SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.
FORM U-1/A
AMENDMENT NO. 2
TO
FORM U-1
APPLICATION
UNDER THE
PUBLIC UTILITY HOLDING COMPANY ACT OF 1935
NGE Resources, Inc.
One Commerce Plaza
Suite 2006A - 20th Floor
Albany, New York 12260
(Name of company or companies filing this statement and
address of principal executive offices)
Daniel W. Farley
c/o NGE Resources, Inc.
One Commerce Plaza
Suite 2006A - 20th Floor
Albany, New York 12260
Telephone: (518) 434-3014
(Names and addresses of agents for service)
Copies to:
Leonard Blum, Esq.
Huber Lawrence & Abell
605 Third Avenue
New York, New York 10158
Telephone: (212)682-6200
Joanne Rutkowski, Esq.
LeBouef, Lamb, Greene & MacRae, L.L.P.
1875 Connecticut Avenue, N.W.
Washington, D.C. 20009
Telephone: (202) 986-8000
<PAGE>
This Amendment No. 2 on Form U-1/A to the Form U-1 of NGE
Resources, Inc. is being filed for the purpose of amending Item
1.C. to read as follows:
Item 1. Description of Proposed Transaction.
C. Proposed Reorganization
HoldCo and GenSub were incorporated under the laws of the
State of New York for the purpose of carrying out the proposed
transactions described in this application. HoldCo and GenSub
are currently direct, wholly-owned subsidiaries of NYSEG.
Neither HoldCo nor GenSub currently owns any utility assets or
currently is a "public utility company" or a "holding company"
for purposes of the 1935 Act.
NYSEG, a regulated public utility incorporated under the
laws of the State of New York, is engaged principally in the
business of generating, purchasing, transmitting and distributing
electricity, and purchasing, transporting and distributing
natural gas to the public in the central, eastern and western
parts of New York State. NYSEG provides electricity to
approximately 808,000 customers and provides natural gas to
approximately 238,000 customers. NYSEG's service territory is
not expected to change as a result of the proposed corporate
reorganization. A map of NYSEG's service territory is attached
hereto as Exhibit E-1. In providing this service, NYSEG is
subject to regulation by the PSC under the Public Service Law of
the State of New York with respect to retail rates and to
regulation by the FERC with respect to wholesale rates. NYSEG is
currently not subject to the 1935 Act because it is not a
"holding company" or a "subsidiary company" thereof as such terms
are defined in the 1935 Act.{3}
NYSEG has a number of subsidiaries that are not "public
utility companies" for purposes of the 1935 Act. These include
NGE Enterprises, Inc., a Delaware corporation ("Enterprises") and
Somerset Railroad Corporation, a New York corporation("SRC").
Enterprises is a wholly-owned subsidiary of NYSEG and was formed
in April 1992 to hold the stock of certain non-utility
subsidiaries of NYSEG and to conduct energy service business
activities through its direct and indirect subsidiaries. As a
result of the proposed holding company restructuring, Enterprises
will be a direct subsidiary of HoldCo. Enterprises' current
direct and indirect subsidiaries, which are listed below, will
remain direct and indirect subsidiaries of Enterprises after the
proposed holding company restructuring.
_______________
{3} NYSEG may temporarily become a statutory "holding company"
under the 1935 Act if certain of NYSEG's coal-fired generation
assets are transferred to GenSub, which is currently a subsidiary
of NYSEG, prior to the Effective Time. Upon such transfer, NYSEG
will claim exemption from the 1935 Act pursuant to Section
3(a)(1) or 3(a)(2) of the 1935 Act in accordance with Rule 2
promulgated under the 1935 Act. The issue will be mooted when,
at the Effective Time, GenSub becomes a direct subsidiary of
HoldCo.
NGE Technology Corporation ("NGE Technology"), a Delaware
corporation, is a wholly-owned subsidiary of Enterprises and was
formed to own Enterprises' investment in EnerSoft Corporation.
EnerSoft Corporation ("EnerSoft"), a Delaware corporation,
is a wholly-owned subsidiary of NGE Technology. It is in the
process of dissolving.
NGE Environmental, Inc. ("NGE Environmental"), a Delaware
corporation, is a wholly-owned subsidiary of Enterprises and was
formed to own Enterprises' investments in environmental
engineering and consulting services businesses.
NGE Funding Corporation ("NGE Funding"), a Delaware
corporation, is a wholly-owned subsidiary of Enterprises and
provides financial services such as loans and leases for energy
services-related equipment installations.
