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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C.
FORM U-33-S
ANNUAL REPORT CONCERNING FOREIGN UTILITY COMPANIES
Filed under Section 33(e) of the
Public Utility Holding Company Act of 1935, as amended
For the fiscal year ended December 31, 1999
Filed pursuant to the Public Utility Holding Company Act of 1935 by
Texas Utilities Company
Energy Plaza
1601 Bryan Street
Dallas, Texas 75201
This Commission is requested to mail copies of all communications
relating to this Annual Report to:
Robert A. Wooldridge
Worsham, Forsythe & Wooldridge, L.L.P.
Energy Plaza
1601 Bryan Street, 30th Floor
Dallas, Texas 75201
April 30, 2000
ANNUAL REPORT CONCERNING FOREIGN UTILITY COMPANIES - PAGE 1
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Texas Utilities Company (the "Company"), a Texas corporation and an
exempt holding company under the Public Utility Holding Company Act of 1935, as
amended (the "Act"), hereby files with the Securities and Exchange Commission
("Commission") this Annual Report Concerning Foreign Utility Companies pursuant
to Section 33(e) of the Act and Rule 57(b) of the implementing regulations
thereunder 17 C.F.R.Section 250.57(b)(1996). The Company is an associate company
of each of (1) Eastern Energy Limited, (2) TXU Europe Limited, (3) Compania
Mexicana de Gas S.A. de C.V.; (4) Comercializadora Metrogas S.A. de C.V.; (5)
Westar Pty. Ltd.; (6) Kinetik Energy Pty. Ltd.; (7) Nynashamn Energi AB; and (8)
Teollisuuden Sahkonmyynti Oy, each a foreign utility company under the Act.
ITEM 1.
A. NAME, LOCATION AND BUSINESS ADDRESS OF EACH FOREIGN UTILITY COMPANY
("FUCO").
1. Eastern Energy Limited
Level 17
452 Flinders Street
Melbourne, Victoria
Australia
2. TXU Europe Limited
The Adelphi
1-11 John Adam Street
London
England
3. Compania Mexicana de Gas S.A. de C.V.
Calle San Nicolas de las Garza Nte.
2901 Colonia Cementos C.P. 64520
Monterrey N.L.
Mexico
4. Comercializadora MetroGas, S.A. de C.V.
Jaime Balmes 8-703
Col. Los Morales Polanco
11510 Mexico, D.F.
Mexico
5. Westar Pty. Ltd.
Level 17
452 Flinders Street
Melbourne Victoria
Australia
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6. Kinetik Energy Pty. Ltd.
Level 17
452 Flinders Street
Melbourne Victoria
Australia
7. Nynashamn Energi AB
Box 18 148 21
OSMO, Sweden
Helsinki, Finland
8. Teollisuuden Sahkonmyynti Oy
Mikonkatu 15 A, 3. krs, 00100
Helsinki, Finland
B. DESCRIPTION OF THE FACILITIES UTILIZED FOR THE GENERATION,
TRANSMISSION AND DISTRIBUTION OF ELECTRIC ENERGY FOR SALE OR FOR THE
DISTRIBUTION AT RETAIL OF NATURAL OR MANUFACTURED GAS.
1. Eastern Energy Limited ("Eastern Energy") is engaged in the
distribution and retailing of electric energy for sale in the State of Victoria,
Australia. For this purpose, Eastern Energy has been issued a distribution
license and retail licenses under the Electricity Industry Act 1993 (Vic.).
Eastern Energy's distribution network primarily consists of (i) subtransmission
66kV closed loops supplied from the main grid terminal station busses, (ii) 39
zone substations, where voltage is transformed from 66 kV to supply 22 kV, and
(iii) 46,000 distribution substations or transformers, where voltage is
transformed to 415/240 V. Eastern Energy has eight connections with GPU
PowerNet. The majority of the network is constructed as an overhead system.
Eastern Energy has approximately 2,000 km of 66kV overhead lines, 26,000 km of
22kV, 12.7 kV, 11 kV and 6.6 kV overhead and underground distribution feeders,
9,000 km of overhead and underground low voltage lines, and 319,000 poles in
service. Eastern Energy has approximately 654,000 meters in service for the
metering of electricity usage, of which approximately 21,000 are electronic and
633,000 are electro-mechanical. Eastern Energy also owns a number of properties
that are used for depots, offices, zone substations and substations. Poles and
pole structures constitute about 35% of asset values, and substations constitute
about 24% of asset values. About 95% of Eastern Energy's lines and cables are
overhead, and 70% of the poles are made of wood. The system mainly employs steel
crossarms and porcelain insulators. Eastern Energy has rights under Section 47
of the Electricity Industry Act of 1993 to enter upon public or private land and
construct or maintain works and take other action subject to any conditions in
its license or any code issued by the office of the Regulator-General in
Victoria. Eastern Energy holds a range of property interests, including freehold
and leasehold interests, licenses, easements, and memoranda of understanding to
grant an easement and permit access to property if required.
