(As filed April 28, 2000)
File No. ________
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM U-1
APPLICATION/DECLARATION
UNDER THE
PUBLIC UTILITY HOLDING COMPANY ACT OF 1935
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Energy East Corporation
One Canterbury Green
Stamford, CT 06904
(Name of company filing this statement and
address of principal executive office)
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Energy East Corporation 1
(Name of top registered holding company parent)
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Kenneth M. Jasinski
Executive Vice President
and General Counsel
Energy East Corporation
One Canterbury Green
Stamford, Connecticut 06904
(Name and address of agent for service)
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1 Energy East will register following the consummation of its proposed
combinations with CMP Group, Inc., CTG Resources, Inc. and Berkshire
Energy Resources.
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The Commission is requested to send copies of all
notices, orders and communications in connection with
this Application/Declaration to:
William T. Baker, Jr., Esq. Adam Wenner, Esq.
J. Michael Parish, Esq. Vinson & Elkins, L.L.P.
Thelen Reid & Priest LLP 1455 Pennsylvania Avenue, N.W.
40 West 57th Street Washington, D.C. 20004-1008
New York, New York 10019
Frank Lee, Esq.
Huber Lawrence & Abell
605 Third Avenue
New York, New York 10158
2
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TABLE OF CONTENTS
Page
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ITEM 1. DESCRIPTION OF PROPOSED TRANSACTION.................................1
A. INTRODUCTION AND GENERAL REQUEST....................................1
1. GENERAL........................................................1
2. GENERAL REQUEST................................................1
B. DESCRIPTION OF THE PARTIES TO THE TRANSACTION.......................1
C. INTRA-SYSTEM PROVISION OF SERVICES..................................3
1. SERVICE COMPANY................................................3
2. PROVISION OF SERVICES BY UTILITY SUBSIDIARIES..................5
3. EXISTING AFFILIATE SERVICE AGREEMENTS..........................5
ITEM 2. FEES, COMMISSIONS AND EXPENSES......................................6
ITEM 3. APPLICABLE STATUTORY PROVISIONS.....................................7
ITEM 4. REGULATORY APPROVALS................................................7
A. NEW YORK PUBLIC SERVICE COMMISSION ("NYPSC")........................7
B. MAINE PUBLIC UTILITIES COMMISSION ("MPUC")..........................7
C. MASSACHUSETTS DEPARTMENT OF TELECOMMUNICATIONS AND ENERGY
DTE")...............................................................8
D. CONNECTICUT DEPARTMENT OF PUBLIC UTILITY CONTROL ("DPUC")...........8
ITEM 5. PROCEDURE...........................................................9
ITEM 6. EXHIBITS AND FINANCIAL STATEMENTS...................................9
ITEM 7. INFORMATION AS TO ENVIRONMENTAL EFFECTS............................10
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ITEM 1. DESCRIPTION OF PROPOSED TRANSACTION
A. INTRODUCTION AND GENERAL REQUEST
1. GENERAL
Energy East Corporation, a New York corporation ("Energy East") exempt
from registration by order under Section 3(a)(1) of the Public Utility Holding
Company Act of 1935, as amended (the "Act"),2 filed an Application/Declaration
on Form U-1 (File No. 70-09569) (the "Merger U-1") with the Securities and
Exchange Commission (the "Commission") under Sections 9(a)(2) and 10 of the Act
seeking approvals relating to the proposed acquisition by Energy East of CMP
Group, Inc., a Maine corporation ("CMP Group"), CTG Resources, Inc. a
Connecticut corporation ("CTG"), and Berkshire Energy Resources, a Massachusetts
business trust ("Berkshire") pursuant to which CMP Group, CTG and Berkshire will
each become a direct wholly-owned subsidiary of Energy East (the "Mergers").
Energy East will register as a holding company under the Act upon the
consummation of the acquisitions contemplated in the Merger U-1.
2. GENERAL REQUEST
This Application/Declaration seeks the authorization and approval of
the Commission with respect to the provision of intra-system services following
the registration of Energy East as a holding company. Specifically, Energy East
requests that the Commission approve the designation of its wholly-owned direct
subsidiary Energy East Management Corporation, a Delaware corporation ("EE
Management"), as a subsidiary service company in accordance with the provisions
of Rule 88 under the Act and the Services Agreements (as defined below) and find
that EE Management is so organized and will conduct its operations as to meet
the requirements of Section 13 of the Act and the Commission's rules under the
Act.
B. DESCRIPTION OF THE PARTIES TO THE TRANSACTION
Upon completion of the Mergers, Energy East will own, directly or
indirectly, interests in the following eight public utility companies (the
"Utility Subsidiaries"), each of which will be wholly-owned by entities within
the Energy East system, except as otherwise indicated:
o New York State Electric & Gas Corporation ("NYSEG"), a New York corporation
and a wholly-owned subsidiary of Energy East, which purchases, transmits
and distributes electricity and purchases, transports and distributes
natural gas in parts of New York.
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2 The Commission recently approved under a separate application (File No.
70-09545) the merger of Energy East with Connecticut Energy Corporation, a
Connecticut corporation, pursuant to which Connecticut Energy Corporation
became a wholly owned subsidiary of Energy East. Energy East Corporation,
et al., Holding Company Release No. 27128 (February 2, 2000).
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o Maine Natural Gas, L.L.C. ("Maine Natural Gas"), formerly known as CMP
Natural Gas, L.L.C., a Maine limited liability company, which distributes
natural gas in Maine and which is a joint venture between New England Gas
Development Corp. (holding a 17% interest), a wholly-owned subsidiary of
CMP Group, and Energy East Enterprises, Inc. ("Energy East Enterprises"), a
Maine corporation (holding an 83% interest), which is a wholly-owned
subsidiary of Energy East and a public utility holding company exempt from
all provisions of the Act except Section 9(a)(2), by order issued under
Section 3(a)(1). 3
o Central Maine Power Company ("Central Maine Power"), a Maine corporation,
the common stock of which is wholly-owned by CMP Group, which is primarily
engaged in transmitting and distributing electricity in Maine.
o Maine Electric Power Company, Inc. ("MEPCo"), a Maine corporation, which
owns and operates a 345kV transmission interconnection between the Maine -
New Brunswick, Canada international border at Orient, Maine. Central Maine
Power owns a 78.3% voting interest in MEPCo with the remaining interests
owned by two other Maine utilities.
o NORVARCO, a Maine corporation, which holds a 50% general partnership
interest in Chester SVC Partnership, a general partnership which owns a
static var compensator located in Chester, Maine, adjacent to MEPCo's
transmission interconnection. NORVARCO is a wholly-owned subsidiary of
Central Maine Power.
o The Southern Connecticut Gas Company ("Southern Connecticut Gas"), a
Connecticut corporation and a wholly-owned subsidiary of Connecticut
Energy, which is primarily engaged in the retail distribution and
transportation of natural gas in parts of Connecticut.
o Connecticut Natural Gas Corporation ("Connecticut Natural Gas"), a
Connecticut corporation and a wholly-owned subsidiary of CTG Resources,
which is primarily engaged in the retail distribution and transportation of
natural gas in parts of Connecticut.
o The Berkshire Gas Company ("Berkshire Gas"), a Massachusetts gas company
and a wholly-owned subsidiary of Berkshire, which is engaged in the sale
and distribution of natural gas in western Massachusetts.
As stated above, EE Management is an existing wholly-owned
direct subsidiary of Energy East. EE Management was originally organized in 1999
to invest the proceeds of the sale of Energy East's coal-fired generation
assets. Following registration of Energy East as a holding company, EE
Management proposes to provide the Energy East system companies with a variety
of administrative, management, and support services. Such services will be
provided in accordance with service agreements (the "Service Agreements") that
EE Management will enter into with each of its associate public-utility
companies and each of its associate non-utility companies that it serves. The
forms of these agreements are filed herewith as Exhibits B-1 and B-2,
respectively. A form of service agreement for the provision of service by
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3 The Commission recently approved under a separate application (File No.
70-09545) the merger of Energy East with Connecticut Energy Corporation, a
Connecticut corporation, pursuant to which Connecticut Energy Corporation
became a wholly owned subsidiary of Energy East. Energy East Corporation,
et al., Holding Company Release No. 27128 (February 2, 2000).
2
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associate public utility companies to other associate companies is filed
herewith as Exhibit B-3 and an appendix entitled "Service Company Policy and
Procedures" will be filed as Exhibit B-4 by amendment.
