File No. 70-8953
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
__________________________________________
PRE-EFFECTIVE AMENDMENT NO. 3 TO
FORM U-1
APPLICATION AND DECLARATION
UNDER THE
PUBLIC UTILITY HOLDING COMPANY ACT OF 1935
__________________________________________
TUC HOLDING COMPANY
Energy Plaza
1601 Bryan Street
Dallas, Texas 75201
__________________________________________
(Name of companies filing this statement and
address of principal executive offices)
None
__________________________________________
(Name of top registered holding company
parent of each applicant or declarant)
Robert A. Wooldridge, Esq. Erle Nye
Worsham, Forsythe & President and Chief Executive
Wooldridge, L.L.P. Texas Utilities Company
Energy Plaza, 30th Floor Energy Plaza
1601 Bryan Street 1601 Bryan Street
Dallas, Texas 75201 Dallas, Texas 75201
__________________________________________
(Name and address of agents for service)
The Commission is requested to mail copies of
all orders, notices and communications to:
Douglas W. Hawes, Esq.
LeBoeuf, Lamb, Greene & MacRae, L.L.P.
125 West 55th Street
New York, New York 10019-4513
TUC Company hereby amends its Application/Declaration on
Form U-1 (File No. 70-8953) for the purpose of amending Items
1.A.1 and 2, 3.1.c., 3.2.b, 4.c and 6 as set forth below. In all
other respects, the Application/Declaration as previously filed
and amended will remain the same.
1. Items 1.A.1 and 2 are amended and restated as follows:
1. TUC
TUC was organized in 1945 and is currently a public utility
holding company exempt from all provisions of the Act except
Section 9(a)(2) by order of the Commission under Section
3(a)(1).F<1> TUC owns all of the issued and outstanding
common stock of two public utility companies as defined under the
Act: (i) Texas Utilities Electric Company ("TU Electric"), a
Texas corporation engaged in the generation, purchase,
transmission, distribution and sale of electric energy in the
north central, eastern and western parts of Texas, an area with a
population estimated at 5,890,000, and (ii) Southwestern Electric
Service Company ("SESCO"), a Texas corporation engaged in the
purchase, transmission, distribution and sale of electric energy
in ten counties in the eastern and central parts of Texas with a
population estimated at 126,900. At December 31, 1996, TU
Electric and SESCO provided utility service to approximately
2,432,135 customers. TU Electric and SESCO are each subject to
regulation as a public utility with respect to retail electric
rates and other matters by the Public Utility Commission of Texas
(the "PUCT") and by certain municipalities with regard to their
rates. In addition, TU Electric is subject to regulation by the
Nuclear Regulatory Commission (the "NRC") under the Atomic Energy
Act of 1954, as amended, in connection with its ownership of the
Comanche Peak nuclear generating facility.
____________________
F<1> Texas Utilities Company, HCAR No. 9786 (April 5, 1950);
Texas Utilities Company, HCAR No. 25826 (June 15, 1993).
TUC's non-utility subsidiaries, all of which are Texas
corporations unless otherwise indicated, are as follows:
a. Texas Utilities Australia Pty. Ltd., an
Australian limited liability company ("TU Australia") in 1995
acquired the common stock of Eastern Energy Limited, a foreign
utility company as defined in Section 33 of the Act, which is
engaged in the purchase, distribution and sale of electric energy
to approximately 481,000 customers in the area of Melbourne,
Australia. Eastern Energy is subject to regulation by the Office
of the Regulator General of the State of Victoria;
b. Texas Utilities Fuel Company ("Fuel Company")
owns a natural gas pipeline system, acquires, stores and delivers
fuel gas and provides other fuel services at cost for the
generation of electric energy by TU Electric;
c. Texas Utilities Mining Company owns, leases
and operates fuel production facilities for the surface mining
and recovery of lignite at cost for the generation of electric
energy by TU Electric;
d. Texas Utilities Services Inc. ("TU Services")
provides financial, accounting, information technology, customer
service, procurement, personnel and other administrative services
at cost to TUC system companies. TU Services acts as transfer
agent, registrar and dividend paying agent with respect to the
common stock of TUC and the preferred stock and preferred
securities of TU Electric, and as agent for participants under
TUC's Automatic Dividend Reinvestment and Common Stock Purchase
Plan;
e. Texas Utilities Properties Inc. owns, leases
and manages real and personal properties, primarily TUC's
corporate headquarters;
f. Texas Utilities Communications Inc., a
Delaware corporation ("TU Communications"), was organized to
provide access to advanced telecommunications technology,
primarily for the TUC system's expected expansion of the energy
services business;
g. Basic Resources Inc. was organized for the
purpose of developing natural resources, primarily energy sources
and other business opportunities; and
h. Chaco Energy Company is a New Mexico
corporation which currently leases extensive coal reserves in
that State.