2. TXU Europe Limited (formerly TXU Eastern Holdings Limited which,
through its subsidiary TXU Acquisitions Limited acquired The Energy Group Ltd.)
("TXU Europe") is a private limited company incorporated in England and Wales.
TXU Europe, through its subsidiary TXU Europe Group plc ("TXU Europe Group") and
its subsidiaries, owns and operates or has an interest in facilities for the
generation and distribution of electricity in the United Kingdom. TXU Europe
owns, operates or has interests in eight generating stations with about 5,900MW
of coal-
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fired capacity and about 800MW of combined-cycle gas capacity, making it the
fourth largest generator of electricity in the United Kingdom. The coal-fired
generating stations are West Burton, Rugeley B, Drakelow C, Ironbridge, and High
Marnham, with respective capacities of 2,012MW, 1,046MW, 976MW, 970MW, and
945MW. The combined-cycle gas stations, known as Peterborough and King's Lynn,
have registered capacities of 405MW and 380MW respectively, with respective
installed capacities of 360MW and 340MW. TXU Europe holds approximately 13.5%
interest in the Barking combined-cycle gas station, which has a generating
capacity of 1,000MW. TXU Europe also has a controlling interest in Nedalo (UK)
Limited, the largest supplier of small (up to one MW) combined heat and power
(CHP) plants in the UK. As a consequence of the acquisition on 1 March 2000 of
Nedalo BV, a leading manufacturer of small CHP plants, TXU Europe acquired the
remaining shares in Nedalo (UK) Limited it did not already own. It has also
acquired two additional CHP plants with a combined installed capacity of 46MW.
TXU Europe Group has an interest of approximately 84% in
Teplarny Brno, a district heating and generation company based in Brno, the
second largest city in the Czech Republic. Teplarny Brno owns oil and gas-fired
plants that are capable of generating approximately 1,000MW of energy in the
form of steam and water. Teplarny Brno also owns a 169km pipeline network for
distribution of heat to customers, and an additional electricity generation
capacity of 97MW. A combined-cycle gas turbine plant is currently undergoing
final commissioning and will provide approximately 86MW of additional heat
capacity and 95MW of additional electricity generating capacity.
TXU Europe's subsidiary, Eastern Electricity plc, is the
largest supplier and distributor of electricity in England and Wales, with over
three million customers in an authorized area covering about 20,300 square
kilometers. Eastern Electricity distributes electricity through a network of
approximately 88,000 kilometers of lines and cable that operate predominantly at
or below 132kV. Approximately 35,200 kilometers of that network consists of
overhead lines, while 54,600 kilometers are underground cable facilities.
Numerous transformers and switch gear are also part of the network.
TXU Europe also announced in November 1998 a gas retailing
joint venture in Holland with Energie Noord West and an electricity trading and
retail joint venture with Lund Energi in Sweden.
TXU Europe also directly owns approximately 16% in
Severomorauska Energetika a.s., a Czech electricity distribution company.
TXU Europe owns 49% of Zamosc Energy Company, a joint venture
with the Polish regional distribution company Zamejska Korporacja Energetczna
SA, which was established to develop power plants in South West Poland.
TXU Europe's subsidiary, Eastern Natural Gas Limited, and its
subsidiaries is one of the largest suppliers of natural gas in the UK. At 31
December 1998, it was supplying approximately 805,000 customers in the UK,
ranging from residential households to large industrial companies.
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TXU Europe also has equity interests in four natural gas
producing fields in the North Sea.
3. Compania Mexicana de Gas S.A. de C.V. ("CMG") owns a natural gas
distribution system in Monterrey, Mexico and sells natural gas to 250 industrial
customers located throughout the Monterrey area. The company has developed a
residential and commercial natural gas distribution network in several areas of
Monterrey. By year end 1999, CMG served approximately 26,000 residential
customers through a natural gas pipeline network. The system includes 310 miles
of plastic pipe and 148 miles of steel pipe. The 2000 expansion plan includes
growth of 8% for the plastic network. Total volume handled is around 65 mmcf.
4. Comercializadora Metrogas, S.A. de C.V. ("Comercializadora") is
incorporated in Mexico. Comercializadora owns and operates a natural gas
distribution system in the Mexico City, Federal District. Comercializadora owns
facilities for the distribution of natural gas in the Federal District Zone, and
has an exclusive permit from the Comision Reguladora de Energia de Mexico to
distribute natural gas to consumers in the relevant area. The Federal District
Zone is comprised of the core of Mexico City, including the central business
district. The Federal District Zone covers 589 square miles, and contains 9
million inhabitants comprising 1.9 million households. The System currently
serves approximately 98,000 customers with approximately 17Bcf of natural gas
per year. The System consists of approximately 528 miles of pipeline, comprised
of steel, polyethylene, copper and PVC pipeline. The D.F. System also includes
associated meter stations, delivery meters, regulator stations, odorizers,
rectifiers and valves. Comercializadora, through a trust agreement, also has
exclusive rights to two high-pressure transmission pipelines receiving gas at
the city-gate, one a 24-inch and the other a 14-inch pipeline.