EE Management will be staffed by employees who will be transferred
over time from other Energy East system companies. In addition, it is
anticipated that EE Management will have access to certain employees who will
remain employees of other system companies. Employees of other system companies
who devote a portion of their time to EE Management will directly charge to EE
Management the applicable portion of such time, including appropriate
allocations of overhead costs.
A list of Energy East's other subsidiaries (the "Non-Utility
Subsidiaries") is set forth in the Merger U-1 and the exhibits thereto.
C. INTRA-SYSTEM PROVISION OF SERVICES
1. SERVICE COMPANY
In order to ensure adequate oversight and realize economies of scale,
certain administrative and service functions for the Energy East system will be
consolidated and provided through EE Management. As a general rule, the
individual system companies will continue to perform services that can benefit
from individualized application at the company level, with EE Management
offering system-wide coordination and strategy, oversight and other services
where economies can be captured by the centralization of services. In
particular, it is anticipated that, subject to the requirements or limitations
of state and federal law, the following classes of services may be offered by EE
Management to system companies:
o Accounting services, such as the maintenance of books and records,
preparation of financial and statistical reports, tax filings and
supervision of compliance with applicable laws and regulations;
o Audit services and management of an entity-wide framework of corporate
controls;
o Corporate planning services, such as the preparation of corporate plans,
budgets and financial forecasts, monitoring trends and evaluating business
opportunities;
o Executive services, such as providing general management and strategic
planning;
o Finance and treasury services, such as coordinating activities relating to
securities issuances, cash management services, investing activities,
monitoring capital markets, performing financial and economic analysis and
administering insurance programs;
o Governmental affairs services, such as lobbying governmental officials
and monitoring, reviewing and researching legislation;
o Human resource services, such as establishing and administering policies
and supervision of compliance with legal requirements in the areas of
employment, compensation, benefits and employee health, welfare, and
safety, processing of payroll and employee benefit payments, and the
coordination of contract negotiation and relations with labor unions; and
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o Legal services coordination among law and regulatory departments within the
Energy East system 4;
o Other corporate support services, which may include information/
telecommunication services, purchasing, contract administration, and
corporate communications.
The Service Agreements will provide methodologies to ensure that the
client companies pay to EE Management the cost of all services, computed in
accordance with the applicable rules and regulations (including, but not limited
to Rules 90 and 91) under the Act and appropriate accounting standards. Where
more than one company is involved in or has received benefits from a service
performed by EE Management, the Service Agreements will provide that client
companies will pay their fairly allocated pro rata share in accordance with the
methods set out in appendices to the Service Agreements. Thus, charges for all
services provided by EE Management to associate utility companies and
non-utility companies will be on an "at cost" basis as determined under Rules 90
and 91 under the Act.
No material change in the organization of EE Management, the methods
of allocating cost to associate companies, or in the scope or character of the
services to be rendered by EE Management, subject to Section 13 of the Act, or
any rule, regulation or order thereunder, shall be made unless and until EE
Management shall first have given the Commission written notice of the proposed
change not less than 60 days prior to the proposed effectiveness of any such
change. If, upon the receipt of any such notice, the Commission shall notify EE
Management within the 60-day period that a question exists as to whether the
proposed change is consistent with the provisions of Section 13 of the Act, or
of any rule, regulation or order thereunder, then the proposed change shall not
become effective unless and until EE Management shall have filed with the
Commission an appropriate declaration regarding such proposed change and the
Commission shall have permitted such declaration to become effective.
Energy East will structure the Service Agreements so as to comply with
Section 13 of the Act and the Commission's rules and regulations thereunder.
Rule 88 (b) provides that "[a] finding by the Commission that a
subsidiary company of a registered holding company . . . is so organized and
conducted, or to be conducted, as to meet the requirements of Section 13(b) of
the Act with respect to reasonable assurance of efficient and economical
performance of services or construction or sale of goods for the benefit of
associate companies, at cost fairly and equitably allocated among them (or as
permitted by [Rule 90], will be made only pursuant to a declaration filed with
the Commission on Form U-13-1, as specified in the instructions for that form,
by such company or the persons proposing to organize it." Notwithstanding the
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4 Transition teams are still in the process of evaluating whether it would be
economical and efficient for EE Management to provide its associate
companies with all of the listed services and whether additional services
may also be provided by EE Management.
4
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foregoing language, the Commission has on at least two recent occasions made
findings under Section 13(b) based on information set forth in an application on
Form U-1, without requiring the formal filing on a Form U-13-1. See Unitil
Corp., 51 SEC Docket 562 (Apr. 24, 1992); CINergy Corp., 57 SEC Docket 2353
(Oct. 21, 1994). In this Application, Energy East has submitted substantially
the same application information as would have been submitted in a Form U-13-1.
Accordingly, it is appropriate to find that EE Management will be so organized
and its business will be so conducted as to meet the requirements of Section
13(b), and that the filing of a Form U-13-1 is unnecessary, or, alternatively,
that this Application should be deemed to constitute a filing on Form U-13-1 for
purposes of Rule 88.
2. PROVISION OF SERVICES BY UTILITY SUBSIDIARIES
The Utility Subsidiaries may provide to one another or to other
associate companies within the Energy East system services incidental to their
utility businesses such as dispatch, maintenance and emergency repairs and other
services utilizing personnel with specialized expertise. Moreover, in accordance
with Rules 87, 90 and 91, certain goods may be provided through a leasing
arrangement or otherwise by one Utility Subsidiary to one or more associate
companies, and certain assets may be used by one Utility Subsidiary for the
benefit of one or more other associate companies. All such services provided to
Utility Subsidiaries or to EE Management by a Utility Subsidiary will be
rendered at fully distributed cost, fairly and equitably charged and/or
allocated and in accordance with any rules or codes of conduct applicable to any
of the Utility Subsidiaries in New York, Maine, Connecticut or Massachusetts, as
well as the Rules 90 and 91 under the Act. As appropriate, companies in the
Energy East system will enter into Service Agreements with the Utility
Subsidiaries in substantially the form filed herewith as Exhibit B-3.
3. EXISTING AFFILIATE SERVICE AGREEMENTS
The subsidiaries of Energy East, CMP Group, CTG, Connecticut Energy,
and Berkshire currently provide a variety of services and sell goods to other
companies in the same holding company systems under agreements which in some
cases are cost-based and in other cases are market-based. In some instances, the
corporate support services that are now provided by a subsidiary to an associate
company will be provided instead by EE Management. Energy East has determined
that most of the affiliate sales and service agreements that are currently in
effect within the five utility holding company groups are either exempt from the
requirements of Section 13(b) of the Act or may be performed pursuant to Rule
81, 83 or 87, as applicable, and Section 34 of the Act.
Energy East has identified two existing agreements for the sale of
goods or services that do not appear to fall within any statutory or
administrative exemption under the Act, as follows:
1. The Union Water-Power Company ("UWP"), a wholly owned subsidiary
of CMP Group which provides, among other things, utility construction support
services, energy efficiency performance contracting and energy use management
services, and real estate development services, is currently a party to five
agreements with Central Maine Power having various termination dates,
and is proposing to enter into a sixth agreement. Under these agreements, UWP
provides or will provide the following services:
o utility location services
o polesetting services
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o transmission tower services (specifically, raising the height of
existing towers)
o linework, preventive maintenance, storm restoration work on
Central Maine Power poles and towers
o inspection of transmission lines using infrared technology
o transformer vault repair services
UWP provides these services to Central Maine Power at market-based
rates which have been or will be submitted for approval to the MPUC. UWP also
provides all of these services to unaffiliated utilities and other customers in
the regular course of its business. The rates charged by UWP are based on
competitive rates in the marketplace and are comparable to the rates charged
Central Maine Power by other unaffiliated providers of similar services. After
the Merger, UWP proposes to offer like services to other Utility Subsidiaries in
the Energy East system.
2. CIS Service Bureau, L.L.C. ("CIS"), an indirect wholly owned
subsidiary of Connecticut Energy, provides customer information services to
Southern Connecticut Gas pursuant to an agreement under which CIS licenses the
required software from the vendor, and finances the implementation of the
customer information system, including costs of consulting services, software
modifications, and related hardware and database software licenses. CIS charges
Southern Connecticut Gas a monthly fee based on the number of Southern
Connecticut Gas customers billed. The fee has a fixed and variable component.