The common stock, without par value, of TUC ("TUC
Common Stock") is listed on the New York Stock Exchange ("NYSE"),
the Chicago Stock Exchange and the Pacific Stock Exchange. As of
February 28, 1997, there were 224,602,557 shares of TUC Common
Stock outstanding.
For the year ended December 31, 1996, TUC's
operating revenues on a consolidated basis were approximately
$6.55 billion, of which approximately $6.08 billion was derived
from TU Electric's and SESCO's electric operations. Consolidated
assets of TUC and its subsidiaries at December 31, 1996 were
approximately $21.4 billion, of which approximately $18.9 billion
consists of identifiable utility property, plant and equipment.
A more detailed summary of information concerning
TUC and its subsidiaries is contained in TUC's Annual Report on
Form 10-K for the year ended December 31, 1995, and TUC's
Quarterly Reports on Form 10-Q for the quarters ended March 31,
196, June 30, 1996 and September 30, 1996 which are incorporated
herein by reference as Exhibit H-1, H-3, H-5 and H-7,
respectively.
2. ENSERCH
ENSERCH, an integrated company focused on natural gas,
is the successor to a company organized in 1909 for the purpose
of providing natural-gas service to north Texas. Through its
Lone Star Gas Company division ("Lone Star"), ENSERCH is a gas
utility company that purchases and distributes natural gas to
over 1.3 million residential, commercial, industrial and
electric-generation customers in approximately 550 cities and
towns, including the Dallas/Fort Worth Metroplex. Lone Star is
subject to regulation with respect to rates charged to customers
for gas delivered outside incorporated cities and towns and with
respect to certain other corporate matters by the Texas Railroad
Commission (the "Railroad Commission"). Rates within
incorporated cities and towns in Texas are subject to the
original jurisdiction of the local city council with appellate
review by the Railroad Commission. Lone Star also provides
consulting services with respect to gas distribution.
ENSERCH's non-utility operations are as follows:
a. Enserch Exploration, Inc. ("EEX"), 83.4% of
whose outstanding common stock is currently directly or
indirectly owned by ENSERCH, is engaged in the exploration for,
and the development, production and sale of, natural gas and
crude oil. Pursuant to the terms of the Preliminary Merger and
the Distribution (as described below), EEX will not become part
of the TUC holding company system;
b. Lone Star Energy Company ("LSEC"), a Texas
corporation and a wholly owned subsidairy of ENSERCH, is engaged
in the compressed natural gas business and owns and operates four
thermal energy plants providing heating and cooling to
institutional customers. LSEC's wholly owned subsidiary, Lone
Star Plant Operations, Inc. ("LSEPO") operates and maintains,
under long term contracts, three cogeneration facilities. Prior
to the consummation of the Mergers, LSEC will be liquidated and,
pursuant to the terms of the Preliminary Merger and the
Distribution (as described below), LSEPO, the successor to EEX,
will be spun-off such that neither LSEC nor LSEPO will become
part of the TUC holding company system;
c. Lone Star Pipeline Company, a division of
ENSERCH, is engaged in owning and operating interconnected
natural-gas transmission lines, underground storage resevoirs,
compressor stations and related properties, all within Texas.
