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As Filed with the Securities and
Exchange Commission on October 15, 1998 File No. 70-9069
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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POST-EFFECTIVE AMENDMENT NO.3 TO
APPLICATION-DECLARATION
ON FORM U-1
UNDER
THE PUBLIC UTILITY HOLDING COMPANY ACT OF 1935
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CONECTIV
CONECTIV ENERGY SUPPLY, INC.
800 King Street
Wilmington, DE 19899
DELMARVA CAPITAL INVESTMENTS, INC. ATLANTIC ENERGY ENTERPRISES, INC.
CONECTIV SERVICES, INC. ATLANTIC ENERGY INTERNATIONAL, INC.
CONECTIV COMMUNICATIONS, INC. ATLANTIC GENERATION, INC.
DELMARVA SERVICES COMPANY ATLANTIC SOUTHERN PROPERTIES, INC.
CHRISTIANA CAPITAL MANAGEMENT, INC. ATE INVESTMENT, INC.
CONECTIV SOLUTIONS, LLC COASTALCOMM, INC.
POWER CONSULTING GROUP, INC. ATLANTIC ENERGY TECHNOLOGY, INC.
ALTEMP ENERGY SYSTEMS, INC. BINGHAMTON GENERAL, INC.
252 Chapman Road BINGHAMTON LIMITED, INC.
P.O. Box 6066 PEDRICK LTD., INC.
Newark, DE 19714 PEDRICK GEN., INC.
VINELAND LIMITED, INC.
PETRON OIL CORPORATION VINELAND GENERAL, INC.
180 Gordon Drive ATS OPERATING SERVICES, INC.
Exton, PA 19341-1328 THE EARTH EXCHANGE, INC.
THERMAL ENERGY LP I
5100 Harding Highway
Mays Landing, NJ 08330
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(Names of companies filing this statement and addresses
of principal executive offices)
CONECTIV
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(Name of top registered holding company parent)
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Louis M. Walters
Treasurer
Conectiv
800 King Street
Wilmington, DE 19899
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(Names and addresses of agents for service)
The Commission is requested to send copies of all notices, orders and
communications in connection with this Application-Declaration to:
Peter F. Clark, Esq. Joyce Koria Hayes, Esq.
Conectiv 7 Graham Court
800 King Street Newark, DE 19711
Wilmington, DE 19899
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Item 1. Description of Proposed Transactions:
(a) Furnish a reasonably detailed and precise description of the proposed
transaction, including a statement of the reasons why it is desired to
consummate the transaction and the anticipated effect thereof. If the
transaction is part of a general program, describe the program and its
relation to the proposed transaction.
Conectiv, a Delaware corporation, previously filed this
Application/Declaration on Form U-1 with the Securities and Exchange Commission
(the "Commission") requesting authorization under Section 9(a)(2) of the Public
Utility Holding Company Act of 1935, as amended (the "Act"), to consummate
certain transactions (the "Merger") resulting in the acquisition by Conectiv of
all of the outstanding voting securities of Delmarva Power & Light Company, a
Delaware and Virginia corporation and an operating public utility company
("Delmarva"), and Atlantic City Electric Company, a New Jersey corporation and
an operating public utility company ("ACE"). Also as a result of the Merger and
certain restructuring that was implemented contemporaneously with the Merger,
Conectiv became the direct or indirect owner of various non-utility businesses.
Exhibit E-4, which was filed under Amendment No. 3, depicted the Conectiv System
as it came to exist shortly after the Merger. The order approving the Merger was
issued on February 25, 1998 (Release No. 26832) (the "Merger Order").
The purpose of this filing is to request Commission authorization for
certain actions designed to further simplify and consolidate the non-utility
subsidiaries. The restructuring would be accomplished in two phases.
Organization charts showing the composition of the system following completion
of Phase One and Phase Two are included herein as Exhibits E-5 and E-6.
PHASE ONE
Phase One will be implemented as soon as practicable following the
issuance of an order permitting this application to become effective and would
reduce the number of active direct non-utility(1) subsidiaries of Conectiv to
six(2):
1. Conectiv Services, Inc. (currently expected to do business as Conectiv
Enterprises) ("CSI"), which will focus on energy-related services and
the marketing of energy to retail customers;
2. Conectiv Energy Supply, Inc. ("CES"), which will focus on energy supply
and marketing to wholesale and industrial customers, including
affiliates;
3. Delmarva Capital Investments, Inc. ("DCI"), which will be renamed
Conectiv Properties and Investments, Inc. ("CPI") and will own the
non-utility investments which are more passive in nature;
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(1) Conectiv's two utility subsidiaries (Delmarva and ACE) and their
subsidiaries are unaffected by the proposed restructuring. Similarly, the
system's service company, Conectiv Resource Partners, Inc., is unaffected.