The fixed component covers CIS's investment in the implementation of the system
(approximately $8 million) and the variable component covers CIS's operating
costs. Under this agreement, CIS must provide a certain minimum level of service
to Southern Connecticut Gas for the fixed monthly fee. The cost to CIS to
provide these services, unless Southern Connecticut Gas specifically requests a
change in the service, does not alter the fees Southern Connecticut Gas pays
under the agreement. Thus, CIS assumes the risk of providing adequate service to
Southern Connecticut Gas for the fixed price. The charges to Southern
Connecticut Gas under this agreement are lower than the cost would be if
Southern Connecticut Gas were to acquire and own the operating system on its
own. Maintenance support for the Southern Connecticut Gas customer information
system is provided by CIS utilizing Southern Connecticut Gas employees under a
DPUC-approved service contract. CIS has been requested to provide proposals for
billing solutions to NYSEG and Maine Natural Gas and may offer similar customer
information services to other associate and non-associate utilities in the
future.
To the extent required, authorization is requested herein pursuant to
Section 13(b) and the rules thereunder to maintain the foregoing agreements in
effect, including entering into any extensions and renewals of such agreements,
following Energy East's registration as a holding company. In addition, UWP and
CIS request authority to enter into agreements with other associate Utility
Subsidiaries following Energy East's registration as a holding company on
substantially the same terms.
ITEM 2. FEES, COMMISSIONS AND EXPENSES
Estimated Legal Fees and Expenses $ *
Estimated Miscellaneous Expenses $ *
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Total $ *
* To be filed by amendment.
ITEM 3. APPLICABLE STATUTORY PROVISIONS
Section 13 of the Act and Rules 87, 88, 90 and 91 are considered
applicable to the proposed transactions.
To the extent that the proposed transactions are considered by the
Commission to require authorization, exemption or approval under any section of
the Act or the rules and regulations other than those set forth above, request
for such authorization, exemption or approval is hereby made.
ITEM 4. REGULATORY APPROVALS
Each of the public service commissions in New York, Maine,
Massachusetts, and Connecticut exercise some degree of regulatory oversight over
transactions between regulated public utilities and their affiliates and
associate companies.
A. NEW YORK PUBLIC SERVICE COMMISSION ("NYPSC").
Generally, the NYPSC has jurisdiction under Section 110 of the New
York Public Service Law over transactions between public utilities and their
affiliates to the extent of access to the accounts or records of such affiliates
relating to any such transactions. Section 110 also provides, generally, that
all management, construction, engineering or similar contracts between a utility
and an affiliate must be filed with the NYPSC and that any charges under such
contracts may not exceed the reasonable cost of performing such service. NYSEG
and its affiliates are subject to the affiliate transaction guidelines set forth
in the Agreement Concerning the Competitive Rate and Restructuring Plan of New
York State Electric & Gas Corporation dated October 9, 1997 in Case No.
96-E-0891 (the "Plan"), which was approved by the NYPSC in Case Nos. 96-E-0891,
93-E-0960 and 94-M-0349 by Order issued and effective January 27, 1998 and
opinion issued March 5, 1998. NYSEG filed cost allocation guidelines pursuant to
Section VIII 8.f of the Plan with the NYPSC on August 20, 1998.
B. MAINE PUBLIC UTILITIES COMMISSION ("MPUC").
The MPUC has jurisdiction under 35-A Maine Revised Statutes ss. 707.3
to review and approve all transactions between Maine public utility companies
and their affiliates under a standard that the transaction is not adverse to the
public interest. Under ss. 707.2, the MPUC may require the production of all
books, records, documents and other information relating to transactions between
a utility and its affiliates. Chapter 820 of the MPUC's Rules establishes
additional provisions governing transactions between a utility and its
affiliates, including pricing provisions relating to the provision of services.
Chapter 820 provides that any utility equipment, facility, service or personnel
used by an affiliate be charged to the affiliate at a tariffed rate if
available, at the market price if no tariffed rate exists, or otherwise at fully
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distributed cost. Chapter 820 follows the principles of the rules of the Federal
Communications Commission regarding cost allocations between a utility and its
affiliates. Under Chapter 820, equipment, facilities, services or personnel of a
utility affiliate used by that utility must be priced at the same price charged
non-affiliates, or if such a price is not available, then the affiliate must
charge the market price.
In its order approving the merger of CMP Group with Energy East,
issued January 4, 2000, Exhibit D-1 hereto (together with Order on
Reconsideration, dated February 24, 2000), the MPUC imposed, as a condition of
its approval, the requirement that Energy East and its affiliates, to the extent
that their activities relate to or in any way impact the operations, costs, or
revenues of Central Maine Power in Maine, be subject to the MPUC's jurisdiction
for discovery purposes and that they participate as a party in any proceeding
when deemed necessary by the MPUC. Further, in order to assure the MPUC that it
would also retain oversight over affiliate transactions for ratemaking purposes
after completion of the CMP Group Merger, CMP Group and Energy East agreed to
request that this Commission include, in any order approving the merger of CMP
Group and Energy East, the following language:
It is the Commission's intention that the Maine Public Utilities
Commission will retain the right to review and disallow costs of
services rendered by or to any Maine public utility company in the
Energy East Corporation registered holding company system that may be
subject to recovery in rates.5
That request was made in Amendment No. 3 to Energy East's Application/Declar-
ation on Form U-1 (File No. 70-09569), filed March 3, 2000.
C. MASSACHUSETTS DEPARTMENT OF TELECOMMUNICATIONS AND ENERGY
("MDTE").
The MDTE has jurisdiction pursuant to Section 94B of Chapter 164 of
the Massachusetts General Laws to review and approve all contracts between
Berkshire Gas and any affiliated company pursuant to which compensation will be
paid for services rendered unless the agreement explicitly subjects the level of
payment to subsequent review by the MDTE in a base rate proceeding. The MDTE has
also adopted Standards of Conduct that include pricing conditions on
transactions between regulated utilities such as Berkshire Gas and affiliated
entities. See 220 C.M.R. ss. 12.00 et seq. The MDTE's Standards of Conduct also
require Berkshire Gas to submit regular reports of its transactions with
affiliates.
D. CONNECTICUT DEPARTMENT OF PUBLIC UTILITY CONTROL ("DPUC")
The DPUC has jurisdiction under ss. 16-8c of the Connecticut General
Statutes to review affiliate transactions between a holding company or
subsidiary that is related to a public service company as necessary to protect
customers of the public service company from any adverse impacts. In its order
approving the merger of Energy East with Connecticut Energy Corporation, issued
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5 Order Approving Request for Approval of Reorganization and Affiliated
Interest Transactions, MPUC Docket No. 99-411 at 26 (January 4, 2000).
8
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December 16, 1999, (Docket No. 99-07-20, CNE Merger Docket), Exhibit D-2 hereto,
the DPUC imposed, as a condition of its approval, the requirement that any
modification to current cost allocation policies for Southern Connecticut Gas
resulting from the Mergers be filed for approval. The DPUC has previously
ordered that any proposed changes to existing Service Agreements between
Connecticut Energy Corporation and its subsidiaries be filed with the DPUC at
least 60 days prior to its effective date. See Docket No. 77-08-28, Reopening
May 21, 1997. In its order approving the merger of Energy East with CTG
Resources, Inc., issued January 19, 2000, (Docket No. 99-08-09, CTG Merger
Docket), Exhibit D-3 hereto, the DPUC imposed, as a condition of its approval,
the requirement that any modification to current cost allocation policies for
Connecticut Natural Gas resulting from the Mergers be filed, although without
the explicit condition that they be approved.
Except as stated above, no state or federal regulatory agency other
than the Commission under the Act has jurisdiction over the proposed
transactions.
ITEM 5. PROCEDURE
The Commission is requested to publish a notice under Rule 23 with
respect to the filing of this Application/Declaration as soon as practicable.
The Applicant requests that the Commission's order be issued as soon as the
rules allow, and that there should not be a 30-day waiting period between
issuance of the Commission's order and the date on which the order is to become
effective. The Applicant hereby waives a recommended decision by a hearing
officer or any other responsible officer of the Commission and consents that the
Division of Investment Management may assist in the preparation of the
Commission's decision and/or order, unless the Division opposes the matters
proposed herein.
ITEM 6. EXHIBITS AND FINANCIAL STATEMENTS.