NGE EnergyPoints, Inc. ("EnergyPoints"), a Delaware
corporation, is a wholly-owned subsidiary of Enterprises and
provides energy usage information, utility bill consolidation and
bill payment services for large, multi-site industrial customers.
S-H-N Technologies, L.L.C. ("S-H-N"), a Delaware limited
liability company, is owned 50% by NGE Environmental and 50% by
S-H-U USA Corp., a subsidiary of the German firm Saarberg-Holter
Umweltechnick GmBH. S-H-N provides clean air solutions for the
international utility market.
XENERGY Inc. ("XENERGY"), a Massachusetts corporation, is a
wholly-owned subsidiary of Enterprises and is an energy services,
information systems and consulting company that specializes in
energy management, conservation engineering and demand side
management. In addition, by order of the FERC dated June 9,
1997, XENERGY received authorization to sell wholesale power at
market-based rates.
XENERGY Canada, Inc. ("XENERGY Canada"), incorporated in
Quebec, Canada, is a wholly-owned subsidiary of XENERGY and is
the software developer of a utility client management system.
XENERGY International, Inc. ("XENERGY International"), a
Delaware corporation, is a wholly-owned subsidiary of XENERGY and
is an energy services, information systems and consulting company
that specializes in energy management, conservation engineering
and demand-side management in the United Kingdom and Spain.
KENETECH Energy Management, Inc. ("KENETECH"), a
Massachusetts corporation, is a wholly-owned subsidiary of
XENERGY and is an energy services company specializing in energy
management.
KEM 1991, Inc. ("KEM 1991"), a Delaware corporation, is a
wholly-owned subsidiary of KENETECH and is an energy services
company specializing in energy management.
KENETECH Energy Management International, Inc. ("KENETECH
International"), a Delaware corporation, is a wholly-owned
subsidiary of KENETECH and is an energy services company
specializing in energy management.
KEM Partners 1991, L.P. ("KEM Partners"), a Delaware limited
partnership, is a wholly-owned subsidiary of KEM 1991, and is an
energy services company specializing in energy management.
KENETECH Energy Management, Limited ("KENETECH Limited"), a
limited company formed in Ontario, Canada, is a wholly-owned
subsidiary of KENETECH International and is an energy services
company specializing in energy management.
SRC is a wholly-owned subsidiary of NYSEG and was formed in
August 1979 to own and operate a rail line which is used
primarily to transport coal and other materials to NYSEG's
Kintigh generating station. As a result of the proposed holding
company restructuring, SRC will be a wholly-owned subsidiary of
GenSub.
NYSEG's current corporate structure is shown in Appendix A
attached to this application.
NYSEG owns 100% of the capital stock of GenSub, which was
organized to engage in the generation business and own and
operate all or a part of NYSEG's coal-fired generation assets
consisting of its Kintigh, Homer City, Milliken, Goudey,
Greenidge, Hickling and Jennison generating stations and certain
associated assets and liabilities ("Generation Assets"). As a
result of the proposed transactions described in this
application, GenSub will become an "electric utility company"
under the 1935 Act. HoldCo, which will own all of the
outstanding common stock of both NYSEG and GenSub after the
Effective Time, will require Commission approval under Section
9(a)(2) of the 1935 Act. In addition, HoldCo is seeking a
Commission order declaring it exempt from all provisions of the
Act except Section 9(a)(2). Under the terms of the Plan of
Exchange, all of the outstanding shares of common stock of HoldCo
("HoldCo Common Stock"), which will then be owned by NYSEG, will
be canceled and all of the outstanding shares of NYSEG Common
Stock will be exchanged on a share-for-share basis for HoldCo
Common Stock ("Share Exchange"), subject to the rights of the
Stockholders to exercise their appraisal rights. Upon
consummation of the Share Exchange, each person who owned NYSEG
Common Stock immediately prior to the Share Exchange (other than
Stockholders who properly exercise their appraisal rights) will
own a corresponding number of shares and percentage of the
outstanding HoldCo Common Stock, and HoldCo will own all of the
outstanding shares of NYSEG Common Stock. It will not be
necessary for Stockholders to turn in their certificates for
stock certificates of HoldCo. Such certificates of NYSEG will
automatically represent HoldCo Common Stock.
<PAGE>
As an additional aspect of the proposed holding company
restructuring, NYSEG intends to commence transferring the
Generation Assets to GenSub as soon as practicable after
obtaining the mortgage trustee's release and any necessary
regulatory approvals, as more fully described hereafter. NYSEG
will retain its hydroelectric and nuclear generation assets. In
addition, immediately after the Effective Time, NYSEG intends to
transfer to HoldCo all of the common stock of GenSub and
Enterprises. NYSEG also intends to transfer to GenSub all of the
common stock of SRC. The reorganization pursuant to the Plan of
Exchange, the transfer of the Generation Assets to GenSub, the
transfer of GenSub and Enterprises common stock to HoldCo and the
transfer of SRC common stock to GenSub are referred to herein as
the "Reorganization."