Lone Star Pipeline is regulated with respect to gas
transportation rates by the Railroad Commission;
d. Enserch Processing, Inc., a subsidiary of
ENSERCH, is engaged in the gathering and processing of natural
gas for the recovery of natural gas liquids;
e. Enserch Energy Services, Inc., a wholly-owned
subsidiary of ENSERCH, is a marketer of natural gas and natural
gas services primarily in the northeast, midwest and west coast;
f. Enserch Development Corporation is a division
of ENSERCH which is engaged in development activities relating to
independent electric power generation projects, and;
g. Fleet Star of Texas, L.C. ("Fleet Star") and
TRANSTAR Technologies, Inc. ("TRANSTAR"), both of which are 50%
owned by ENSERCH, are engaged in compressed natural gas
businesses. Fleet Star owns public natural gas fueling stations
and TRANSTAR provides turnkey natural gas vehicle conversions and
related services.
The common stock, currently par value $.01 per share,
of ENSERCH ("ENSERCH Common Stock")is listed on the NYSE, the
Chicago Stock Exchange and the London Stock Exchange. As of
December 31, 1996, there were 70,280,262 shares of ENSERCH Common
Stock outstanding.
For the year ended December 31, 1996, ENSERCH's
operating revenues on a consolidated basis were approximately
$2.1 billion, of which approximately $895 million was
attributable to natural gas distribution activities and
approximately $331 million to oil and gas exploration and
production. Consolidated assets of ENSERCH and its subsidiaries
at December 31, 1996 were $3.7 billion, of which approximately
$655 million consists of gas distribution property, plant,
equipment and other identifiable assets and $1.9 billion consists
of oil and gas exploration and production property, plant and
equipment and other identifiable assets.
A more detailed summary of information concerning
ENSERCH and its subsidiaries is contained in ENSERCH's Annual
Report on Form 10-K for the year ended December 31, 1995 and
ENSERCH's Quarterly Reports on Form 10-Q for the quarters ended
March 31, 1996, June 30, 1996 and September 30, 1996 which are
incorporated herein by reference as Exhibits H-2, H-4, H-6 and
H-8 respectively.
2. Item 2 is amended and restated as follows:
The fees, commissions and expenses of the Company
expected to be incurred, directly or indirectly, in connection
with the transactions described above are estimated as follows:
Commission filing fee for the
Joint Proxy/Registration Statement
on Form S-4 $3,412,959.40
Stock Exchange Listing Fees 880,000.00
Legal Fees 7,900,000.00
Investment Banker Fees 21,075,000.00
Accounting Fees 465,000.00
Miscellaneous, including consulting,
proxy solicitation and general merger
expenses 3,500,000.00
Total $37,232,959.40
3. The second paragraph of Item 3.1.c is amended and restated
as follows:
As set forth in Item 2 of this Application/Declaration,
TUC and ENSERCH together expect to incur a combined total of
approximately $37.2 million in fees, commissions and expenses in
connection with the Mergers. By contrast, Cincinnati Gas &
Electric Company and PSI Resources incurred $47.12 million in
fees in connection with their reorganization as subsidiaries of
CINergy and Northeast Utilities incurred $46.5 million in fees
and expenses in connection with its acquisition of Public Service
of New Hampshire -- which amounts were all approved as reasonable
by the Commission. See CINergy, HCAR No. 26146 (Oct. 21, 1994);
Northeast Utilities, HCAR No. 25548 (June 3, 1992).