A-1 Certificate of Incorporation of Energy East Management Corporation
A-2 By-Laws of Energy East Management adopted March 11, 1999
B-1 Form of Service Agreement between Energy East Management and Utility
Subsidiary (Appendix A to such Form of Agreement to be filed by
amendment)
B-2 Form of Service Agreement between Energy East Management and
Non-Utility Subsidiary (Appendix A to such Form of Agreement to be
filed by amendment)
B-3 Form of Service Agreement between Utility Subsidiary and other
Subsidiary or Energy East (Appendix A to such Form of Agreement to be
filed by amendment)
B-4 Service Company Policies and Procedures*
D-1 MPUC Order in Docket No. 99-411 (January 4, 2000 Order Approving
Request for Approval of Reorganization and Affiliated Interest
Transactions and February 24, 2000 Order on Reconsideration) (filed as
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Exhibit D-4 to Energy East's Amendment No. 3 to Form U-1, filed March
3, 2000, File No. 70-09569 and incorporated herein by reference)
D-2 DPUC Order in Docket No. 99-07-20 (December 16, 1999 Joint Application
of Energy East Corporation and Connecticut Energy Corporation for
approval of a change of control (filed as Exhibit D-2 to Energy East's
Amendment No. 2 to Form U-1, filed December 17, 1999, File No. 70-9545
and incorporated herein by reference)
D-3 DPUC Order in Docket No. 99-08-09 (January 19, 2000 Joint Application
of Energy East Corporation and CTG Resources, Inc. for approval of a
change of control (filed as Exhibit D-8 to Energy East's Amendment No.
2 to Form U-1, filed February 7, 2000, File No. 70-09569 and
incorporated herein by reference.)
F-1 Opinion of Counsel*
F-2 Past Tense Opinion of Counsel*
H Proposed Form of Notice
*To be filed by amendment.
ITEM 7. INFORMATION AS TO ENVIRONMENTAL EFFECTS
The Transaction will not involve major federal action significantly
affecting the quality of the human environment as those terms are used in
Section 102(2)(C) of the National Environmental Policy Act, 42 U.S.C. Section
4321 et seq. ("NEPA"). First, no major federal action within the meaning of NEPA
is involved. Second, consummation of the Transaction will not result in changes
in the operations of Energy East or its subsidiaries that would have any
significant impact on the environment. To the Applicants' knowledge, no federal
agency is preparing an environmental impact statement with respect to this
matter.
SIGNATURE
Pursuant to the requirements of the Public Utility Holding Company Act
of 1935, the undersigned Applicant has duly caused this Application/Declaration
to be signed on its behalf by the undersigned thereunto duly authorized.
Energy East Corporation
/s/ Robert D. Kump
---------------------------------
Name: Robert D. Kump
Title: Vice President and Treasurer
Date: April 28, 2000
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EXHIBIT A-1
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CERTIFICATE OF INCORPORATION
OF
ENERGY EAST MANAGEMENT CORPORATION
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ARTICLE I
NAME
The name of the Corporation is Energy East Management Corporation.
ARTICLE II
REGISTERED OFFICE AND REGISTERED AGENT
The registered office of the Corporation in the State of Delaware is
located at 1209 Orange Street, in the City of Wilmington, County of New Castle.
The name and address of the Corporation's registered agent is The Corporation
Trust Company, 1209 Orange Street, Wilmington, Delaware 19801.
ARTICLE III
CORPORATE PURPOSES
The nature of the business or purposes to be conducted or promoted by
the Corporation is to hold stock of other corporations and to engage in any
lawful act or activity for which corporations may be organized under the General
Corporation Law of the State of Delaware.
ARTICLE IV
CAPITAL STOCK
The total number of shares of capital stock that the Corporation shall
have authority to issue is two hundred (200) shares, which shall be shares of
Common Stock and shall have a par value of $.01 per share.
A-1-1
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ARTICLE V
INCORPORATORS
The name and mailing address of the Incorporator are as follows:
Name Mailing Address
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Dan L. Rosenbaum Huber Lawrence & Abell
605 Third Avenue
New York, New York 10158
ARTICLE VI
DIRECTORS
To the fullest extent permitted by the General Corporation Law of the
State of Delaware as the same exists or may hereafter be amended, a director of
the Corporation shall not be liable to the Corporation or its stockholders for
monetary damages for breach of fiduciary duty as a director.
I, THE UNDERSIGNED, being the Incorporator hereinbefore named, for the
purposes of forming a corporation pursuant to the General Corporation Law of the
State of Delaware, do make this Certificate of Incorporation hereby declaring
and certifying that the facts herein stated are true and, accordingly, have
hereunto set my hand this 11th day of March, 1999.
/s/ Dan L. Rosenbaum
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Dan L. Rosenbaum
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EXHIBIT A-2
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ENERGY EAST MANAGEMENT CORPORATION
BY-LAWS
OFFICES
1. The office of the Corporation shall be located in the City and
State designated in the Certificate of Incorporation. The Corporation may also
maintain offices at such other places within or without the United States as the
Board of Directors may, from time to time, determine.
SEAL
2. The corporate seal shall have inscribed thereon the name of the
Corporation, the year of its organization and the words "CORPORATE SEAL,
DELAWARE". If authorized by the Board of Directors, the corporate seal may be
affixed to any certificates of stock, bonds, debentures, notes or other
engraved, lithographed or printed instruments, by engravings, lithographing or
printing thereon such seal or a facsimile thereof, and such seal or facsimile
thereof so engraved, lithographed or printed thereon shall have the same force
and effect, for all purposes, as if such corporate seal had been affixed thereto
by indentation.
STOCKHOLDERS' MEETINGS
3. All meetings of the stockholders shall be held at the principal
office of the Corporation, or at such other location as shall be stated in the
notice of the meeting. All meetings of stockholders shall be presided over by
the President or a Vice President except when by statute the election of a
presiding officer is required.
4. The annual meeting of stockholders shall be held at such date and
time as shall be stated in the notice of the meeting, at which the stockholders
entitled to vote shall elect a Board of Directors, and transact such other
business as may properly be brought before the meeting.
5. Except as otherwise provided by statute, at all meetings of
stockholders of the Corporation, the presence at the commencement of such
meetings in person or by proxy of stockholders holding of record a majority of
the total number of shares of the Corporation then issued and outstanding and
entitled to vote, shall be necessary and sufficient to constitute a quorum for
the transaction of any business. The withdrawal of any stockholder after the
commencement of a meeting shall have no effect on the existence of a quorum,
after a quorum has been established at such meeting.
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Despite the absence of a quorum at any annual or special meeting of
stockholders, the stockholders, by a majority of the votes cast by the holders
of shares entitled to vote thereon, may adjourn the meeting. At any such
adjourned meeting at which a quorum is present, any business may be transacted
at the meeting as originally called if a quorum had been present.
6. Each stockholder entitled to vote or to express consent or
dissent without a meeting, may do so by proxy; provided, however, that the
instrument authorizing such proxy to act shall have been executed in writing by
the stockholder himself, or by his attorney-in-fact thereunto duly authorized in
writing. No proxy shall be valid after the expiration of eleven months from the
date of its execution, unless the person executing it shall have specified
therein the length of time it is to continue in force. Such instrument shall be
exhibited to the Secretary of the Corporation at the meeting and shall be filed
with the records of the Corporation. Except as otherwise provided by statute,
each holder of record of shares of capital stock entitled to vote at any meeting
of stockholders shall be entitled to one vote for every share of capital stock
standing in his name on the books of the Corporation. All elections shall be
determined by a plurality vote. The vote for directors shall be by ballot and,
except as otherwise provided by statute or by these By-Laws, all other matters
shall be determined by a vote of the holders of a plurality of the shares of the
capital stock present or represented at a meeting and entitled to vote on such
matters, and by ballot, if demanded by any stockholder or his duly authorized
proxy.
7. A list of stockholders, certified by the corporate officer
responsible for its preparation, shall be prepared at least ten (10) days before
every meeting of stockholders and shall be produced at any meeting of
stockholders upon the request thereat or prior thereto of any stockholder. If
the right to vote at any meeting is challenged, the inspectors of election, or
person presiding thereat, shall require such list of stockholders to be produced
as evidence of the right of the persons challenged to vote at such meeting, and
all persons who appear from such list to be stockholders entitled to vote
thereat may vote at such meeting.