(2) Conectiv also has an inactive subsidiary named Conectiv Brands, Inc., which
will not commence business nor be funded until authorization is received from
this Commission pursuant to another filing.
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4. Atlantic Southern Properties, Inc. ("ASP"), which will be merged into
CPI in Phase Two;
5. Atlantic Generation, Inc., which will be merged into CES in Phase Two;
and
6. ATE Investments, Inc. ("ATE"), which will be merged into CPI in Phase
Two.
Phase One Transactions and Effects:
To implement Phase One and reduce the number of direct non-utility
subsidiaries, numerous actions must be effected, including the following
proposed actions:
1. Atlantic Energy Enterprises, Inc. ("AEE"), a subsidiary formed by
Atlantic Energy, Inc. as a holding company for its non-regulated
investments, will be merged with and into Conectiv. This action would
make all six wholly-owned direct subsidiaries of AEE (ATE Investment,
Inc. ("ATE"); Atlantic Generation, Inc. ("AGI"); Conectiv Thermal
Systems, Inc. (formerly Atlantic Thermal Systems, Inc.) ("CTS")(3);
CoastalComm, Inc. ("Coastal"); Atlantic Southern Properties, Inc.
("ASP"); and Atlantic Energy Technology, Inc. ("AET") and the ownership
of Enerval, LLC ("Enerval") direct holdings of Conectiv, for an interim
period.
2. AGI will continue as a subsidiary of Conectiv until Phase Two is
accomplished. The factors that warranted the formation of special
purpose subsidiaries for investment in various cogeneration projects no
longer exist today. Therefore, during Phase One, Pedrick General, Inc.,
Vineland General, Inc. and Binghamton General, Inc. will be merged with
and into their parent company, AGI. Pedrick Limited, Inc., Vineland
Limited, Inc. and Binghamton Limited, Inc. will be merged with ATE.
Depending on the results of a pending tax analysis, the merger of these
companies into ATE will be accomplished by (1) a stock for asset merger
in which AGI would acquire securities of ATE in exchange for the merger
into ATE of the companies or, (2) a dividend(4) of the shares of these
companies by AGI to Conectiv followed by either (i) a merger of the
companies into ATE or (ii) following a capital contribution by Conectiv
to ATE, a short-form merger of the subsidiaries into their new parent
company.
3. CPI will become the holder of certain non-regulated investments that
are passive in nature. However, for maximum flexibility, Conectiv
request authorization to retain certain passive investments if
retention by Conectiv is deemed more appropriate for tax
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(3) Four of the six subsidiaries of CTS (Atlantic Jersey Thermal Systems, Inc.,
Atlantic Pacific Las Vegas LLC, Atlantic-Pacific Glendale LLC and Thermal Energy
L.P.I) will be unaffected by the restructuring. Atlantic Paxton Cogeneration,
Inc. has been dissolved and ATS Operating Services, Inc. may be merged with
Thermal Energy L.P.I in Phase Two as discussed below.
(4) The payments of dividends out of capital or unearned surplus by any
non-utility subsidiary in connection with the restructuring will not in any way
adversely affect the financial integrity of any company in the Conectiv System
or the working capital of any public utility company in the Conectiv System.
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or other reasons. To accomplish this result, the following transactions
will be implemented.
A. Consolidations into CPI:
(i) Delmarva Services Company ("DSC"), a corporation
formed to own and finance an office building that is
leased to Delmarva or its associates(5); Christiana
Capital Management, Inc., a corporation that owns an
office building leased to associates; and Atlantic
Energy International, Inc., a corporation formed to
broker used utility equipment to foreign countries,
will be merged into CPI.
(ii) AET will all be merged into CPI. The Earth Exchange,
Inc. will be merged up into AET prior to the merger
of AET into CPI.
B. Separate Subsidiaries to be Maintained by CPI:
(i) Transfers of Investments. D & E Communications,
Inc., an exempt telecommunications company currently
held by Coastal; Energy Investors Fund III, LP
("EIF"), a company investing in energy technology
(currently held by AGI); and Tech Leaders II, LP
("TLLP"), a company which invests in independent
power production (currently held by AEE) will be
transferred to CPI either by (a) sale or (b) capital
dividend to a common parent followed by a capital
contribution of the investment to CPI.