4. The second paragraph of Item 3.2.b is amended and restated
as follows:
TUC and ENSERCH estimate that the nominal dollar value
of synergies resulting from the Mergers will be not less than
$850 million over the first ten year period after consummation of
the MergersF<2> which will enhance both the gas system and
the electric system and lead to more efficient and economical
utility operations.F<3> The parties continue to explore and
refine which areas of their operations will be the source of such
synergies following the Mergers. At this point in time, it is
expected that the savings amount mentioned above will largely
result from the fact that the service territories of TUC and
ENSERCH overlap in various areas and therefore the Company will
be able to streamline many operations when it functions as a
single system, such as: (i) meter reading operations - TUC and
ENSERCH currently maintain separate meter reading operations and
as a result of their overlapping territory, these operations can
be combined into a single, more efficient system; (ii) meter
repair and testing facilities - TUC and ENSERCH as a combined
entity will be able to organize these operations into a single
more economical operation; (iii) billing systems - the
combination of the separate TUC and ENSERCH billing systems will
allow the two companies to capture synergy savings in this area;
(iv) computer systems - the combined TUC system will need fewer
computers and back-up computers than TUC and ENSERCH operating
separately; in fact the TUC system has excess capacity and it is
expected that ENSERCH can be added to the TUC system such that it
is utilized more efficiently, resulting in savings to the
combined system; (v) customer service operations - TUC and
ENSERCH both currently have call centers located in Dallas and
Waco, Texas and following the Mergers, the Company will only
require one call center in both cities; and (vi) emergency
restoration coordination - the Company should be able to respond
more quickly and efficiently to distribution interruptions with a
combined work force. Also included in the savings number are
administrative savings that are expected to result from TU
Services' provision of corporate services such as accounting,
finance and human resource management for the ENSERCH, which
should both allow the combined companies to obtain these services
at an overall lower cost and permit more efficient use of TU
Services' existing operations. Other general savings are also
expected to result from the Mergers.
____________________
F<2> The before tax present value of this synergies value is $505
million.
F<3> WPL Holdings, Inc., HCAR No. 25377 (Sept. 18, 1991) ("Thus,
in reviewing an application under this Section [10(c)(2)],
the Commission may recognize not only benefits resulting
from combination utility assets, but also financial and
organizational economies and efficiencies.")
5. Item 4.c is amended and restated as follows:
On November 29, 1996, the NRC issued an order relating to
the Mergers, which order is filed herewith as Exhibit D.3. Other
than the approval of the Commission under the Act and as
previously set forth, no other federal regulatory entity must
approve the Mergers. However, under the Merger Agreement,
consummation of the Mergers is conditioned upon consummation of
the Distribution and receipt of a ruling from the Internal
Revenue Service (the "IRS") to the effect that the Distribution
will result in no taxable gain to ENSERCH or its shareholders.
On February 28, 1997, the IRS issued such ruling.
6. Item 6 is amended and restated as follows:
1. Exhibits
A-1 Restated Articles of Incorporation of the Company
(filed as Annex VIII to the Registration Statement
on Form S-4 on September 20, 1996 (Registration
No. 333-12391), and incorporated herein by
reference).
A-2 Bylaws of the Company (filed as Annex IX to the
Registration Statement on Form S-4 on
September 20, 1996 (Registration No. 333-12391),
and incorporated herein by reference).
B-1 Amended and Restated Agreement and Plan of Merger
(filed as Annex I to the Registration Statement on
Form S-4 on September 20, 1996 (Registration No.
333-12391), and incorporated herein by reference).
C-1 Registration Statement of the Company on Form S-4
(filed on September 20, 1996 (Registration No.
333-12391) and incorporated herein by reference).
C-2 Joint Proxy Statement and Prospectus of TUC and
ENSERCH (included in Exhibit C-1).
D-1 Letter of the Railroad Commission of Texas
(previously filed).
D-2 Affidavit of Robert M. Spann (previously filed).
D-3 Order of the Nuclear Regulatory Commission.
E-1 Map of service areas of TU Electric, SESCO and
ENSERCH. (previously filed).
F-1 Opinion of counsel.
F-2 Past-tense opinion of counsel (to be filed by
amendment).
G-1 Opinion of Barr Devlin & Co. Incorporated (filed
as Annex III to the Registration Statement on Form
S-4 on September 20, 1996 (Registration No. 333-
12391), and incorporated herein by reference).