8. Special meetings of the stockholders may be called by the
President of the Corporation, and shall be called by the President or Secretary
of the Corporation at the request in writing of a majority of the Board of
Directors, or at the request in writing of stockholders holding a majority of
the shares of stock of the Corporation issued and outstanding and entitled to
vote or as otherwise provided by statute. Such request shall state the purpose
or purposes of the proposed meetings.
9. Except as otherwise provided by statute, written notice of each
meeting of stockholders, whether annual or special, stating the time when and
place where it is to be held, shall be served either personally or by mail, not
less than ten or more than sixty days before the meeting, upon each stockholder
of record entitled to vote at such meeting, and to any other stockholder to whom
the giving of notice may be required by law. Notice of a special meeting shall
also state the purpose or purposes for which the meeting is called, and shall
indicate that it is being issued by, or at the direction of, the person or
persons calling the meeting. If, at any meeting, action is proposed to be taken
that would, if taken, entitle stockholders to receive payment for their shares
pursuant to statute, the notice of such meeting shall include a statement of
that purpose and to that effect. If mailed, such notice shall be directed to
each such stockholder at his address, as it appears on the records of the
Corporation, unless he shall have previously filed with the Secretary of the
Corporation a written request that notices intended for him be mailed to some
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other address, in which case, it shall be mailed to the address designated in
such request.
Notice of any meeting need not be given to any person who may become a
stockholder of record after the mailing of such notice and prior to the meeting,
or to any stockholder who attends such meeting, in person or by proxy, or to any
stockholder who, in person or by proxy, submits a signed waiver of notice either
before or after such meeting. Notice of any adjourned meeting of stockholders
need not be given, unless otherwise required by statute.
If any By-Law regulating an impending election of directors is adopted
or amended or repealed by the Board, there shall be set forth in the notice of
the next meeting of the stockholders of the Corporation for the election of
directors the By-Law so adopted or amended or repealed together with a concise
statement of the changes made.
DIRECTORS
10. The property and business of the Corporation shall be managed
under the direction of its Board of Directors. The number of directors of the
Corporation shall be determined by vote of a majority of the entire Board of
Directors, but shall not be less than the number required by statute. Directors
need not be stockholders. The directors shall be elected at the annual meeting
of the stockholders, or, if no such election shall be held, at a meeting called
and held in accordance with the statutes of the State of Delaware. Each director
shall be elected to serve until the next annual meeting of stockholders and
thereafter until his successor shall be elected and shall qualify. The
stockholders, at any annual meeting, or at any special meeting called for that
purpose, or a majority of the entire Board of Directors, at any regular or
special meeting, may determine to increase or decrease the number of directors
to the respective maximum or minimum limits above prescribed, and, in the case
of an increase, shall thereupon elect the additional directors. No decrease in
the number of directors shall shorten the term of any incumbent director. At any
meeting of the stockholders, the holders of a majority of the shares of stock
issued and outstanding, or by written consent without a meeting may remove at
any time, with or without cause, any director and may fill the vacancy in the
Board for the unexpired term thus caused.
11. In addition to the powers and authorities by these By-Laws
expressly conferred upon them, the Board may exercise all such powers of the
Corporation, and do all such lawful acts and things as are not by statute or by
the Certificate of Incorporation or by these By-Laws directed or required to be
exercised or done by the stockholders. No director or officer of this
Corporation shall be disqualified by his office from dealing or contracting with
the Corporation either as a vendor, purchaser or otherwise, nor shall any
contract or other transaction between this Corporation and any other corporation
be impaired, affected or invalidated, nor shall any director or officer be
liable in any way by reason of the fact that any one or more of the directors or
officers of this Corporation is or are interested in, or is a director or
officer, or are directors or officers of such other corporation, provided that
such facts are disclosed or made known to the Board of Directors.
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Any director or officer, personally and individually, may be a party
to or may be interested in any contract or other transaction of this
Corporation, and no such director or officer shall be liable in any way by
reason of such interest, provided that the fact of such interest is disclosed or
made known to the Board of Directors, and provided that the Board of Directors
shall authorize, approve or ratify such contract or other transaction by the
vote (not counting the vote of any such director) of a majority of a quorum,
notwithstanding the presence of any such director at the meeting at which such
action is taken. Such director or directors may be counted in determining the
presence of a quorum at such meeting. This Section shall not be construed to
impair or invalidate or in any way affect any contract or other transaction
which would otherwise be valid under the law (common, statutory or otherwise)
applicable thereto.
MEETINGS OF THE BOARD
12. The first meeting of the Board of Directors shall be held for the
purpose of organization, the election of officers and the transaction of any
other business which may come before the meeting.
13. Regular meetings of the Board may be held without notice, except
as otherwise provided by these By-Laws, at such time and place as shall from
time to time be designated by the Board; provided, however, that in case the
Board of Directors shall fix or change the time or place of any regular meeting,
notice of such action shall be given to each director who shall not have been
present at the meeting at which such action was taken within the time limited,
and in the manner set forth in Section 14 hereof with respect to special
meetings, unless such notice shall have been waived.
14. Special meetings of the Board may be called by the President or a
Vice President of the Corporation or any two directors and may be held at the
time and place designated in the call and notice of the meeting. The Secretary
of the Corporation, or other officer performing the Secretary's duties, shall
give notice either personally or by mail or telegram at least twenty-four hours
before the meeting. Meetings may be held at any time and place without notice if
all the directors are present or if those not present waive notice in writing
either before or after the meeting.
15. At all meetings of the Board, one-third of the total number of
directors shall be requisite for and shall constitute a quorum for the
transaction of business, and the act of a majority of the directors present at
any meeting at which there is a quorum shall be the act of the Board of
Directors, except as may be otherwise specifically provided by statute or by
these By-Laws.
16. Any regular or special meeting may be adjourned to any other time
at the same or any other place by a majority of the directors present at the
meeting, whether or not a quorum shall be present at such meeting, and no notice
of the adjourned meeting shall be required other than announcement at the
meeting.
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COMPENSATION OF DIRECTORS
17. Directors, other than salaried officers or employees of the
Corporation or of any affiliated company, shall receive compensation for their
services as directors in such amounts and at such times as may be prescribed
from time to time by the Board of Directors. All directors shall be reimbursed
for their reasonable expenses for attendance, if any, at each regular or special
meeting of the Board of Directors. Nothing herein contained shall be construed
to preclude any director from serving the Corporation in any other capacity and
receiving compensation therefor.
18. Members of the Executive Committee, other than salaried officers
or employees of the Corporation or of any affiliated company, shall receive
compensation for their services on that committee in such amounts and at such
times as may be prescribed from time to time by the Board of Directors.
Members of special or standing committees, including the Executive
Committee, shall be allowed such additional compensation and reimbursement for
expenses as may be fixed by the Board of Directors.
EXECUTIVE COMMITTEE
19. The Board of Directors may by vote of a majority of the whole
Board designate three or more of their number to constitute an Executive
Committee to hold office for such period as the Board shall determine. The Board
of Directors may likewise designate one or more alternate members who shall
serve on the Executive Committee in the absence of any regular member or members
of such committee. When a regular or alternate member of the Executive Committee
ceases to be a director he shall automatically cease to be such regular or
alternate member of the Executive Committee. Such Executive Committee shall,
between meetings of the Board, have all the powers of the Board of Directors in
the management of the business and affairs of the Corporation, except that no
such committee shall have authority as to: the submission to stockholders of any
action that needs stockholders' authorization under the General Corporation Law;
the filling of vacancies in the Board of Directors or in any committee; the
fixing of compensation of the directors for serving on the Board or on any
committee; the amendment or repeal of the By-Laws or the adoption of new
By-Laws; or the amendment or repeal of any resolution of the Board which by its
terms shall not be so amendable or repealable.
The Executive Committee shall cause to be kept regular minutes of its
proceedings, which may be transcribed in the regular minute book of the
Corporation, and all such proceedings shall be reported to the Board of
Directors at its next succeeding meeting, and shall be subject to revision or
alteration by the Board, provided that no rights of third persons shall be
affected by such revision or alteration. A majority of the Executive Committee
shall constitute a quorum at any meeting. The act of a majority of the Executive
Committee present at any meeting at which there is a quorum shall be the act of
the Executive Committee. The Board of Directors may by vote of a majority
thereof fill any vacancies in the Executive Committee. The Executive Committee
may, from time to time, subject to the approval of the Board of Directors,
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prescribe rules and regulations for the calling and conduct of meetings of the
Committee, and other matters relating to its procedure and the exercise of its
powers.