(ii) Retained Investments: CPI will continue to hold the
securities of DCI I, Inc., a company formed to invest
in leveraged leases; DCI II, Inc., a foreign sales
corporation; and DCTC-Burney, Inc. (which in turn
holds interests in Forest Products LP and Burney
Forest Products ("BFP"), a joint venture and an EWG.
In addition, interests held by CPI in
UAH-Hydro-Kennebec, and Luz Solar Partners Ltd. may
be retained by CPI or dividended by CPI and Conectiv
for tax or other reasons.
C. Status of CPI after the Restructuring:
EIF, TLLP, AET, BFP and the cogeneration companies are engaged
in Rule 58 activities. Nevertheless, the bulk of CPI revenues
will not be derived from Rule 58 activities. CPI will not
therefore qualify as a Rule 58 company. Future financing of
CPI will be pursuant to Rule 52. There is at this point no
intention to expand the Rule 58 activities acquired by CPI in
Phase One, but rather to dispose of them in due course.
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(5) Stock in Chesapeake Utilities Corporation currently held by DSC might be
dividended to Conectiv rather than being held by CPI until sold as contemplated
by the Merger Order.
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4. Conectiv Services, Inc.("CSI") will be the provider of non-regulated
energy-related services for the Conectiv System. This will be
accomplished through the following actions:
A. Conectiv Solutions ("Solutions") will be merged into CSI.
Conectiv Plumbing LLC, a subsidiary of CSI, will be
unaffected.
Under the Merger Order, CSI was described as follows:
CSI, directly and through subsidiaries, provides a wide range
of energy-related goods and services to industrial, commercial
and residential customers. CSI is engaged in the design,
construction and installation, and maintenance of new and
retrofit heating, ventilating and air conditioning ("HVAC")
electrical and power systems, motors, pumps, lighting, water
and plumbing systems, and related structures as approved by
the Commission.
Solutions business was described in the Merger Order as
follows:
Solutions was formed in 1997 to provide, directly or through
subsidiaries, power systems consulting, end use efficiency
services, customized on-site systems services and other energy
services to large commercial and industrial customers.
Solutions, directly or through subsidiaries, provides energy
management services, often on a turnkey basis. Energy
management services may involve the marketing, sale,
installation, operation and maintenance of various products
and services related to the business of energy management and
demand-side management, and may include energy audits;
facility design and process enhancements; construction,
maintenance and installation of and training client personnel
to operate energy conservation equipment; design,
implementation, monitoring and evaluation of energy
conservation programs; development and review of
architectural, structural and engineering drawings for energy
efficiencies; design and specification of energy consuming
equipment; and general advice on programs. Solutions also
provides conditioned power services, that is services designed
to prevent, control or mitigate adverse effects of power
disturbances on a customer's electrical system to ensure the
level of power quality required by the customer, particularly
with respect to sensitive electronic equipment, again as
approved by the Commission.
Solutions also markets comprehensive asset management
services, on a turnkey basis or otherwise, in respect of
energy-related
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systems, facilities and equipment, including distribution
systems and substations, transmission facilities, electric
generation facilities (stand-by generators and self-generation
facilities), boilers, chillers (refrigeration and coolant
equipment), HVAC and lighting systems, located on or adjacent
to the premises of a commercial or industrial customer and
used by that customer in connection with its business
activities, as previously permitted by the Commission.
Solutions also provides these services to qualifying and
non-qualifying cogeneration and small power production
facilities under the Public Utility Regulatory Policies Act of
1978 ("PURPA").
Solutions provides consulting services to associate and
non-associate companies. The consulting services may include
technical and consulting services involving technology
assessments, power factor correction and harmonics mitigation
analysis, meter reading and repair, rate schedule design and
analysis, environmental services, engineering services,
billing services, risk management services, communications
systems, information systems/data processing, system planning,
strategic planning, finance, feasibility studies and other
similar or related services. Solutions also offers marketing
services to non-associate businesses in the form of bill
insert and automated meter-reading services, such as how to
set up a marketing program.
Solutions provides service line repair and extended warranties
with respect to all of the utility or energy-related service
lines that enter a customer's house, as well as utility bill
insurance and other similar or related services. Solutions may
also provide centralized bill payment centers for "one stop"
payment of all utility and municipal bills, and annual
inspection, maintenance and replacement of any appliance.
