Contracts to ENVY, if Vermont Yankee defaults on power payments. Applicants state that the Security Agreement amounts to a pass-through to ENVY of Vermont Yankee's right to payment obligations that the Sponsoring Utilities will have under the Power Contracts. The Security Agreement provides that if Vermont Yankee fails to pay ENVY for power provided, ENVY has the right to receive the payments under the Power Contracts that the Sponsoring Utilities would otherwise pay to Vermont Yankee.

In preparation for the Closing it will be necessary for Vermont Yankee to redeem its outstanding first mortgage bonds and to repay the outstanding indebtedness under its current secured credit agreement. The cash required to satisfy these obligations will come from the cash proceeds to be paid by ENVY at the Closing.

Northeast Utilities, et al. (70-10033)

Northeast Utilities (“Northeast”), a registered holding company, 107 Selden Street, Berlin, CT 06037; Northeast's wholly owned direct public utility subsidiaries, The Connecticut Light and Power Company (“CP&L”), 107 Selden Street, Berlin, CT 06037, Western Massachusetts Electric Company (“WME”), 174 Brush Hill Avenue, West Springfield, MA 01090, and Public Service Company of New Hampshire (“PSC”), 1000 Elm Street, Manchester, NH 03101; and Vermont Yankee Nuclear Power Corporation (“Vermont Yankee”), an indirect electric public utility subsidiary of Northeast 185 Old Ferry Road, Brattleboro, VT 05703 (together, “Applicants”), have filed a declaration under sections 6(a), 7, and 12(d) of the Act and rules 44, 53, and 54 under the Act.

Vermont Yankee is a single purpose electric utility which operates a 540 MW nuclear powered electric generating plant (“Plant”) located in Vernon, Vermont. CP&L, WME, and PSC own an aggregate of 16.99% of the outstanding common stock of Vermont Yankee.[6] Vermont Yankee's output is currently shared by the eight utility companies which own Vermont Yankee (“Sponsoring Utilities”).[7] The Sponsoring Utilities and Vermont Yankee currently operate under cost-of-service power contracts approved by the Federal Energy Regulatory Commission (“FERC”) and additional power contracts.

On August 15, 2001, Vermont Yankee entered into a purchase and sale agreement (“PSA”) with Entergy Nuclear Vermont Yankee, L.L.C. (“ENVY”), a subsidiary of Entergy, a registered holding company doing business in Texas, among other states. The PSA states that Vermont Yankee proposes to sell to ENVY substantially all of its assets, including the Plant. The PSA contemplates that ENVY will pay a purchase price of $180 million, subject to closing adjustments, and will assume Vermont Yankee's obligation for operating and decommissioning the Plant in exchange for the transfer at the closing of the sale (“Closing”) of:

1. Substantially all of the assets comprising the Plant, Start Printed Page 44651

2. The funds in Vermont Yankee's decommissioning trust (“Decommissioning Trust”), which had a fair market value of approximately $299.6 million as of September 30, 2001,[8]

3. Vermont Yankee's rights with respect to the funds held by the State of Vermont in connection with the Texas Low-Level Radioactive Waste Disposal Compact,

4. Certain human and site assets related to the Plant,

5. The Plant's switchyards and certain transmission assets, and office property located in Brattleboro, Vermont.

After the Closing, Vermont Yankee will continue its existence as a corporation. Its operations will be limited to its obligations under the PSA. The PSA contemplates that Vermont Yankee will purchase, from ENVY, 100% of the output of the Plant, based on the Plant's current configuration and capacity during the Plant's remaining licensed life[9] under a power purchase agreement (“PPA”) between Vermont Yankee and ENVY. Vermont Yankee will resell that output at wholesale to the Sponsoring Utilities under certain amendatory agreements (“Amendatory Agreements”) with each of the Sponsoring Utilities that modify existing power contracts and additional power contracts (collectively, “Power Contracts”) to reflect the proposed transaction. The Power Contracts also require the Sponsoring Utilities to pay Vermont Yankee's remaining unamortized net plant investment and Vermont Yankee's ongoing costs after Closing.[10]

In addition, the PSA contains a Security Agreement between Vermont Yankee and ENVY under which Vermont Yankee pledges its rights to the payments from the Sponsoring Utilities under the Power Contracts to ENVY, if Vermont Yankee defaults on power payments. Applicants state that the Security Agreement amounts to a pass-through to ENVY of Vermont Yankee's right to payment obligations that the Sponsoring Utilities will have under the Power Contracts. The Security Agreement provides that if Vermont Yankee fails to pay ENVY for power provided, ENVY has the right to receive the payments under the Power Contracts that the Sponsoring Utilities would otherwise pay to Vermont Yankee.