Shares of NYSEG's Serial Preferred Stock (Cumulative, $100
Par Value), of which seven series are currently issued and
outstanding, and NYSEG's Serial Preferred Stock (Cumulative, $25
Par Value), of which two series are currently issued and
outstanding (collectively, the "NYSEG Preferred Stock"), will
remain securities of NYSEG after the Share Exchange. There are
currently no issued and outstanding shares of NYSEG's Preference
Stock (Cumulative, $100 Par Value). The shares of NYSEG
Preferred Stock issued and outstanding immediately prior to the
Share Exchange will not be converted or otherwise affected by the
Share Exchange and will continue as equity securities of NYSEG
with the same preferences, designations, relative rights,
privileges and powers, and subject to the same restrictions,
limitations and qualifications, as were applicable to such
securities prior to the Share Exchange.
The Share Exchange will not result in any change in the
outstanding indebtedness of NYSEG which will continue to be
obligations of NYSEG after the Share Exchange. NYSEG's first
mortgage bonds will continue to be secured by a first mortgage
lien on all of the properties of NYSEG that are currently subject
to such lien, other than the Generation Assets transferred and
released from the lien of NYSEG's first mortgage bond indenture.
Such indebtedness will be neither assumed nor guaranteed by
HoldCo in connection with the Share Exchange. The decision to
have the NYSEG Preferred Stock and such indebtedness of NYSEG
continue as securities and obligations of NYSEG is based upon a
desire not to alter, or potentially alter, the nature of the
investment represented by such securities and obligations, namely
a direct investment in a regulated utility.
As to holders of NYSEG Preferred Stock and NYSEG
indebtedness, the benefits of continuing as investors in NYSEG's
regulated utility business outweigh any loss of access to the
return on the Generation Assets, Enterprises and SRC. In that
regard, investors in priority position securities, such as the
holders of NYSEG Preferred Stock and NYSEG's first mortgage
bonds, benefit to the extent that such securities and obligations
have been issued by the corporate entity that holds directly
and/or has unrestricted access to the assets which generate a
substantial portion of the net earnings of the enterprise.
The corporate structure immediately after the Reorganization
is shown in Appendix A attached to this application.
Prior to the Share Exchange, HoldCo will apply to have its
common stock listed on the New York Stock Exchange, Inc.
("NYSE"). It is anticipated that HoldCo Common Stock will be
listed and traded on such stock exchange upon consummation of the
Share Exchange, whereupon HoldCo will be required to file reports
with the Commission pursuant to Section 13(a) of the Securities
Exchange Act of 1934, as amended ("1934 Act"). The NYSEG Common
Stock will cease to be listed on the NYSE following the Share
Exchange.
The consummation of the Reorganization, including the Plan
of Exchange, is subject to various conditions. These conditions
include the approval of the Commission under Section 9(a)(2) of
the 1935 Act and the granting by the Commission of an exemption
under Section 3(a)(1) of the 1935 Act as requested in this
application, and the approval of the PSC, the FERC, and the NRC.
The Plan of Exchange is subject to approval by the affirmative
vote of two-thirds of the votes of the outstanding shares of
NYSEG Common Stock at a Special Meeting of Stockholders currently
expected to be held on or about January 15, 1998. Since the
requisite order of the Commission is being obtained by this
application, the vote of the holders of NYSEG Preferred Stock is
not required in connection with the Plan of Exchange.
HoldCo will file with the Commission a Registration
Statement on Form S-4 ("Registration Statement") under the
Securities Act of 1933, as amended. The Prospectus and Proxy
Statement contained in the Registration Statement, a copy of
which will be filed by amendment as Exhibit C-1, will be filed
for the purpose of (i) registering the shares of HoldCo Common
Stock to be issued in exchange for the NYSEG Common Stock
pursuant to the Share Exchange as well as HoldCo Common Stock
that will be issued in lieu of NYSEG Common Stock under certain
NYSEG Common Stock plans and (ii) complying with the requirements
of the 1934 Act in connection with the solicitation of proxies of
the Stockholders.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Public Utility Holding
Company Act of 1935, the undersigned company has duly caused this
Amendment No. 2 to be signed on its behalf by the undersigned
thereunto duly authorized.
NGE Resources, Inc.
Date: November 17, 1997 By Daniel W. Farley
Daniel W. Farley
Secretary