Solutions also is engaged in the marketing and brokering of
energy commodities including retail marketing activities.
Solutions also provides other goods and services, from time to
time, related to the consumption of energy and the maintenance
of property by those end-users, where the need for the service
arises as a result of, or evolves out of, the above services
and incidental services do not differ materially from the
enumerated services.
In connection with its activities, Solutions from time to time
may form new subsidiaries to engage in the above activities or
acquire the securities or assets of non-associate companies
that derive substantially all of the revenue from the above
activities.
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Provision of the above goods and services which closely relate
to the system's core energy business is intended to further
Conectiv's goal of becoming a full service energy provider.
[Footnotes omitted. Emphasis added.]
To the extent that Solutions is merged into CSI, authorization
is requested for CSI to succeed to the authorities granted to Solutions
in the Merger Order.(6)
B. Merge Altemp Energy Systems, Inc. into CSI. Altemp Energy
Systems, Inc., is a small HVAC company and is also a
subsidiary of CSI. The merger up into CSI of this subsidiary
does not change the nature of CSI's business.
C. The capital stock of CTS will be contributed to CSI by
Conectiv. The capital contribution by Conectiv is deemed
exempt under rule 45(b)(4) and the acquisition of the stock by
CSI is deemed exempt under Rule 58. CTS was formerly named
Atlantic Thermal Systems, Inc. ("ATS") and was described in
the Merger Order as follows:
ATS and its subsidiaries develop, own and operate thermal
heating and cooling systems. ATS also provides other
energy-related services to business and institutional energy
users. ATS has made investments in capital expenditures
related to district heating and cooling systems to serve the
business and casino district in Atlantic City, NJ. ATS is also
pursuing the development of thermal projects in other regions
of the U.S.
CTS will be maintained as a separate subsidiary of CSI for the
foreseeable future and appropriate Rule 58 reports will
reflect post-Merger investments as investments in Rule 58
activities.
D. The capital stock of Conectiv Communications, Inc. ("CCI")
will be contributed to CSI by Conectiv. CCI is an exempt
telecommunications company and it will be maintained as a
separate subsidiary of CSI(7). Future funding of CCI by CSI
would be exempt under Section 34.
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(6) In addition, subsequent to the Merger Order, securities owned by CSI in
Power Consulting Group, Inc. a Rule 58 company, were sold at book value to
Conectiv Solutions. There is no provision in the Act requiring commission
pre-approval for the sale of a security of a non-utility. The acquisition of the
security by Solutions is exempt under Rule 58 as the acquisition of an
energy-related company under Rule 58. Power Consulting Group, Inc. is described
in the Merger Order as a subsidiary of CSI that provides electrical,
engineering, testing and maintenance services to large commercial and industrial
customers. Power Consulting Group, Inc. will be merged into CSI after the merger
of Solutions and CSI.
(7) As noted in the Merger U-1, Coastal, an exempt telecommunications subsidiary
of AEE is to be merged with Conectiv Communications, Inc. ("CCI").
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E. Conectiv will contribute the ownership interest in Enerval to
CSI. As noted in the Merger Order, Enerval is a company which
provides energy management services, including natural gas
procurement, transportation and marketing. As contemplated by
the Merger Order AEE purchased the remaining 50% interest in
Enerval subsequent to the Merger Order. Enerval will be
maintained as a separate subsidiary of CSI for the foreseeable
future.
F. The transfer to CSI of certain contracts and assets currently
held by a division of Delmarva trading as Conectiv Energy. The
transfers will require the approvals of the Delaware Public
Service Commission and the Virginia State Corporation
Commission, but do not require the preapproval of this
Commission since the assets being transferred are not utility
assets.
Although Enerval and CTS are Rule 58 companies and will be subject to
Rule 58 reporting requirements, CSI will not derive its revenues predominantly
from Rule 58 activities and will not be an "energy-related" company as defined
in Rule 58.
5. CES, formerly named Delmarva Energy Company, is described in the Merger
Order as "currently engaged, directly and through its 50%-owned
subsidiary [Conectiv Energy/CNE Energy Services LLC] in Rule 58 energy
marketing activities." CES will become the subsidiary focused on energy
supply and marketing through the following restructuring steps:
A. Petron Oil Corporation ("Petron") will be merged with and into
CES. Petron is an energy marketing company, the securities of
which were acquired by CES post-Merger pursuant to Rule 58 as
was reported on Form U-9C-3.