5. Westar Pty. Ltd. ("Westar") is a proprietary company incorporated in
Australia, the assets and business of which were acquired by TXU Australia Pty.
Ltd. from the State Government of Victoria in February 1999. Westar is the
holder of a gas distribution license, which provides a right to distribute gas
within a defined geographical area. Westar's gas distribution network includes
approximately 4,800 miles of pipelines over approximately 800 square miles in
the western and northwestern Melbourne metropolitan area, together with 19 rural
localities in central and western Victoria. As of December 31, 1999, Westar
served approximately 400,000 customer connection points.
Westar's initial distribution territory covers part of both Kinetik
Energy and Ikon Energy's retail non-contestable agency areas. (Ikon Energy is a
gas retailer in Victoria unrelated to Westar). Since Westar's formation, gas
distribution system reliability and supply for consumers have been in excess of
industry standards. Minor supply interruptions occur from time to time due to
water ingress into low-pressure pipelines or damage by third parties to a part
of the distribution system.
Westar has easements and licenses which provide it with the legal right
to access land for installation, operation and maintenance of its distribution
pipelines, city gates and also for access routes to various Westar assets.
6. Kinetik Energy Pty. Ltd. ("Kinetik Energy") is a proprietary company
incorporated in Australia, the assets and business of which were acquired by TXU
Australia Pty. Ltd. from the
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State Government of Victoria in February 1999. Kinetik Energy has a retail
license which gives it the exclusive right to supply gas to approximately
400,000 non-contestable customers in its geographic agency area, as agent for
GASCOR (a government owned statutory corporation), until such time as those
customers become contestable. Its license also gives it the right to supply gas
to any customer in Victoria after contestability.
Kinetik Energy, as agent for GASCOR, serves a base of approximately
400,000 customers. Large industrial or commercial customers have individual
sales contracts. The portfolio of business customers currently served by Kinetik
Energy includes food manufacturing, chemicals, paper, health, hospitality and
recreation. Approximately 52% of Kinetik Energy's agency customers are connected
to Westar's distribution network, with the balance connected to the distribution
system of another gas distributor.
7. Nynashamn Energi AB ("Nynashamn") is a corporation incorporated in
Sweden. Nynashamn was acquired in December 1999 by Elbolageti Norden AB, a
company of which TXU Europe Group owns 50%. The business of Nynashamn includes
electricity retail and distribution activity for approximately 14,000 customers.
8. TXU Nordic Energy Oy, (formerly Teollisuuden Sahkonmyynti Oy ("TNE")
is a corporation incorporated in Finland that owns 14.7% of the total
outstanding shares in Pohjolan Voima Oy ("PVO"), a company incorporated in
Finland, the business address of which is Mikonkatu 15 A, 00100, Helsinki,
Finland. PVO owns 25% of the outstanding securities in Fingrid Oyj ("Fingrid"),
the national transmission grid company in Finland, the business address of which
is Arkadiankatu, 23 B, 00100 Helsinki, Finland. PVO also owns all or a portion
of the following companies incorporated in Finland that own electric generators:
PVO Vesivoima Oy, PVO-Lampovoima Oy, Mussalon Voima Oy, PVO-Huippuvoima Oy,
Veitsiluodon Voima Oy, Kemijarven Voima Oy, Oulun Voima Oy, Teollisuuden Voima
Oy, Vaskiluodon Voima Oy, Nokian Lampovoima Oy, Lansi-Suomen Voima Oy, and
Tornionlaakson Voima Oy.
Additionally, PVO, through its subsidiary Oy Alholmens Kraft Ab has
announced construction of a new electric generator at Pietarsaari in Finland.
The generator is expected to have capacity of 265 MW and is expected to be
completed at the end of 2001. The other shareholders of Oy Alholmens Kraft Ab,
other than PVO, are UPM-Kymmene Oyj, Perhonjoki Oy, Pohjolan Voima Oy, Revon
Sahko Oy, Graningeverkens Ab, and Skelleftea Kraft Ab.
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C. IDENTIFICATION AND DESCRIPTION OF EACH SYSTEM COMPANY THAT HOLDS AN
INTEREST IN THE FUCO(S).