20. In addition to having the power to designate an Executive
Committee, the Board of Directors may by vote of a majority of the whole Board
designate other committees, whether special or standing, each to consist of
three or more of their number, to hold office for such period as the Board shall
determine. With respect to each such other committee, the Board of Directors may
likewise designate one or more alternate members who shall serve in the absence
of any regular member or members of such other committee. When a regular or
alternate member of such other committee ceases to be a director he shall
automatically cease to be a regular or alternate member of such other committee.
Each such other committee shall have authority only to the extent provided by
the Board of Directors, except that no such other committee shall have authority
as to: the submission to stockholders of any action that needs stockholders'
authorization under the General Corporation Law; the filling of vacancies in the
Board of Directors or in any committee; the fixing of compensation of the
directors for serving on the Board or on any committee; the amendment or repeal
of any resolution of the Board which by its terms shall not be so amendable or
repealable. A majority of each such other committee shall constitute a quorum at
any meeting thereof. The act of a majority of each such other committee present
at any meeting thereof at which there is a quorum shall be the act of such other
committee. The Board of Directors may by vote of a majority thereof fill any
vacancies in each such other committee.
MEETINGS OF THE BOARD AND COMMITTEES THEREOF
BY CONFERENCE TELEPHONE OR SIMILAR MEANS
21. Any one or more of the members of the Board of Directors, the
Executive Committee or any special or standing committee of the Board of
Directors may participate in a meeting of the Board or such committee by means
of a conference telephone or similar communications equipment allowing all
persons participating in the meeting to hear each other at the same time.
Participation by such means shall constitute presence in person at a meeting.
ACTION BY BOARD OR COMMITTEE WITHOUT A MEETING
22. If all members of the Board of Directors, the Executive Committee
or any special or standing committee of the Board of Directors consent in
writing to the adoption of a resolution authorizing action required or permitted
to be taken by the Board or any committee, such action may be taken without a
meeting. The resolution and the written consents thereto shall be filed with the
minutes of the proceedings.
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OFFICERS
23. The officers of the Corporation shall be chosen by the Board of
Directors. The officers shall be a President, one or more Assistants to the
President, one or more Vice Presidents, one or more Assistant Vice Presidents, a
Secretary, one or more Assistant Secretaries, a Treasurer, one or more Assistant
Treasurers, a Controller, one or more Assistant Controllers, and such other
officers as the Board may from time to time choose and appoint. Any two of such
offices may be occupied by the same person but no officer shall execute,
acknowledge or verify any instrument in more than one capacity.
24. The Board of Directors, at its first meeting after the election
of directors by the stockholders, shall choose a President, a Secretary, a
Treasurer and a Controller, and such Assistants to the President, Vice
Presidents, Assistant Vice Presidents, Assistant Secretaries, Assistant
Treasurers, and Assistant Controllers, as it shall deem necessary, none of whom
need be members of the Board.
25. The Board may appoint such other officers and agents as it shall
deem necessary, who shall hold their offices for such terms, and shall exercise
such powers and perform such duties as shall be determined from time to time by
the Board.
26. The salary or other compensation of the officers of the
Corporation shall be fixed by the Board of Directors. The salary or other
compensation of all other employees shall, in the absence of any action by the
Board, be fixed by the President of the Corporation or by such other officers or
executives as shall be designated by the President of the Corporation.
27. The officers of the Corporation shall hold office until the first
meeting of the Board of Directors after the next succeeding annual meeting of
stockholders and until their successors are chosen and qualify in their stead.
Any officer or agent of the Corporation elected or appointed by the Board of
Directors may be removed at any time, with or without cause, by the affirmative
vote of a majority of the whole Board of Directors. Any other employee or agent
of the Corporation may be removed at any time, with or without cause, by the
affirmative vote of a majority of the whole Board of Directors or, in the
absence of any action by the Board, by the President or by such other officers
or executives as shall have been designated by the President.
PRESIDENT
28. The President of the Corporation shall be the chief executive
officer of the Corporation and shall, when present, preside at all meetings of
the stockholders, except as otherwise provided by statute. He may sign, in the
name of and on behalf of the Corporation, certificates of stock, notes, and any
and all contracts, agreements and other instruments of a contractual nature
pertaining to matters which arise in the normal conduct and ordinary course of
business of the Corporation. He shall be a member of all standing committees. He
shall also generally have the powers and perform the duties which appertain to
the office.
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VICE PRESIDENT
29. A Vice President of the Corporation may sign, in the name of and
on behalf of the Corporation, certificates of stock, notes and any and all
contracts, agreements and other instruments of a contractual nature pertaining
to matters which arise in the normal conduct and ordinary course of business,
and shall perform such other duties as the Board of Directors may prescribe.
If there be more than one Vice President, the Board of Directors may
designate one or more Vice Presidents as Executive Vice Presidents who shall
have general supervision, direction and control of the business and affairs of
the Corporation in the absence or disability of the President, and may designate
one or more Vice Presidents as Senior Vice Presidents who shall have general
supervision, direction and control of the business and affairs of the
Corporation in the absence or disability of the President and the Executive Vice
Presidents. A Vice President who has not been designated as Executive Vice
President or as Senior Vice President shall have general supervision, direction
and control of the business and affairs of the Corporation in the absence or
disability of the President, the Executive Vice Presidents and the Senior Vice
Presidents.
The Assistant Vice Presidents shall assist the President and Vice
Presidents in the performance of their duties and exercise and perform such
other powers and duties as may be conferred or required by the Board.
SECRETARY
30. The Secretary of the Corporation shall attend all sessions of the
Board and all meetings of the stockholders and record all votes and the minutes
of all proceedings in a book to be kept for that purpose; and shall perform like
duties for the standing committees when required. He shall give, or cause to be
given, notice of all meetings of the stockholders and of the Board of Directors,
and shall perform such other duties as may be prescribed by the Board of
Directors. He shall be sworn to the faithful discharge of his duty. Any records
kept by him shall be the property of the Corporation and shall be restored to
the Corporation in case of his death, resignation, retirement or removal from
office.
He shall be the custodian of the seal of the Corporation and, when
authorized by the Board of Directors or by the President or a Vice President,
shall affix the seal to all instruments requiring it and shall attest the seal
and/or the execution of such instruments, as required. He shall have control of
the stock ledger, stock certificate book and minute books of the Corporation and
its committees, and other formal records and documents relating to the corporate
affairs of the Corporation.
The Assistant Secretary or Assistant Secretaries shall assist the
Secretary in the performance of his duties, exercise and perform his powers and
duties in his absence or disability, and such powers and duties as may be
conferred or required by the Board.
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TREASURER
31. The Treasurer of the Corporation shall have the custody of the
corporate funds and securities and shall keep full and accurate accounts of
receipts and disbursements in books belonging to the Corporation and shall
deposit all moneys, and other valuable effects in the name and to the credit of
the Corporation, in such depositories as may be designated by the Board of
Directors.
He shall disburse the funds of the Corporation in such manner as may
be ordered by the Board, taking proper vouchers for such disbursements, and
shall render to the President and directors, at the regular meetings of the
Board, or whenever they may require it, an account of all his transactions as
Treasurer and of the financial condition of the Corporation.
He shall give the Corporation a bond if required by the Board of
Directors in a sum, and with one or more sureties satisfactory to the Board, for
the faithful performance of the duties of his office, and for the restoration to
the Corporation, in case of his death, resignation, retirement or removal from
office, of all books, papers, vouchers, money and other property of whatever
kind in his possession or under his control belonging to the Corporation.
The Assistant Treasurer or Assistant Treasurers shall assist the
Treasurer in the performance of his duties, exercise and perform his powers and
duties in his absence or disability, and such powers and duties as may be
conferred or required by the Board.
CONTROLLER
32. The Controller of the Corporation shall have full control of all
the books of account of the Corporation and keep a true and accurate record of
all property owned by it, of its debts and of its revenues and expenses and
shall keep all accounting records of the Corporation other than the record of
receipts and disbursements and those relating to the deposit or custody of money
and securities of the Corporation, which shall be kept by the Treasurer and
shall also make reports to the directors and others of or relating to the
financial condition of the Corporation.
The Assistant Controller or Assistant Controllers shall assist the
Controller in the performance of his duties, exercise and perform his powers and
duties in his absence or disability, and such powers and duties as may be
conferred or required by the Board.