G-2 Opinion of Morgan Stanley & Co. Incorporated
(filed as Annex III to the Registration Statement
on Form S-4 on September 20, 1996 (Registration
No. 333-12391), and incorporated herein by
reference).
H-1 Annual Report of TUC on Form 10-K for the year
ended December 31, 1995 (filed on March 5, 1996
(File No. 1-3591) and incorporated herein by
reference.
H-2 Annual Report of ENSERCH on Form 10-K for the year
ended December 31, 1995 (filed on March 27, 1996
(File No. 1-3183) and incorporated herein by
reference.
H-3 TUC Quarterly Report on Form 10-Q for the quarter
ended March 31, 1996 (filed on May 15, 1996 (File
No. 1-3591) and incorporated herein by reference.
H-4 ENSERCH Quarterly Report on Form 10-Q for the
quarter ended March 31, 1996 (filed on May 14,
1996 (File No. 1-3183) and incorporated herein by
reference.
H-5 TUC Quarterly Report on Form 10-Q for the quarter
ended June 30, 1996 (filed on August 8, 1996 (File
No. 1-3591) and incorporated herein by reference.
H-6 ENSERCH Quarterly Report on Form 10-Q for the
quarter ended June 30, 1996 (Filed on August 12,
1996 (File No. 1-3183) and incorporated herein by
reference.
H-7 TUC Quarterly Report on Form 10-Q for the quarter ended
September 30, 1996 (filed on November 8, 1996 (File No.
1-3591) and incorporated herein by reference.
H-8 ENSERCH Quarterly Report on Form 10-Q for the quarter
ended September 30, 1996 (filed on November 14, 1996
(File No. 1-3183) and incorporated herein by reference.
B. Financial Statements
FS-1 TUC Holding Company Unaudited Pro Forma Condensed
Consolidated Balance Sheets as of December 31,
1995 and June 30, 1996 (see Registration Statement
on Form S-4 of TUC (Exhibit C-1 hereto) at p. 82-
83).
FS-2 TUC Holding Company Unaudited Pro Forma Condensed
Consolidated Statements of Income for the year
ended December 31, 1996 and the six months ended
June 30, 1996. (See Registration Statement on
Form S-4 of TUC (Exhibit C-1 hereto) at pp. 84-
85).
FS-3 TUC Consolidated Balance Sheet as of December 31,
1996 (see Annual Report of TUC on Form 10-K for
the year ended December 31, 1995 (Exhibit H-1
hereto).
FS-4 TUC Consolidated Statements of Income for its last
three fiscal years (see Annual Report of TUC on
Form 10-K for the year ended December 31, 1995
(Exhibit H-1 hereto).
FS-7 ENSERCH Consolidated Balance Sheet as of
December 31, 1995 (see Annual Report of ENSERCH on
Form 10-K for the year ended December 31, 1995
(Exhibit H-2 hereto).
FS-8 ENSERCH Consolidated Statement of Income for its
last three fiscal years (see Annual Report of
ENSERCH on Form 10-K for the year ended
December 31, 1995 (Exhibit H-2 hereto).
SIGNATURE
Pursuant to the requirements of the Public Utility
Holding Company Act of 1935, the undersigned company has duly
caused this application and declaration to be signed on its
behalf by the undersigned thereunto duly authorized.
TUC HOLDING COMPANY
By: /s/ H. Jarrell Gibbs
Name: H. Jarrell Gibbs
Title: President
Date: March 10, 1997
WORSHAM, FORSYTHE & WOOLDRIDGE, L.L.P.