In preparation for the Closing it will be necessary for Vermont Yankee to redeem its outstanding first mortgage bonds and to repay the outstanding indebtedness under its current secured credit agreement. The cash required to satisfy these obligations will come from the cash proceeds to be paid by ENVY at the Closing.

Energy East Corporation, et al. (70-10070)

Energy East Corporation (“Energy East”), a registered holding company, CMP Group, Inc. (“CMP”), an exempt holding company subsidiary of Energy East,[11] both located in Albany, NY 12212-2904, Central Maine Power Company (“Central Maine”), a wholly owned electric utility subsidiary company of CMP, 83 Edison Drive, Augusta, ME 04336, and Vermont Yankee Nuclear Power Corporation (“Vermont Yankee”), an indirect electric public utility subsidiary of Energy East, 185 Old Ferry Road, Brattleboro, VT 05703 (together, “Applicants”), have filed a declaration under sections 6(a), 7, and 12(d) of the Act and rules 44, 53, and 54 under the Act.

Vermont Yankee is a single purpose electric utility which operates a 540 MW nuclear powered electric generating plant (“Plant”) located in Vernon, Vermont. Central Maine owns 4.25% of the outstanding common stock of Vermont Yankee.[12] Vermont Yankee's output is currently shared by the eight utility companies which own Vermont Yankee (“Sponsoring Utilities”).[13] The Sponsoring Utilities and Vermont Yankee currently operate under cost-of-service power contracts approved by the Federal Energy Regulatory Commission (“FERC”) and additional power contracts.

On August 15, 2001,Vermont Yankee entered into a purchase and sale agreement (“PSA”) with Entergy Nuclear Vermont Yankee, L.L.C. (“ENVY”), a subsidiary of Entergy, a registered holding company doing business in Texas, among other states. The PSA states that Vermont Yankee proposes to sell to ENVY substantially all of its assets, including the Plant. The PSA contemplates that ENVY will pay a purchase price of $180 million, subject to closing adjustments, and will assume Vermont Yankee's obligation for operating and decommissioning the Plant in exchange for the transfer at the closing of the sale (“Closing”) of:

1. Substantially all of the assets comprising the Plant,

2. The funds in Vermont Yankee's decommissioning trust (“Decommissioning Trust”), which had a fair market value of approximately $299.6 million as of September 30, 2001,[14]

3. Vermont Yankee's rights with respect to the funds held by the State of Vermont in connection with the Texas Start Printed Page 44652Low-Level Radioactive Waste Disposal Compact,

4. Certain human and site assets related to the Plant,

5. The Plant's switchyards and certain transmission assets, and office property located in Brattleboro, Vermont.

After the Closing, Vermont Yankee will continue its existence as a corporation. Its operations will be limited to its obligations under the PSA. The PSA contemplates that Vermont Yankee will purchase, from ENVY, 100% of the output of the Plant, based on the Plant's current configuration and capacity during the Plant's remaining licensed life[15] under a power purchase agreement (“PPA”) between Vermont Yankee and ENVY. Vermont Yankee will resell that output at wholesale to the Sponsoring Utilities under certain amendatory agreements (“Amendatory Agreements”) with each of the Sponsoring Utilities that modify existing power contracts and additional power contracts (collectively, “Power Contracts”) to reflect the proposed transaction. The Power Contracts also require the Sponsoring Utilities to pay Vermont Yankee's remaining unamortized net plant investment and Vermont Yankee's ongoing costs after Closing.[16]

In addition, the PSA contains a Security Agreement between Vermont Yankee and ENVY under which Vermont Yankee pledges its rights to the payments from the Sponsoring Utilities under the Power Contracts to ENVY, if Vermont Yankee defaults on power payments. Applicants state that the Security Agreement amounts to a pass-through to ENVY of Vermont Yankee's right to payment obligations that the Sponsoring Utilities will have under the Power Contracts. The Security Agreement provides that if Vermont Yankee fails to pay ENVY for power provided, ENVY has the right to receive the payments under the Power Contracts that the Sponsoring Utilities would otherwise pay to Vermont Yankee.