B. The capital stock in Delmarva Operating Services Company will
be transferred up to Conectiv by capital dividend and then
contributed by Conectiv to CES in an exempt capital
contribution. The name Delmarva Operating Services Company
will be changed to Conectiv Operating Services Company and the
company will be maintained as a separate subsidiary. CES will
continue to utilize Conectiv/ CNE Energy Services LLC for
energy marketing activities. In addition, CES has recently
acquired interests in two subsidiaries pursuant to Rule 58.
The subsidiaries are engaged in storage and marketing of
natural gas.
All of the activities of CES described above are and will be Rule 58
activities such that CES will qualify as a company whose revenues are
predominantly derived from Rule 58 activities.
PHASE TWO:
Phase Two will be implemented as appropriate after giving consideration
to electric deregulation at the state and federal level, tax impacts and related
issues. After the completion
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of Phase Two, which is expected to occur between the end of 1999 and the end of
2001, Conectiv is expected to have only three active direct non-utility
subsidiaries (other than the service company):
1) CSI which will focus on energy-related services and the marketing
of energy and related products to retail customers;
2) CES, which will focus on energy supply and marketing to wholesale
and industrial customers including affiliates; and
3) CPI which will own most of the non-utility investments which are
more passive in nature.
Phase Two Transactions and Effect
1) ASP and ATE will be merged into their sister company, CPI, and CPI would
succeed to any authority granted to ATE with respect to investments in
EnerTech Capital Partners, LP.(8) ATE's investments in Black Light Power,
Inc. and Emax Solution Partners, LP may be retained by CPI or dividended by
CPI to Conectiv for tax or other reasons. As finally constituted, CPI will
hold certain non-utility permissible investments that, except for a few
minor exceptions, are not energy-related activities under Rule 58. Future
investments in CPI will be made pursuant to Rule 52. If CPI should acquire
a security of a company engaged in activities that qualify under Rule 58,
appropriate reporting will be made on Form U-9C-3. CPI will also hold the
limited partnership interests in Pedricktown Cogeneration Limited
Partnership and Vineland Cogeneration Limited Partnership.(9)
2) AGI will be merged into CES. AGI, as discussed in the Merger Order was
formed to develop, own and operate independent power production projects.
AGI's investment in Energy Investors Fund II may be retained by AGI and may
be dividended to Conectiv for tax or other reasons.
In addition, ATS Operating Services, Inc. may be merged with Thermal Energy L.P.
I during Phase Two.
ADDITIONAL REQUESTS
Although not currently contemplated, Conectiv may seek to have other
companies authorized by this Commission by later order or may acquire other
direct subsidiaries under the terms of Sections 32, 33 or 34 of the Act and/or
Rule 58. At this point Conectiv anticipates that any such acquisition would be
made by one of the first-tier subsidiaries resulting after the
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(8) In the Merger Order, EnerTech was described as "a limited partnership that
will invest in and support a variety of energy technology growth companies"
citing Rule 58(b)(1)(ii). The ownership interests in EnerTech may be transferred
to Conectiv rather than being retained by CPI.
(9) The Binghamton Cogeneration Limited partnership has been sold. Binghamton
General and Binghamton Limited are being retained due to indemnification
obligations.
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restructuring as described above, but it does not want to preclude the option of
additional first-tier companies. Conectiv also requests that the three direct
subsidiaries (CES, CSI and CPI) be authorized to form intermediate parent
companies and project companies to engage in the authorized non-utility
businesses from time to time as the exigencies of the business and concerns for
limitations on liability may dictate. This would grant to the other two
second-tier subsidiaries the authority already possessed by Solutions to be
succeeded to by CSI as discussed above.
(a) Describe briefly, and where practicable state the approximate amount of,
any material interest in the proposed transaction, direct or indirect, of
any associate company or affiliate of the applicant or any affiliate of any
such associate company.
Not applicable.
(b) If the proposed transaction involves the acquisition of securities not
issued by a registered holding company or a subsidiary thereof, describe
briefly the business and property, present or proposed, of the issuer of
such securities.
Not applicable.
(c) If the proposed transaction involves the acquisition or disposition of
assets, describe briefly such assets, setting forth original cost, vendor's
book cost (including the basis of determination) and applicable valuation
and qualifying reserves.
Not applicable.