Attorneys and Counselors at Law
Energy Plaza
1601 Bryan Street, 30th Floor
Dallas, Texas 75201
Telephone (214) 979-3000
Fax (214) 880-0011
March 10, 1997
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
Ladies and Gentlemen:
This opinion is furnished to the Securities and Exchange Commission
(the "Commission") in connection with the filing with the Commission of the
Application/Declaration on Form U-1 (File 70-8953) (the "Application") of TUC
Holding Company (the "Company") under the Public Utility Holding Company Act of
1935, as amended (the "Act"). The Application requests that the Commission issue
an order authorizing the acquisition (the "Acquisition") by the Company of all
of the issued and outstanding shares of common stock of (i) Texas Utilities
Company ("TUC"), a Texas corporation and a holding company currently exempt from
all provisions of the Act (other than section 9(a)(2)) under section 3(a)(1) by
order of the Commission and (ii) ENSERCH Corporation ("ENSERCH"), a Texas
corporation which, among other things, operates as a gas utility company (as
defined in section 2(a)(4) of the Act) in the State of Texas. TUC currently
holds all of the issued and outstanding shares of common stock of two electric
utility companies (as defined in section 2(a)(3) of the Act) operating as such
within the State of Texas. We have acted as general counsel for TUC and the
Company with regard to the Acquisition.
In connection with this opinion, we have examined originals or copies
certified or otherwise identified to our satisfaction of such corporate records
of the Company, TUC and ENSERCH, certificates of public officials, certificates
of officers and representatives of the Company, TUC and ENSERCH, and other
documents as we have deemed necessary in order to render the opinions
hereinafter set forth.
In such examination, we have assumed the genuineness of all
signatures, the authenticity of all documents submitted to us as originals and
the conformity to the original documents of all documents submitted to us as
copies. As to any facts material to our opinion, we have, when relevant facts
were not independently established, relied upon the aforesaid agreements,
instruments, certificates and documents.
The opinions expressed below with respect to the Acquisition described
in the Application are subject to the following further assumptions and
conditions:
a. The Acquisition shall have been duly authorized and
approved, to the extent required by the governing corporate documents
and applicable state laws, by the Board of Directors and shareholders
of the Company, TUC and ENSERCH.
b. All required approvals, authorizations, consents,
certificates, rulings and orders of, and all filings and registrations
with, all applicable federal and state commissions and regulatory
authorities with respect to the Acquisition shall have been obtained or
made, as the case may be, and shall have become final and unconditional
in all respects and shall remain in effect (including the approval and
authorization of the Commission under the Act) and the Acquisition
shall have been accomplished in accordance with all such approvals,
authorizations, consents, certificates, orders, filings and
registrations.
c. The Commission shall have duly entered an appropriate order
or orders with respect to the Acquisition as described in the
Application granting and permitting the Application to become effective
under the Act and the rules and regulations thereunder.
d. The registration statement (no. 333-12391) filed with
respect to the shares of Company common stock to be issued in
connection with the Acquisition and declared effective by the
Commission on September 23, 1996, shall remain effective pursuant to
the Securities Act of 1933, as amended; no stop order shall have been
entered with respect thereto; and the issuance of shares of Company
common stock in connection with the Acquisition shall have been
consummated in compliance with the Securities Act of 1933, as amended,
and the rules and regulations thereunder.
e. The solicitation of proxies from the shareholders of TUC
and ENSERCH with respect to the Acquisition was conducted in accordance
with the Securities Exchange Act of 1934, as amended, and the rules and
regulations thereunder.
f. The applicable waiting period under the Hart-
Scott-Rodino Antitrust Improvements Act of 1976, as amended,
and the rules and regulations thereunder has expired.
g. The appropriate articles of merger shall have been duly and
validly filed with the Secretary of State of the State of Texas, and
such other corporate formalities as are required by the laws of the
State of Texas for the consummation of the Acquisition shall have been
taken; and such mergers shall have become effective in accordance with
the laws of the State of Texas.
h. The parties shall have obtained all consents, waivers and
releases, if any, required for the Acquisition under all applicable
governing corporate documents, contracts, agreements, debt instruments,
indentures, franchises, licenses and permits.