1. Eastern Energy. Eastern Energy is a wholly-owned subsidiary of TXU
Australia Pty Ltd ("TXUA"). TXUA is a wholly-owned subsidiary of TXU Australia
Holdings Pty. Ltd., which is a wholly-owned subsidiary of TXU Australia Holdings
L.P. ("TXUAH"). TXUAH is held 49.75% by TXU Australia (LP) No. 1 Limited ("TXUA
No. 1"), 49.75% by TXU Australia (LP) No. 2 Limited ("TXUA No. 2"), and .05% by
TXU Australia Holdings (AGP) Pty. Ltd. ("AGP"). TXUA No. 1, TXUA No. 2 and AGP
are all wholly-owned subsidiaries of TXU International Holdings Limited. TXU
United Kingdom Holdings Company owns 85% of the outstanding voting stock of TXU
International Holdings Limited. TXU Finance (No. 1) Holdings Company, a Delaware
corporation, owns 15% of the outstanding voting stock of TXU International
Holdings Limited. TXU Finance No. 1 Holdings Company is a wholly owned
subsidiary of TXU United Kingdom Holdings Company which is a wholly-owned
subsidiary of the Company.
2. TXU Europe. TXU Europe is a wholly-owned subsidiary of TXU
International Holdings Limited. TXU United Kingdom Holdings Company owns 85% of
the outstanding voting stock of TXU International Holdings Limited. TXU Finance
(No. 1) Holdings Company, a Delaware corporation, owns 15% of the outstanding
voting stock of TXU International Holdings Limited. TXU Finance No. 1 Holdings
Company is a wholly owned subsidiary of TXU United Kingdom Holdings Company
which is a wholly-owned subsidiary of the Company.
3. CMG. Enserch de Monterrey S.A. de C.V. ("Monterrey") owns 60% of the
shares of CMG. Monterrey is a wholly-owned subsidiary of Enserch de Mexico S.A.
de C.V. which is a wholly-owned subsidiary of National Pipeline Company which is
a wholly-owned subsidiary of TXU Energy Industries Company, which is a
wholly-owned subsidiary of the Company.
4. Comercializadora. Comercializadora is a wholly-owned subsidiary of
Servicio de Energia de Mexico, S.A. de C.V. ("SEMSA"). Lone Star Gas
International, Inc. ("LSGII"), a Texas company, owns 70% of the shares of SEMSA.
LSGII is a wholly-owned subsidiary of TXU United Kingdom Holdings Company which
is a wholly-owned subsidiary of the Company.
5. Westar. Westar is a wholly-owned subsidiary of TXU (No. 9) Pty. Ltd.
which is a wholly-owned subsidiary of TXU (No. 8) Pty. Ltd. which is a
wholly-owned subsidiary of TXU Australia Pty. Ltd., which is a wholly-owned
subsidiary of TXU Australia Holdings Pty. Ltd, which is a wholly-owned
subsidiary of TXUAH. TXUAH is held 49.75% by TXUA No. 1, 49.75% by TXUA No. 2,
and 0.5% by AGP. TXUA No. 1, TXUA No. 2 and AGP are all wholly-owned
subsidiaries of TXU International Holdings Limited. TXU United Kingdom Holdings
Company owns 85% of the outstanding voting stock of TXU International Holdings
Limited. TXU Finance (No. 1) Holdings Company, a Delaware corporation, owns 15%
of the outstanding voting stock of TXU International Holdings Limited. TXU
Finance No. 1 Holdings Company is a wholly owned subsidiary of TXU United
Kingdom Holdings Company which is a wholly-owned subsidiary of the Company.
6. Kinetik Energy. Kinetik Energy is a wholly-owned subsidiary of TXU
(No. 9) Pty. Ltd. which is a wholly-owned
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subsidiary of TXU (No. 8) Pty. Ltd. which is a wholly-owned subsidiary of TXU
Australia Pty. Ltd., which is a wholly-owned subsidiary of TXU Australia
Holdings Pty. Ltd, which is a wholly-owned subsidiary of TXUAH. TXUAH is held
49.75% by TXUA No. 1, 49.75% by TXUA No. 2, and 0.5% by AGP. TXUA No. 1, TXUA
No. 2 and AGP are all wholly-owned subsidiaries of TXU International Holdings
Limited. TXU United Kingdom Holdings Company owns 85% of the outstanding voting
stock of TXU International Holdings Limited. TXU Finance (No. 1) Holdings
Company, a Delaware corporation, owns 15% of the outstanding voting stock of TXU
International Holdings Limited. TXU Finance No. 1 Holdings Company is a wholly
owned subsidiary of TXU United Kingdom Holdings Company which is a wholly-owned
subsidiary of the Company.