ITEM 2. FEES COMMISSIONS AND EXPENSES:
(a) State (1) the fees, commissions and expenses paid or incurred, or to be
paid or incurred, directly or indirectly, in connection with the proposed
transaction by the applicant or declarant or any associate company thereof,
and (2) if the proposed transaction involves the sale of securities at
competitive bidding, the fees and expenses to be paid to counsel selected
by applicant or declarant to act for the successful bidder.
It is estimated that the fees, commissions and expenses ascertainable
at this time to be incurred by Conectiv in connection with the preparation of
this post-effective amendment are as follows:
Fees for Outside Counsel *
Miscellaneous Expenses *
Total *
* To be filed by amendment.
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(b) If any person to whom fees or commissions have been or are to be paid in
connection with the proposed transaction is an associate company or an
affiliate of the applicant or declarant, or is an affiliate of an
associate company, set forth the facts with respect thereto.
This application/declaration was prepared by personnel of Conectiv
Resource Partners, Inc., whose time will be allocated to affected companies at
cost.
ITEM 3. APPLICABLE STATUTORY PROVISIONS:
(a) State the sections of the Act and the rules thereunder believed to be
applicable to the proposed transaction. If any section or rule would be
applicable in the absence of a specific exemption, state the basis of
exemption.
Sections 9 and 10 are applicable to the acquisition of securities of
non-utility companies by other non-utility companies in the Conectiv System
unless Rule 58 is applicable or the acquisition qualifies under Sections 32, 33
or 34. Unless Rule 58 applies, the entry into a new line of business by a System
Company apparently requires approval under Sections 9, 10 and 11 even though one
or more other System companies were previously permitted to engage in that line
of business. However the requisite findings under Sections 10 and 11 should be
deemed to have been made since the permissibility of a particular line of
business should not change due to the particular non-utility subsidiary engaged
in the line of business.
This Commission does not have jurisdiction over the disposition of
non-utility securities or assets.
To the extent that the proposed restructurings involve a merger of a
non-utility subsidiary into a parent company, the transaction is structurally
similar to a liquidating dividend by a non-utility company. The order issued by
this Commission addressing certain financing transactions (Release No. 26833
dated February 26, 1998) (The "Financing Order") authorized the non-utility
subsidiaries of Conectiv "with excess funds" to issue a "dividend out of capital
surplus to the full extent permitted by the law of the State where the
Non-utility Subsidiary is incorporated." The authorization requested herein is
similar to that granted in the Financing Order.
A capital contribution by Conectiv of a non-utility security to another
non-utility subsidiary is exempt under Rule 45(b)(4).
ITEM 4. REGULATORY APPROVAL.
(a) State the nature and extent of the jurisdiction of any State commission
or any Federal commission (other than the Securities and Exchange
Commission) over the proposed transaction.
Not applicable.
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(b) Describe the action taken or proposed to be taken before any commission
named in answer to paragraph (a) of this item in connection with the
proposed transaction.
Not applicable.
ITEM 5. PROCEDURE.
(a) State the date when Commission action is requested. If the date is less
than 40 days from the date of the original filing, set forth the reasons
for acceleration.
The Commission is respectfully requested to issue and publish the
requisite notice under Rule 23 with respect to the filing of this Application
not later than October 30, 1998, such notice to specify a date not later than
November 25, 1998 by which comments may be entered, permitting the Commission to
issue an order granting and permitting the Application to become effective.
Certain transactions involve tax benefits that will be lost if the transactions
are not concluded by December 31, 1998.
(b) State (i) whether there should be a recommended decision by a hearing
officer, (ii) whether there should be a recommended decision by any other
responsible officer of the Commission, (iii) whether the Division of
Corporate Regulation may assist in the preparation of the Commission's
decision, and (iv) whether there should be a 30-day waiting period between
the issuance of the Commission's order and the date on which it is to
become effective.
It is submitted that a recommended decision by a hearing or other
responsible officer of the Commission is not needed with respect to the proposed
transactions. The Office of Public Utility Regulation of the Division of
Investment Management may assist in the preparation of the Commission's
decision. There should be no waiting period between the issuance of the
Commission's order and the date on which it is to become effective.
ITEM 6. EXHIBITS AND FINANCIAL STATEMENTS
The following exhibits are made a part of this statement:
(a) Exhibits
E-5 Conectiv System Organization Chart after Phase One (to be
filed under cover of Form SE)
E-6 Conectiv System Organization Chart after Phase Two (to be
filed under cover of Form SE)
F-1 Opinion of counsel (To be filed by amendment.).