In preparation for the Closing it will be necessary for Vermont Yankee to redeem its outstanding first mortgage bonds and to repay the outstanding indebtedness under its current secured credit agreement. The cash required to satisfy these obligations will come from the cash proceeds to be paid by ENVY at the Closing.

Start Signature

For the Commission by the Division of Investment Management, pursuant to delegated authority.

Jill M. Peterson,

Assistant Secretary.

End Signature End Preamble

Footnotes

1.  Connecticut Power & Light Company (“CP&L”), Western Massachusetts Electric Company (“WME”), and Public Service Company of New Hampshire (“PSC”), all public utility subsidiaries of Northeast Utilities (“Northeast”), a registered holding company, own an aggregate of 16.99% of the outstanding common stock of Vermont Yankee. Central Maine Power Company (“Central Maine”), an indirect electric utility subsidiary of Energy East Corporation (“Energy East”), a registered holding company, also owns 4.25% of the outstanding common stock of Vermont Yankee. Northeast and Energy East have filed applications S.E.C. File Nos. 70-10033 and 70-10070, respectively, regarding the sale of Vermont Yankee's assets and the Commission is issuing a notice of those filings simultaneously with the issuance of this notice.

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2.  The eight Sponsoring Utilities are: Central Vermont Public Service Corporation, New England Power Company, Green Mountain Power Corporation, CP&L, Central Maine, PSC, WME, and Cambridge Electric Light Company.

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3.  Although the PSA provides that Vermont Yankee may be required to fund fully or “top-off” the Decommissioning Trust, Applicants state that any “top-off” payment is contingent on several factors. First, if the value of the assets of the Decommissioning Trust at Closing meets or exceeds the Nuclear Regulatory Commission required minimum, no “top-off” payment will be required. Second, any “top-off” payment will be capped at $5.4 million, which represents the difference between the amount that would have been collected by Vermont Yankee before the recent settlement in a FERC proceeding relating to secondary purchaser issues ($16.8 million) and the amount that would be collected under that settlement ($11.4 million). Based on an analysis of all relevant factors at the time of execution of the PSA, Vermont Yankee does not anticipate that it will have to make a “top-off” payment at the Closing, although this expectation could change based on a change in circumstances.

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4.  The Plant's remaining licensed life ends March 21, 2012.

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5.  It is important for Vermont Yankee to remain in existence because the Power Contracts between Vermont Yankee and the Sponsoring Utilities are within the jurisdiction of the FERC and have been accepted by the FERC. Under the present Power Contracts, the Sponsoring Utilities may include Power Contract payments in the calculation of rates to their customers. If Vermont Yankee ceased to exist, and the Sponsoring Utilities were to enter into Power Contracts directly with ENVY, their ability to include those Power Contract payments in their rate calculations would be uncertain and a method to cover other ongoing Vermont Yankee costs, including unamortized net plant investment, and residual obligations under the PSA would be necessary.

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6.  New England Power Company, a subsidiary of each of National Grid USA and National Grid Group plc (“National Grid”), both registered holding companies, also owns 23.89% of the outstanding common stock of Vermont Yankee. Central Maine Power Company, an indirect electric utility subsidiary of Energy East Corporation (“Energy East”), a registered holding company, also owns 4.25% of the outstanding common stock of Vermont Yankee. National Grid and Energy East have filed applications, S.E.C. File Nos. 70-10025 and 70-10070, respectively, regarding the sale of Vermont Yankee's assets and the Commission is issuing a notice of those filings simultaneously with the issuance of this notice.

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7.  The eight Sponsoring Utilities are: Central Vermont Public Service Corporation, New England Power Company, Green Mountain Power Corporation, CP&L, Central Maine Power Company, PSC, WME, and Cambridge Electric Light Company.