7. Nynashamn. Nynashamn is a wholly-owned subsidiary of Elbolageti
Norden AB, of which 50% is owned by TXU Europe Group. TXU Europe Group is a
wholly-owned subsidiary of TXU Acquisitions Ltd, which is a wholly-owned
subsidiary of TXU Finance No. 2 Ltd. TXU Finance No. 2 Ltd. is owned 90% by TXU
Europe Ltd and 10% by TXU Finance (No. 2) Holdings Company. TXU Finance (No. 2)
Holdings Company is a wholly-owned subsidiary of the Company. TXU Europe is a
wholly-owned subsidiary of TXU International Holdings Limited. TXU United
Kingdom Holdings Company owns 85% of the outstanding voting stock of TXU
International Holdings Limited. TXU Finance (No. 1) Holdings Company, a Delaware
corporation, owns 15% of the outstanding voting stock of TXU International
Holdings Limited. TXU Finance No. 1 Holdings Company is a wholly owned
subsidiary of TXU United Kingdom Holdings Company which is a wholly-owned
subsidiary of the Company.
8. TNE. TNE is 81 % owned by TXU Europe Group. TXU Europe Group is a
wholly-owned subsidiary of TXU Acquisitions Ltd, which is a wholly-owned
subsidiary of TXU Finance No. 2 Ltd. TXU Finance No. 2 Ltd. is owned 90% by TXU
Europe Ltd and 10% by TXU Finance (No. 2) Holdings Company. TXU Finance (No. 2)
Holdings Company is a wholly-owned subsidiary of the Company. TXU Europe is a
wholly-owned subsidiary of TXU International Holdings Limited. TXU United
Kingdom Holdings Company owns 85% of the outstanding voting stock of TXU
International Holdings Limited. TXU Finance (No. 1) Holdings Company, a Delaware
corporation, owns 15% of the outstanding voting stock of TXU International
Holdings Limited. TXU Finance No. 1 Holdings Company is a wholly owned
subsidiary of TXU United Kingdom Holdings Company which is a wholly-owned
subsidiary of the Company.
ITEM 2. IDENTIFY ANY DEBT OR OTHER FINANCIAL OBLIGATION OF THE FOREIGN
UTILITY COMPANY FOR WHICH THERE IS RECOURSE DIRECTLY OR INDIRECTLY TO THE
REPORTING PUBLIC-UTILITY COMPANY OR, IF THE REPORTING COMPANY IS AN EXEMPT
HOLDING COMPANY, TO ANY SYSTEM COMPANY. IDENTIFY SEPARATELY ANY DIRECT OR
INDIRECT GUARANTEE OF A SECURITY OF A FOREIGN UTILITY COMPANY BY ANY SYSTEM
COMPANY.
1. Eastern Energy. The following information describes Eastern Energy's
financial obligations as of December 31, 1999. On October 31, 1996, Eastern
Energy entered into a term credit facility and a working capital facility with a
syndicate of banks arranged by Westpac Banking Corporation. The term credit
facility is a five-year, A$1,200,000,000 (US$769,000,000) revolving credit
facility and includes a A$375,000,000 (US$240,000,000) bridging component. The
working capital facility provides for borrowings totaling A$100,000,000
(US$60,000,000) from participant banks. The facilities are not secured by the
charge over the property, assets and
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rights of Eastern Energy. Neither AGP, TXU Australia Holdings, L.P., TXUA nor
the Company has granted any security over their assets in connection with the
facilities.
In December, 1996, Eastern Energy issued US$250,000,000 of 6.75% Senior
Notes due December 1, 2006 and US$100,000,000 of 7.25% Senior Notes due December
1, 2016. The proceeds of the notes were used to repay the bridging facility. The
notes are direct, senior unsecured obligations of Eastern Energy and are
non-recourse to the Company.
On December 11, 1996, Eastern Energy agreed to make available to TXUA a
loan facility of up to A$10,000,000 (US$6,400,000) (the "Loan Facility"). TXUA
is to pay interest at a commercial rate on the principal amount of each drawing
under the Loan Facility, as more particularly specified in each letter request.
Neither the Company nor any other subsidiary of the Company has granted any
security over its assets in connection with the Loan Facility.
On April 18, 1997, Eastern Energy entered into a Dealer Agreement with
four banks arranged by National Australia Bank, establishing an uncommitted
facility whereby Eastern Energy may issue commercial paper in aggregate amounts
of up to A$200,000,000 (US$128,000,000). Liquidity support for this facility, in
an amount of A$200,000,000 (US$128,000,000), is provided under an agreement
dated May 5, 1997, between Eastern Energy, National Australia Bank Ltd. and
Australia & New Zealand Banking Group Ltd. This Liquidity Support Agreement has
a term of 364 days but is renewable. Neither the commercial paper or the
liquidity facility is secured by the charge over the property, assets and rights
of Eastern Energy. Neither the Company nor any subsidiary of the Company, has
granted any security over their assets in connection with the commercial paper
or the liquidity facility.