G-1 Proposed notice pursuant to Rule 22(f).
(b) Financial Statements
Not Applicable
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ITEM 7. INFORMATION AS TO ENVIRONMENTAL EFFECTS
(a) Describe briefly the environmental effects of the proposed transaction in
terms of the standards set forth in Section 102(2)(C) of the National
Environmental Policy Act (42 U.S.C. 4312(2)(C)). If the response to this
item is a negative statement as to the applicability of Section 102(2)(C)
in connection with the proposed transaction, also briefly state the
reasons for that response.
As more fully described in Item 1(a), the proposed transactions subject
to the jurisdiction of this Commission relate to the restructuring of the
ownership of various wholly-owned subsidiaries and passive investments. The
proposed transactions involve no major federal action significantly affecting
the human environment.
(b) State whether any other federal agency has prepared or is preparing an
environmental impact statement ("EIS") with respect to the proposed
transaction. If any other Federal agency has prepared or is preparing an
EIS, state which agency or agencies and indicate the status of that EIS
preparation.
None.
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SIGNATURE
Pursuant to the requirements of the Public Utility Holding Company Act
of 1935, the undersigned companies have duly caused this Post-Effective
Amendment No. 3 to Form U-1 to be signed on their behalf by the undersigned
thereunto duly authorized.
DATE: CONECTIV
CONECTIV ENERGY SUPPLY COMPANY
DELMARVA CAPITAL INVESTMENTS, INC.
CONECTIV SERVICES, INC.
CHRISTIANA CAPITAL MANAGEMENT, INC.
POWER CONSULTING GROUP, INC.
CONECTIV SOLUTIONS, LLC
ALTEMP ENERGY SYSTEMS, INC.
DELMARVA SERVICES COMPANY
CONECTIV COMMUNICATIONS, INC.
ATLANTIC ENERGY ENTERPRISES, INC.
ATLANTIC ENERGY INTERNATIONAL, INC.
ATLANTIC GENERATION, INC.
ATLANTIC SOUTHERN PROPERTIES, INC.
ATE INVESTMENT, INC.
COASTALCOMM, INC.
ATLANTIC ENERGY TECHNOLOGY, INC.
BINGHAMTON GENERAL, INC.
BINGHAMTON LIMITED, INC.
PEDRICK LIMITED, INC.
PEDRICK GENERAL, INC.
VINELAND LIMITED, INC.
VINELAND GENERAL, INC.
ATS OPERATING SERVICES, INC.
THE EARTH EXCHANGE, INC.
PETRON OIL CORPORATION
October 15, 1998 /s/ L. M. Walters
--------------------------
L. M. Walters
Treasurer
THERMAL ENERGY LPI BY ITS
GENERAL PARTNER, ATLANTIC JERSEY
THERMAL SYSTEMS, INC.
October 15, 1998 /s/ L. M. Walters
--------------------------
L. M. Walters
Treasurer
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EXHIBIT G-1
Conectiv et al. (70-9069)
Notice of Proposed Restructuring of System Ownership of Non-utility
Businesses and Proposed Authority to Establish Intermediate Parent and Project
Subsidiaries in the Future.
Conectiv, 800 King Street, Wilmington, DE 19899, a registered holding
company, has filed a declaration pursuant to Sections 6(a), 7, 9(a), 10 and
12(b) of the Act and Rule 45 thereunder.
Conectiv proposes certain actions designed to simplify and consolidate
the non-utility subsidiaries. The restructuring would be accomplished in two
phases: Phase One will be implemented as soon as practicable following the
issuance of an order permitting this application to become effective. Phase Two
will be completed as appropriate giving consideration to electric deregulation
at the state and federal level and to tax impacts and related issues but in no
event by the end of 2001. Following Phase Two, the number of active direct
nonutility(1) subsidiaries of Conectiv would be reduced to three(2)
1. Conectiv Services, Inc. ("CSI"), which will focus on
energy-related services and the marketing of energy to retail
customers, will be the surviving corporation following a
mergers of Conectiv Solutions LLC, Altemp Energy System, Inc.,
and Power Consulting Group, Inc. Each of these companies has
been authorized to provide energy-related services to retail
consumers. (See Conectiv, HCAR No. 26832 dated February 25,
1998). CSI would succeed to each of the authorities previously
granted to the predecessor companies. CSI would also own four
wholly-owned subsidiaries: Conectiv Plumbing LLC, a company
required under New Jersey law in connection with the heating,
ventilation and air conditioning services provided by CSI;
Conectiv Thermal Systems, Inc., a company that provides
thermal energy management services; and Conectiv
Communications, Inc., an exempt telecommunications company;
and Enerval, LLC, a company providing energy management
services.