Based on the foregoing, and subject to the assumptions and conditions
set forth herein, we are of the opinion that when the Commission has taken the
action requested in the Application:
1. All state laws applicable to the proposed Acquisition
will have been complied with.
2. The Company is a corporation validly organized, duly existing
and in good standing in the State of Texas; TUC is a
corporation validly organized, duly existing and in good
standing in the State of Texas; and ENSERCH is a corporation
validly organized, duly existing and in good standing in the
State of Texas.
3. The shares of Company common stock to be issued in
connection with the Acquisition will be validly issued,
fully paid and nonassessable, and the holders thereof
will be entitled to the rights and privileges
appertaining thereto set forth in the Articles of
Incorporation of the Company. The shares of common
stock of TUC to be acquired by the Company in the
Acquisition will be validly issued, fully paid and
nonassessable, and the Company, as the holder thereof,
will be entitled to the rights and privileges
appertaining thereto set forth in the Articles of
Incorporation of TUC. The shares of common stock of
ENSERCH to be acquired by the Company in the
Acquisition will be validly issued, fully paid and
nonassessable, and the Company, as the holder thereof,
will be entitled to the rights and privileges
appertaining thereto set forth in the Articles of
Incorporation of ENSERCH.
4. The Company may legally acquire the shares of common
stock of TUC and ENSERCH.
5. The consummation of the Acquisition will not violate
the legal rights of the holders of any securities
issued by the Company.
We are members of the State Bar of Texas and do not purport to be
experts on, nor do we opine as to, the laws of any jurisdiction other than the
State of Texas and the federal laws of the United States of America.
We hereby consent to the use of this opinion as an exhibit to the
Application.
Very truly yours,
WORSHAM, FORSYTHE
& WOOLDRIDGE, L.L.P.
By: /s/ Neil D. Anderson
UNITED STATES OF AMERICA
NUCLEAR REGULATORY COMMISSION
In the Matter of )
)
TEXAS UTILITIES ELECTRIC COMPANY ) Docket Nos. 50-445 and 50-446
)
(Comanche Peak Steam Electric Station )
Units 1 and 2) )
ORDER APPROVING APPLICATION REGARDING THE CORPORATE
RESTRUCTURING OF TEXAS UTILITIES COMPANY, THE
PARENT HOLDING COMPANY, FOR TEXAS UTILITIES
ELECTRIC COMPANY, TO FACILITATE THE
ACQUISITION OF ENSERCH CORPORATION
I.
Texas Utilities Electric Company (TUEC) is sole owner of Comanche Peak
Steam Electric Station (CPSES), Units 1 and 2. TUEC holds Facility Operating
License Nos. OPR-87 and OPR-89 issued by the U.S. Nuclear Regulatory Commission
(NRC) pursuant to Part 50 of Title 10 of the Code of Federal Regulations (10 CFR
Part 50) on April 17, 1990, and April 6, 1993, respectively. Under these
licenses, TUEC has the authority to possess and operate Comanche Peak Steam
Electric Station, Units 1 and 2, located in Somervell County, TX. TUEC is
currently a wholly owned subsidiary of Texas Utilities Company (TUC).
II.
By letter dated September 20, 1996, TUEC informed the Commission that
TUC was in the process of implementing a corporate restructuring to facilitate
TUC's acquisition of ENSERCH Corporation (ENSERCH). The acquisition will be
accomplished through the following merger transactions: (1) the formation of a
new Texas Corporation, TUC Holding Company, and two new subsidiaries of TUC
Holding Company (i.e., TUC Merger Corporation and Enserch Merger Corporation);
(2) the merger of TUC Merger Corporation with and into TUC with TUC being the
surviving corporation; and (3) the merger of Enserch Merger Corporation with and
into ENSERCH with ENSERCH being the surviving company. Upon the consummation of
these transactions, TUC and ENSERCH will both become wholly owned subsidiaries
of TUC Holding Company, which will change its name to Texas Utilities Company.