On April 30, 1999, TXUAH entered into a syndicated loan facility for
the amount of A$200,000,000 (U.S.$128,000,000) under which the lenders are Chase
Manhattan Bank and the Commonwealth Bank of Australia. The funds under this
syndicated loan facility were lent to Eastern Energy through a series of
intercompany agreements and the recourse of banks is effectively limited to
seeking recovery of its debt from Eastern Energy. The loan facility matures on
June 30, 2000 and there is no direct recourse to the Company.
2. TXU Europe. None.
3. CMG. The following information describes CMG's financial obligations
as of December 31, 1999. On October 28, 1997, CMG entered into a loan with
BANORTE, a Mexican bank, for Pesos$20,000,000 (US$2,020,000). The term is eight
years with a two-year grace period. In April 1998, CMG entered into another loan
with BANORTE for Pesos $52,000,000 (US$5,250,000), terms being for nine years
with a three-year grace period. The assets and permit of CMG are the pledge for
the credit.
4. Comercializadora. The following information describes
Comercializadora's financial obligations as of December 31, 1999. On August 20,
1998, LSGII entered into an $85,000,000 credit facility with Chase Bank to fund
its required capital investments into SEMSA. The outstanding balance on the
facility is $57,000,000 and the facility is currently renewing on a monthly
basis in contemplation of permanent financing. LSGII also entered into an
arrangement with Chase Bank for a $25,000,000 Letter of Credit to be issued to
the Comision Reguladora de Energia de Mexico to guaranty Comercializadora's
performance under its operating permit. The
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Letter of Credit has a five-year maturity and may be reduced annually beginning
in 2000 based on the number of customers connected by Comercializadora. Both
facilities are guaranteed by LSGII's parent, TXU United Kingdom Holdings, Inc.,
but are non-recourse to the Company.
5. Westar. The following information describes Westar and Kinetik
Energy's financial obligations as of December 31, 1999. On February 24 1999,
TXUAH entered into a $1.1 billion syndicated facilities agreement from a banking
syndicate which initially included Deutsche Bank, Bank of America, National
Australia Bank and Toronto Dominion Bank which included a non-revolving cash
advance facility and a revolving cash advance facility. The funds were used
through a series of intercompany agreements to pay the purchase price for the
gas distribution business of Westar and the gas retail business of Kinetik
Energy. No direct security interest was granted over the assets of Westar or
Kinetik Energy although the senior lenders of the bank syndicate were granted
security interest in the intercompany loan agreements. There were no security
interests granted which allow the senior lenders to have recourse to the
Company.
The balance of the purchase price for the gas distribution business of
Westar and the gas retail business of Kinetik Energy was provided by means of a
subordinated loan (under which the lenders are Citibank NA, BA Australia Limited
and Westpac Banking Corporation) and from funds provided by Eastern Energy.
TXUAH and Eastern Energy entered into a subordinated facility agreement dated
February 24, 1999 with the banks and the facility matures on June 30, 2000. This
facility is guaranteed by the Company.
6. Kinetik Energy. Kinetik Energy's financial obligations as of
December 31, 1999 are the same as the financial arrangements of Westar.
7. Nynashamn. None.
8. TNE. None.
ITEM 3. IDENTIFY ANY SERVICE, SALES OR CONSTRUCTION CONTRACT(S) BETWEEN
A FOREIGN UTILITY COMPANY AND THE REPORTING PUBLIC-UTILITY COMPANY OR, IF THE
REPORTING COMPANY IS AN EXEMPT HOLDING COMPANY, ANY SYSTEM COMPANY. DESCRIBE THE
SERVICES TO BE RENDERED OR GOODS SOLD, AND THE FEES OR REVENUES UNDER SUCH
CONTRACT(S).
1. Eastern Energy. Eastern Energy and its affiliate TXU Networks Pty.
Ltd. (formerly known as Eastern Facilities Management) are parties to an asset
management agreement whereby TXU Networks constructs and manages facilities on
behalf of Eastern Energy. Eastern Energy paid TXU Networks a fee of A$75,100,000
(US$48,060,000) for the construction of such assets and A$62,400,000
(US$39,930,000) for the management of such assets in 1998. Global Customer
Solutions ("GCS") and Eastern Energy are parties to a services agreement whereby
GCS provides certain call center facilities services, meter reading, billing and
credit management to Eastern Energy. Eastern Energy paid GCS a fee of
A$27,800,000 (US$17,800,000) for such services in 1998. Additionally, on
December 31, 1999, Australian Tree Management ("ATM") performed tree trimming
and other vegetarian management services on behalf of Eastern Energy. In 1998
Eastern Energy paid ATM A$2,000,000 (US$1,280,000) for such services. In
addition, TXUA currently receives certain management, accounting and
administrative support services from TXU Australia Services Pty. Ltd. ("TXUS"),
an indirect subsidiary of the Company. Services are provided by TXUS at cost.