2. Conectiv Energy Supply, Inc. (CES)(formerly Delmarva Energy
Company), which will focus on energy supply and marketing to
wholesale and industrial customers, including affiliates, will
be the surviving company after a merger into CES of Petron Oil
Company, an energy marketing company acquired pursuant to Rule
58. Also during Phase One, ownership will be transferred to
CES of Delmarva Operating Services Company ("DOSC"), a company
providing
- -------------------------
(1) Conectiv's two utility subsidiaries (Delmarva and ACE) and their
subsidiaries are unaffected by the proposed restructuring. Similarly, the
system's service company, Conectiv Resource Partners, Inc., is unaffected.
(2) Conectiv also has an inactive subsidiary named Conectiv Brands, Inc., which
will not commence business nor be funded until authorization is received from
this Commission pursuant to another filing.
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management services to independent production companies or
exempt wholesale generators. Depending on the results of a
pending tax analysis, the transfer may be accomplished by (1)
an asset for stock merger in which Delmarva Capital
Investments, Inc. ("DCI"), owner of the DOSC securities would
receive CES securities in exchange for the assets or
securities of DOSC or (2) a dividend by DCI to Conectiv of the
shares of DOSC followed by a capital contribution of the
shares to CES. CES will continue to own securities of
Conectiv/CNE Energy Services LLC.
3. Delmarva Capital Investments, Inc. which will be renamed
Conectiv Properties and Investments, Inc. ("CPI") will own
certain non-utility investments which are more passive in
nature, except that Conectiv may elect to retain direct
ownership of certain passive investments depending on tax
considerations. CPI will be the surviving corporation
following mergers with Delmarva Services Company, Christiana
Capital Management, Inc., Atlantic Energy International, Inc,
and Atlantic Energy Technology, Inc. (AET)(which will be the
surviving corporation following a merger of The Earth
Exchange, Inc. into AET). The following investments will be
transferred to CPI: D & E Communications, Energy Investors
Fund, and Tech Leaders II, LP. DCI investments in DCI I, Inc.,
DCI II, Inc. and DCTC-Burney, Inc. will continue to be held.
Three additional companies will remain in existence during Phase One
and will be eliminated during Phase Two:
4. Atlantic Southern Properties, Inc. will remain a direct
subsidiary of Conectiv after Phase One, but will be merged
into CPI in Phase Two.
5. Atlantic Generation, Inc., (AGI) will remain a direct
subsidiary of Conectiv during Phase I, but three subsidiaries
of AGI (Pedrick General, Inc., Binghamton General, Inc. and
Vineland General, Inc. ) will be merged into AGI during Phase
One. In Phase Two AGI will be merged into CES.
6. ATE Investment, Inc. ("ATE") will remain a direct subsidiary
of Conectiv after Phase One, but during Phase One, ownership
of three subsidiaries of AGI (Pedrick Limited, Inc., Vineland
Limited, Inc. and Binghamton Limited, Inc.) will be
transferred to ATE. Depending on the results of a pending tax
analysis, the transfer may be accomplished by (1) an asset for
stock merger in which AGI would receive ATE securities in
exchange for the assets or securities of the three companies
or (2) a dividend by AGI to Conectiv of the shares of the
companies followed by a merger of the companies into AGI or a
capital contribution of the shares to AGI followed by a merger
up into AGI. ATE will be merged into CPI in Phase Two.
Following Phase Two, Conectiv will have only three active direct
non-utility subsidiaries (other than the service company) unless other companies
have been authorized by this
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Commission by later order or other direct subsidiaries are acquired under the
terms of Sections 32, 33 or 34 of the Act and/or Rule 58. At this point,
Conectiv anticipates that any such acquisition would be made by one of the
first-tier subsidiaries, but it does not want to preclude the option of
additional first-tier companies. Conectiv also requests that the three direct
subsidiaries of Conectiv (CES, CSI and CPI) be authorized to form intermediate
parent companies and project companies to engage in the authorized non-utility
businesses from time to time as the exigencies of the business and concerns for
limitations on liability may dictate.
For the Commission, by the Division of Investment Management, pursuant
to delegated authority.
Jonathan G. Katz
Secretary
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