TUEC would continue to remain the sole owner and operator of CPSES, Units 1 and
2. Upon consummation of the restructuring, current stockholders of TUC would
become stockholders of the new TUC and would hold approximately 94 percent of
the issued and outstanding shares of common stock of the new TUC. In addition,
current stockholders of ENSERCH would also become stockholders of the new TUC
and would hold the remaining 6 percent of the common stock of the new TUC. TUEC
requested, to the extent necessary, the Commission's approval of the corporate
restructuring, pursuant to 10 CFR 50.80. Notice of this application for approval
was published in the FEDERAL REGISTER on November 13, 1996 (61 FR 58256), and an
Environmental Assessment and Finding of No Significant Impact was published in
the FEDERAL REGISTER on November 19, 1996 (61 FR 58897).
Under 10 CFR 50.80(a), no license shall be transferred, directly or
indirectly, through transfer of control of the license, unless the Commission
shall give its consent in writing. Upon review of the information submitted in
the letter of September 20, 1996, and other information before the Commission,
the NRC staff has determined that the restructuring of TUC will not affect the
qualifications of TUEC as holder of the licenses, and that the transfer of
control of the licenses for CPSES, to the extent effected by the restructuring
of TUC, is otherwise consistent with applicable provisions of law, regulations,
and orders issued by the Commission, subject to the conditions set forth herein.
These findings are supported by a Safety Evaluation dated November 19, 1996.
III.
Accordingly, pursuant to Sections 161b, 161l, 161o, and 184 of the
Atomic Energy Act of 1954, as amended, 42 USC ss.ss. 2201(b), 2201(l), 2201(o)
and 2234, and 10 CFR 50.80, IT IS HEREBY ORDERED that the Commission approves
the application regarding the restructuring of TUC subject to the following: (1)
TUEC shall provide the Director of the Office of Nuclear Reactor Regulation a
copy of any application, at the time it is filed, to transfer (excluding grants
of security interests or liens) from TUEC to its direct or indirect parent
company or to any other affiliated company, facilities for the production,
transmission, or distribution of electric energy having a depreciated book value
exceeding 10 percent (10%) of TUEC's consolidated net utility plant, as recorded
on TUEC's books of account; and (2) should the restructuring of TUC not be
completed by December 31, 1997, this Order shall become null and void, provided,
however, on application and for good cause shown, such date may be extended.
IV.
By January 8, 1997, any person adversely affected by this Order may
file a request for a hearing with respect to issuance of the Order. Any person
requesting a hearing shall set forth with particularity how that interest is
adversely affected by this Order and shall address the criteria set forth in 10
CFR 2.714(d).
If a hearing is to be held, the Commission will issue an order
designating the time and place of such hearing.
The issue to be considered at any such hearing shall be whether this
Order should be sustained.
Any request for a hearing must be filed with the Secretary of the
Commission, U.S. Nuclear Regulatory Commission, Washington, DC 20555-0001,
Attention: Docketing and Services Branch, or may be delivered to 11585 Rickville
Pike, Rockville, Maryland between 7:45 am and 4:15 pm Federal workdays, by the
above date. Copies should be also sent to the Office of the General Counsel, and
to the Director, Office of Nuclear Reactor Regulation, U.S. Nuclear Regulatory
Commission, Washington, DC 20555, and to George L. Edgar, Esquire, Morgan, Lewis
& Bockius, 1800 M Street, N.W., Washington, DC 20036-5869, attorney for TUEC.
For further details with respect to this Order, see the application
for approval of the corporate restructuring dated September 20, 1996, which is
available for public inspection at the Commission's Public Document Room, the
Gelman Building, 2120 L Street, N.W., Washington, DC, and at the local public
document room located at the University of Texas of Arlington Library,
Government Publications/Maps, 702 College, P.O. Box 19497, Arlington, TX 76019.
Dated at Rockville, Maryland, this 29th day of November 1996.
FOR THE NUCLEAR REGULATORY COMMISSION
Frank J. Miraglia, Acting Director
Office of Nuclear Reactor Regulation