Effective October 1, 1996, TXUA and Eastern Energy
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entered into a Management and Technical Service Agreement for the provisions of
management, technical and other services by TXUA to Eastern Energy. Eastern
Energy is required to reimburse TXUA for all costs and expenses reasonably
incurred in connection with the provision of those services, plus a service fee
in an amount equal to 10% of the service costs. Pursuant to this agreement, TXUA
may provide these services directly to Eastern Energy or may procure services
from Company subsidiaries.
Eastern Energy and Kinetik Energy entered into an Energy Trading
Agreement on September 30, 1999. Under the Energy Trading Agreement, Kinetik
Energy is responsible for procurement and supply of electricity for Eastern
Energy's customers. In the period until December 31, 1999, Eastern Energy paid
Kinetik Energy a fee of A$100,000 (U.S. $64,000) for provision of the energy
trading services, in addition to the cost of electricity procured and supplied
by Kinetik Energy to Eastern Energy's customers.
2. TXU Europe. None.
3. CMG. CMG entered into a Development and Technical Assistance
Agreement with Enserch International Services, Inc. ("EIS") on February 1, 1996.
Under the contract, EIS provides technical assistance to CMG in its effort to
expand its Monterrey natural gas distribution facilities. The services that CMG
receives from EIS include technical assistance on matters such as facility
construction, development of rate structures, procurement of gas supplies,
facility operation and maintenance, law compliance, and personnel training. EIS
supplies CMG with the skilled personnel necessary for such technical assistance,
including one on-site senior-level manager and one on-site technical field
engineer. CMG pays fees to EIS equal to 100% of the salaries, wages, and
benefits of all EIS personnel engaged in providing services under the
Development and Technical Assistance Agreement. CMG also reimburses EIS for all
direct travel and other expenses that EIS incurs and that are associated with
its performance under the contract. The Mexican Regulatory Agency ("CRE")
mandated that all LDCs secure risk management services for all residential and
commercial clients for a minimum five-month period during the winter peaking
season (November 1998 -- March 1999). Based on competitive bidding, CMG elected
to purchase the risk management service from Enserch Energy Services, Inc. for
the winter peaking period .
4. Comercializadora. Comercializadora presently does not have in place
a services, sales or construction agreement with any technical or developmental
affiliate of the Company. However, six expatriate employees are currently
assigned to the Comercializadora business unit and whose actual costs are
charged to Comercializadora. The six expatriates are deployed in Mexico City to
facilitate the transition of Comercializadora from a state owned utility to a
privately held business. Additionally, other employees from various
organizations within the TXU family perform services for SEMSA. In all
circumstances, associated costs are charged to SEMSA. CRE mandated that all LDCs
secure risk management services for all residential and commercial clients for a
minimum five-month period during the winter peaking season (November 1998 -
March 1999) up to one year. Based on competitive bidding, Comercializadora
elected to purchase the risk management service from Enserch Energy Services,
Inc. for the winter peaking period.
5. Westar. Westar and TXU Networks (a subsidiary of Eastern Energy)
entered into a Network Administration Agreement on September 30, 1999. Under the
Network
ANNUAL REPORT CONCERNING FOREIGN UTILITY COMPANIES - PAGE 11
<PAGE> 12
Administration Agreement, TXU Networks is responsible for maintaining, managing
and operating Westar's gas distribution system. For the period ending December
31, 1999, Westar paid TXU Networks a fee of A$3,400,000 (U.S. $2,176,000) for
provision of the networks services under this agreement. Westar and Kinetik
Energy have entered into a Distribution Tariff Agreement under which Kinetik
Energy pays Westar for services provided related to the provision of
distribution services to Kinetik Energy's customers. The amount paid for
distribution services under this agreement is regulated by the Office of the
Regulator General, the authority responsible for regulation of the energy
industry in Victoria, Australia.
6. Kinetik Energy. Kinetik Energy and Eastern Energy entered into an
Energy Trading Agreement on September 30, 1999 as described above. Kinetik
Energy has also entered into an Administrative Services Agreement for the
provision of administrative, corporate and other services to Kinetik Energy by
TXU Services Pty. Ltd., a subsidiary of TXU Australia Pty. Ltd.
7. Nynashamn. None.
9. TNE. None.
EXHIBIT A. AN ORGANIZATIONAL CHART SHOWING THE RELATIONSHIP OF EACH FOREIGN
UTILITY COMPANY TO THE REPORTING PUBLIC-UTILITY COMPANY OR, IN THE EVENT THAT
THE REPORTING COMPANY IS AN EXEMPT HOLDING COMPANY, TO SYSTEM PUBLIC UTILITY
COMPANIES.