VACANCIES
33. If the office of any director becomes vacant by reason of death,
resignation, removal or disability, or any other cause, the directors then in
office, although less than a quorum, by a majority vote may choose a successor
or successors, who shall hold office for the unexpired term in respect of which
such vacancy occurs. If the office of any officer of the Corporation shall
become vacant for any reason, the Board, by a majority vote of those present at
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any meeting at which a quorum is present, may choose a successor or successors
who shall hold office for the unexpired term in respect of which such vacancy
occurred.
RESIGNATIONS
34. Any director or officer of the Corporation may resign at any
time, such resignation to be made in writing and to take effect from the time of
its receipt by the Corporation, unless some time is fixed in the resignation,
and then from that time.
DUTIES OF OFFICERS MAY BE DELEGATED
35. In case of the absence of any officer of the Corporation, or for
any other reason the Board may deem sufficient, the Board may delegate, for the
time being, the powers or duties, or any of them, of such officer to any other
officer or to any director, provided a majority of the entire Board concur
therein.
INDEMNIFICATION OF DIRECTORS,
OFFICERS AND EMPLOYEES
36. The Corporation shall fully indemnify to the extent not
prohibited by law any person made, or threatened to be made, a party to an
action or proceeding, whether civil or criminal, including an investigative,
administrative, legislative or other proceeding, and including an action by or
in the right of the Corporation or any other corporation of any type or kind,
domestic or foreign, or any partnership, joint venture, trust, employee benefit
plan or other enterprise, by reason of the fact that he, his testator or
intestate, (i) is or was a director, officer, or employee of the Corporation or
(ii) is or was serving at the request of the Corporation, as a director,
officer, or in any other capacity, any other corporation of any type or kind,
domestic or foreign, or any partnership, joint venture, trust, employee benefit
plan or other enterprise, against any and all judgments, fines, amounts paid in
settlement and expenses, including attorneys' fees, actually and reasonably
incurred as a result of or in connection with any such action or proceeding or
any appeal therein, except as provided in the next paragraph.
No indemnification shall be made to or on behalf of any director,
officer, or employee if a judgment or other final adjudication adverse to the
director, officer, or employee establishes that his acts were committed in bad
faith or were the result of active and deliberate dishonesty and were material
to the cause of action so adjudicated, or that he personally gained in fact a
financial profit or other advantage to which he was not legally entitled.
Except in the case of an action or proceeding against a director,
officer, or employee specifically approved by the Board of Directors, the
Corporation shall pay expenses incurred by or on behalf of such a person in
defending such a civil or criminal action or proceeding (including appeals) in
advance of the final disposition of such action or proceeding. Such payments
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shall be made promptly upon receipt by the Corporation, from time to time, of a
written demand of such person for such advancement, together with an undertaking
by or on behalf of such person to repay any expenses so advanced to the extent
that the person receiving the advancement is ultimately found not to be entitled
to indemnification for such expenses.
The rights to indemnification and advancement of defense expenses
granted by or pursuant to this By-Law (i) shall not limit or exclude, but shall
be in addition to, any other rights which may be granted by or pursuant to any
statute, certificate of incorporation, by-law, resolution or agreement, (ii)
shall be deemed to constitute contractual obligations of the Corporation to any
director, officer, or employee who serves in such capacity at any time while
this By-law is in effect, (iii) are intended to be retroactive and shall be
available with respect to events occurring prior to the adoption of this By-Law
and (iv) shall continue to exist after the repeal or modification hereof with
respect to events occurring prior thereto. It is the intent of this By-Law to
require the Corporation to indemnify the persons referred to herein for the
aforementioned judgments, fines, amounts paid in settlement and expenses,
including attorneys' fees, in each and every circumstance in which such
indemnification could lawfully be permitted by an express provision of a by-law,
and the indemnification required by this By-Law shall not be limited by the
absence of an express recital of such circumstances.
The Corporation may, with the approval of the Board of Directors,
enter into an agreement with any person who is, or is about to become, a
director, officer, or employee of the Corporation, or who is serving, or is
about to serve, at the request of the Corporation, as a director, officer, or in
any other capacity, any other corporation of any type or kind, domestic or
foreign, or any partnership, joint venture, trust, employee benefit plan or
other enterprise, which agreement may provide for indemnification of such person
and advancement of defense expenses to such person upon such terms, and to the
extent, not prohibited by law.
STOCK OF OTHER CORPORATIONS
37. The Board of Directors shall have the right to authorize any
officer or other person on behalf of the Corporation to attend, act and vote at
meetings of the stockholders of any corporation in which the Corporation shall
hold stock, and to exercise thereat any and all the rights and powers incident
to the ownership of such stock and to execute waivers of notice of such meetings
and calls therefor; and authority may be given to exercise the same either on
one or more designated occasions, or generally on all occasions until revoked by
the Board. In the event that the Board shall fail to give such authority, such
authority may be exercised by the President in person or by proxy appointed by
him on behalf of the Corporation.
CERTIFICATES OF STOCK
38. The certificates of stock of the Corporation shall be numbered
and shall be entered in the books of the Corporation as they are issued. They
shall exhibit the holder's name and number of shares and shall be signed by the
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President or Vice President and by the Treasurer or an Assistant Treasurer or
the Secretary or an Assistant Secretary, and the seal of the Corporation shall
be affixed thereto.
No certificate representing shares shall be issued until the full
amount of consideration therefor has been paid, except as otherwise permitted by
statute.
To the extent permitted by statute, the Board of Directors may
authorize the issuance of certificates for fractions of a share which shall
entitle the holder to exercise voting rights, receive dividends and participate
in liquidation distributions, in proportion to the fractional holdings; or it
may authorize the payment in cash of the fair value of fractions of a share as
of the time when those entitled to receive such fractions are determined; or it
may authorize the issuance, subject to such conditions as may be permitted by
statute, of scrip in registered or bearer form over the signature of an officer
or agent of the Corporation, exchangeable as therein provided for full shares,
but such scrip shall not entitle the holder to any rights of a stockholder,
except as therein provided.
TRANSFERS OF STOCK
39. Transfers of shares of the Corporation shall be made on the
stockholder records of the Corporation only by the holder of record thereof, in
person or by his duly authorized attorney, upon surrender for cancellation of
the certificate or certificates representing such shares, with an assignment or
power of transfer endorsed thereon or delivered therewith, duly executed, with
such proof of the authenticity of the signature and of authority to transfer and
of payment of transfer taxes as the Corporation or its agents may require.
FIXING OF RECORD DATE
40. The Board of Directors is hereby authorized to fix a day and hour
not exceeding sixty (60) days (and in the case of a meeting not less than ten
(10) days) preceding the date of any meeting of stockholders or the date fixed
for the payment of any dividend or for the delivery of evidences of rights, as a
record time for the determination of the stockholders entitled to notice of and
to vote at any such meeting or entitled to receive any such dividend or rights,
as the case may be; and all persons who are holders of record of voting stock at
such time, and no others, shall be entitled to notice of and to vote at such
meeting, and only stockholders of record at any time so fixed shall be entitled
to receive any such dividend or rights; and the stock transfer books shall not
be closed during any such period.
REGISTERED STOCKHOLDERS
41. The Corporation shall be entitled to treat the holder of record
of any share or shares of stock as the holder in fact thereof and accordingly
shall not be bound to recognize any equitable or other claim to, or interest in,
such share on the part of any other person, whether or not it shall have express
or other notice thereof, save as expressly provided by the statutes of the State
of Delaware.
A-2-12
<PAGE>
LOST CERTIFICATES
42. The holder of any certificate representing shares of stock of the
Corporation shall immediately notify the Corporation of any loss or destruction
of the certificate representing the same. The Corporation may issue a new
certificate in place of any certificate theretofore issued by it, alleged to
have been lost or destroyed. On production of such evidence of loss or
destruction as the Board of Directors in its discretion may require, the Board
of Directors may, in its discretion, require the owner of the lost or destroyed
certificate, or his legal representatives, to give the Corporation a bond in
such sum as the Board may direct, and with such surety or sureties as may be
satisfactory to the Board, to indemnify the Corporation against any claims,
loss, liability or damage it may suffer on account of the issuance of the new
certificate. A new certificate may be issued without requiring any such evidence
or bond when, in the judgment of the Board of Directors, it is proper so to do.