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8.  Although the PSA provides that Vermont Yankee may be required to fund fully or “top-off” the Decommissioning Trust, Applicants state that any “top-off” payment is contingent on several factors. First, if the value of the assets of the Decommissioning Trust at Closing meets or exceeds the Nuclear Regulatory Commission required minimum, no “top-off” payment will be required. Second, any “top-off” payment will be capped at $5.4 million, which represents the difference between the amount that would have been collected by Vermont Yankee before the recent settlement in a FERC proceeding relating to secondary purchaser issues ($16.8 million) and the amount that would be collected under that settlement ($11.4 million). Based on an analysis of all relevant factors at the time of execution of the PSA, Vermont Yankee does not anticipate that it will have to make a “top-off” payment at the Closing, although this expectation could change based on a change in circumstances.

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9.  The Plant's remaining licensed life ends March 21, 2012.

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10.  It is important for Vermont Yankee to remain in existence because the Power Contracts between Vermont Yankee and the Sponsoring Utilities are within the jurisdiction of the FERC and have been accepted by the FERC. Under the present Power Contracts, the Sponsoring Utilities may include Power Contract payments in the calculation of rates to their customers. If Vermont Yankee ceased to exist, and the Sponsoring Utilities were to enter into Power Contracts directly with ENVY, their ability to include those Power Contract payments in their rate calculations would be uncertain and a method to cover other ongoing Vermont Yankee costs, including unamortized net plant investment, and residual obligations under the PSA would be necessary.

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11.  See Holding Co. Act Release No. 27224 (Aug. 31, 2000), approving CMP's exemption from registration under the Act.

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12.  New England Power Company, a subsidiary of each of National Grid USA and National Grid Group plc (“National Grid”), both registered holding companies, also owns 23.89% of the outstanding common stock of Vermont Yankee. Connecticut Power & Light Company (“CP&L”), Western Massachusetts Electric Company (“WME”), and Public Service Company of New Hampshire (“PSC”), all public utility subsidiaries of Northeast Utilities (“Northeast”), a registered holding company, own an aggregate of 16.99% of the outstanding common stock of Vermont Yankee. National Grid and Northeast have filed applications, S.E.C. File Nos. 70-10025 and 70-10033, respectively, regarding the sale of Vermont Yankee's assets and the Commission is issuing a notice of those filings simultaneously with the issuance of this notice.

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13.  The eight Sponsoring Utilities are: Central Vermont Public Service Corporation, New England Power Company, Green Mountain Power Corporation, CP&L, Central Maine Power Company, PSC, WME, and Cambridge Electric Light Company.

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14.  Although the PSA provides that Vermont Yankee may be required to fund fully or “top-off” the Decommissioning Trust, Applicants state that any “top-off” payment is contingent on several factors. First, if the value of the assets of the Decommissioning Trust at Closing meets or exceeds the Nuclear Regulatory Commission required minimum, no “top-off” payment will be required. Second, any “top-off” payment will be capped at $5.4 million, which represents the difference between the amount that would have been collected by Vermont Yankee before the recent settlement in a FERC proceeding relating to secondary purchaser issues ($16.8 million) and the amount that would be collected under that settlement ($11.4 million). Based on an analysis of all relevant factors at the time of execution of the PSA, Vermont Yankee does not anticipate that it will have to make a “top-off” payment at the Closing, although this expectation could change based on a change in circumstances.

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15.  The Plant's remaining licensed life ends March 21, 2012.

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16.  It is important for Vermont Yankee to remain in existence because the Power Contracts between Vermont Yankee and the Sponsoring Utilities are within the jurisdiction of the FERC and have been accepted by the FERC. Under the present Power Contracts, the Sponsoring Utilities may include Power Contract payments in the calculation of rates to their customers. If Vermont Yankee ceased to exist, and the Sponsoring Utilities were to enter into Power Contracts directly with ENVY, their ability to include those Power Contract payments in their rate calculations would be uncertain and a method to cover other ongoing Vermont Yankee costs, including unamortized net plant investment, and residual obligations under the PSA would be necessary.

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[FR Doc. 02-16832 Filed 7-2-02; 8:45 am]

BILLING CODE 8010-01-P