The organizational chart showing the relationship of Eastern Energy,
Ltd., TXU Europe Limited, Metrogas, S.A., Compania Mexicana de Gas S.A. de C.V.,
Comercializadora Metrogas, S.A. de C.V., Westar Pty. Ltd., Kinetik Energy Pty.
Ltd., Nynashamn Energi AB, and Teollisuuden Sahkonmyynti Oy. to the Company
system public-utility companies is incorporated herein by reference and attached
hereto as Exhibit A.
SIGNATURE
The undersigned company has duly caused this annual report to be signed
on its behalf by the undersigned thereunto duly authorized pursuant to the
requirements of the Public Utility Holding Company Act of 1935. The signature of
the undersigned company shall be deemed to relate only to matters having
reference to such company or its subsidiaries.
TEXAS UTILITIES COMPANY
By: /s/ PETER B. TINKHAM
-------------------------------------------
Peter B. Tinkham
Secretary/Assistant Treasurer
Date: April 30, 2000
ANNUAL REPORT CONCERNING FOREIGN UTILITY COMPANIES - PAGE 12
<PAGE> 13
EXHIBIT A
<TABLE>
<S> <C>
-----------------------
Texas Utilities Company
d/b/a TXU Corp.
[Texas]
-----------------------
-
----------------------------------------------------------------------------------------------
- - - - -
------------------ --------------- -------------------- ------------------ -------------------
TXU Energy TXU Gas Company TXU Electric Company TXU United Kingdom TXU Finance (No. 2)
Industries Company [Texas] [Texas] Holdings Company Holdings Company --------
[Texas] [Utility] [Utility] [Delaware] [Delaware] -
------------------ --------------- -------------------- ------------------ ------------------- -
- -
- -------------------
- - - - -
- --------------------------------------------------- - -
- - - - -
- ---------------------- ------------------- - -
- Lone Star Gas TXU Finance (No. 1) - -
- International, Inc. Holdings Company - -
- [Texas] [Delaware] - -
- ---------------------- ------------------- - -
- - - - -
- - - - 85% -
- - - - -
- - 70% - - 10% -
- ---------------------- - - -
- Servicio de Energia de ------------------- - -
- Mexico S.A. de C.V. TXU International - -
- [Mexico] Holdings Limited -- -
- ---------------------- [UK] -
- - ------------------- -
- - - -
- ---------------------- - -
- Comercializadora - -
- Metrogas, S.A. de C.V. - -
---------------------- [Mexico] - -
- - ---------------------- - -
- - - - - - -
- - - - - - -
- ----------------- -------------------- ------------------ ------------------ ---------------------- ------------------ -
TXU SESCO Company National Pipeline TXU Australia (LP) TXU Australia (LP) TXU Australia Holdings TXU Europe Limited -
[Texas] Company No. 1 Limited No. 2 Limited (AGP) Pty. Ltd. [UK] -
[Utility] [Texas] [UK] [UK] [Australia] [FUCO] -
- ----------------- -------------------- ------------------ ------------------ ---------------------- ------------------ -
- - 49.75% - 49.75% - .05% - 50% -
-------------------- - ------------------ - ------------------ -
Enserch de Mexico - TXU Australia - TXU Finance -
S.A. de C.V. ---------- Holdings ------------- (No. 2) Limited ----
[Mexico] (Partnership) [UK]
-------------------- [Australia] ------------------
- ------------------ -
- - -
-------------------- ------------------ ------------------
Enserch de Monterrey TXU Australia TXU Acquisitions
S.A. de C.V. Holdings Pty. Ltd. Limited
[Mexico] ------------------ [UK]
-------------------- - ------------------
- 60% ------------------ -
-------------------- TXU Australia ------------------
Compania Mexicana Pty. Ltd. The Energy Group
de Gas, S.A. de C.V. [Australia] Limited
[Mexico] ------------------ [UK]
[FUCO] - ------------------
-------------------- ------------------------------- -
- - ------------------
--------------------- ---------------------- TXU Europe Group
TXU (No. 8) Pty. Ltd. Eastern Energy Limited plc
[Australia] [Australia] [UK]
[FUCO] ------------------
--------------------- ---------------------- -
- -
--------------------- -------------------
TXU (No. 9) Pty. Ltd. -
[Australia] -------------------
--------------------- - 50% - 81%
- ----------- ----------
- Elb Olageti TXU Nordic
- Norden AB Energy Oy
- ----------- [FUCO]
------------------------------- - ----------
- - ----------
---------------- ------------------------ Nynashamn
Westar Pty. Ltd. Kinetic Energy Pty. Ltd. Energi AB
[Australia] [Australia] ----------
[FUCO] [FUCO]
---------------- ------------------------
</TABLE>