CHECKS, NOTES, BONDS AND OTHER INSTRUMENTS
43. All checks or demands for money and notes of the Corporation
shall be signed by such person or persons (who may but need not be an officer or
officers of the Corporation) as may be authorized by these By-Laws or as the
Board of Directors may from time to time designate, either directly or through
such officers of the Corporation as shall, by resolution of the Board of
Directors, be authorized to designate such person or persons. If authorized by
the Board of Directors, the signatures of such persons, or any of them, upon any
checks for the payment of money may be made by engraving, lithographing or
printing thereon a facsimile of such signatures, in lieu of actual signatures,
and such facsimile signatures so engraved, lithographed or printed thereon shall
have the same force and effect as if such persons had actually signed the same.
All bonds, mortgages and other instruments requiring a seal shall be
executed on behalf of the Corporation by the President or a Vice President, and
the seal of the Corporation shall be thereunto affixed by the Secretary or an
Assistant Secretary who shall, when required, attest the seal and/or the
execution of said instruments. If authorized by the Board of Directors, the
signatures of the President or a Vice President and the Secretary or an
Assistant Secretary or the Treasurer or an Assistant Treasurer upon any
engraved, lithographed or printed bonds, debentures, notes or other instruments
may be made by engraving, lithographing or printing thereon a facsimile of such
signatures, in lieu of actual signatures, and such facsimile signatures so
engraved, lithographed or printed thereon shall have the same force and effect
as if such officers had actually signed the same.
In case any officer who has signed any such bonds, debentures, notes
or other instruments shall cease to be such officer before such bonds,
debentures, notes or other instruments shall have been delivered by the
Corporation, such bonds, debentures, notes or other instruments may nevertheless
A-2-13
<PAGE>
be adopted by the Corporation and be issued and delivered as though the person
who has signed the same had not ceased to be such officer of the Corporation.
RECEIPTS FOR SECURITIES
44. All receipts for stocks, bonds or other securities received by
the Corporation shall be signed by the Treasurer or an Assistant Treasurer or by
such other person or persons as the Board of Directors or Executive Committee
shall designate.
FISCAL YEAR
45. The fiscal year of the Corporation shall begin the first day of
January in each year.
DIVIDENDS
46. Dividends may be declared at such times and in such amounts as
the Board of Directors may in their absolute discretion determine, except as
otherwise provided by statute.
NOTICES
47. Whenever under the provisions of these By-Laws notice is required
to be given to any director, officer or stockholder, it shall not be construed
to require personal notice, but such notice may be given in writing, by mail, by
depositing a copy of the same in a post office, letter box or mail chute,
maintained by the United States Postal Service, in a postpaid sealed wrapper,
addressed to such director, officer or stockholder, at his address as the same
appears on the books of the Corporation.
A director, officer or stockholder may waive in writing any notice
required to be given to him under these By-Laws.
AMENDMENTS
48. These By-Laws may be altered or amended by the affirmative vote
of stockholders holding of record a majority of the stock issued and outstanding
and entitled to vote, or by the affirmative vote of a majority of the Board of
Directors at any meeting duly held as above provided, the notice of which
includes notice of the proposed amendment; provided, however, that such
stockholders entitled to vote with respect thereto as above-provided may alter,
amend or repeal By-Laws made by the Board of Directors, and further provided,
A-2-14
<PAGE>
that the Board of Directors shall have no power to change the quorum for
meetings of stockholders or of the Board of Directors, or to change any
provisions of the By-Laws with respect to the removal of directors or the
filling of vacancies in the Board resulting from the removal by the
stockholders.
A-2-15
EXHIBIT B-1
-----------
FORM OF SERVICE AGREEMENT BETWEEN ENERGY EAST MANAGEMENT AND
UTILITY SUBSIDIARY
SERVICE AGREEMENT
This Service Agreement is made and entered into this _____ day of
___________, by and between __________________ ("Client Company") and Energy
East Management Corporation ("Service Company").
WITNESSETH
WHEREAS, the Securities and Exchange Commission ("SEC") has approved
and authorized as meeting the requirements of Section 13(b) of the Public
Utility Holding Company Act of 1935 ("Act") the organization and conduct of the
business of Service Company, in accordance herewith, as a wholly-owned
subsidiary service company of Energy East Corporation ("Energy East"); and
WHEREAS, Client Company is a utility operating company subsidiary of
Energy East and an associate of Service Company; and
WHEREAS, Service Company and Client Company have entered into this
Service Agreement whereby Service Company agrees to provide and Client Company
agrees to accept and pay for various services as provided herein at cost, with
cost determined in accordance with applicable rules and regulations under the
Act, which require Service Company to fairly and equitably allocate costs among
all associate companies to which it renders services (collectively, the "Client
Companies"), including Client Company.
NOW THEREFORE, in consideration of the premises and the mutual
agreements herein contained, the parties to this Service Agreement covenant and
agree as follows:
ARTICLE I - SERVICES
Section 1.1 Service Company shall furnish to Client Company, as
requested by Client Company, upon the terms and conditions hereinafter set
forth, such of the services described in Appendix A hereto, at such times, for
such periods and in such manner as Client Company may from time to time request
and that Service Company concludes it is able to perform. Service Company shall
also provide Client Company with such special services, in addition to those
B-1-1
<PAGE>
services described in Appendix A hereto, as may be requested by Client Company
and that Service Company concludes it is able to perform. In supplying such
services, Service Company may arrange, where it deems appropriate, for the
services of such experts, consultants, advisers, and other persons with
necessary qualifications as are required for or pertinent to the provision of
such services.
Section 1.2 Client Company shall take from Service Company such of the
services described in Appendix A, and such additional general or special
services, whether or not now contemplated, as are requested from time to time by
Client Company and that Service Company concludes it is able to perform.
Section 1.3 The cost of the services described herein or contemplated
to be performed hereunder shall be directly assigned, distributed or allocated
by activity, project, program, work order or other appropriate basis. Client
Company shall have the right from time to time to amend or alter any activity,
project, program or work order provided that (i) any such amendment or
alteration that results in a material change in the scope of the services to be
performed or equipment to be provided is agreed to by Service Company, (ii) the
cost for the services covered by the activity, project, program or work order
shall include any expense incurred by Service Company as a direct result of such
amendment or alteration of the activity, project, program or work order, and
(iii) no amendment or alteration of an activity, project, program or work order
shall release Client Company from liability for all costs already incurred by or
contracted for by Service Company pursuant to the activity, project, program or
work order, regardless of whether the services associated with such costs have
been completed.
Section 1.4 Service Company shall use its best efforts to maintain a
staff trained and experienced in the services described in Appendix A.
ARTICLE II - COMPENSATION
Section 2.1 As compensation for the services to be rendered hereunder,
Client Company shall pay to Service Company all costs that reasonably can be
identified and related to particular services performed by Service Company for
or on its behalf. The methods for assigning or allocating Service Company costs
to Client Company, as well as to other associate companies, are set forth in
Appendix A.
Section 2.2 It is the intent of this Service Agreement that charges
for services shall be distributed among Client Companies, to the extent
possible, based upon direct assignment. The amounts remaining after direct
assignment shall be allocated among the Client Companies using the methods
identified in Appendix A. The method of assignment or allocation of cost shall
be subject to review by the Service Company annually, or more frequently if
appropriate. Such method of assignment or allocation of costs may be modified or
changed by the Service Company without the necessity of an amendment to this
Service Agreement; provided that, in each instance, all services rendered
hereunder shall be at actual cost thereof, fairly and equitably assigned or
allocated, all in accordance with the requirements of the Act and any orders
promulgated thereunder. The Service Company shall review with the Client Company
B-1-2
<PAGE>
any proposed material change in the method of assignment or allocation of costs
hereunder and the parties must agree to any such changes before they are
implemented. In addition, no such agreed upon material change shall be made
unless and until the Service Company shall have first given written notice to
the SEC not less than 60 days prior to the proposed effective date thereof.
Section 2.3 Service Company shall render a monthly report to Client
Company that shall reflect the information necessary to identify the costs
charged for that month. Client Company shall remit to Service Company all
charges billed to it within 30 days of receipt of the monthly report.
Section 2.4 It is the intent of this Service Agreement that the
payment for services rendered by Service Company to Client Company under this
Service Agreement shall cover all the costs of its doing business including, but
not limited to, salaries and wages, office supplies and expenses, outside
services employed, property insurance, injuries and damages, employee pensions
and benefits, miscellaneous general expenses, rents, maintenance of structures
and equipment, depreciation and amortization, and compensation for use of
capital as permitted by Rule 91 of the SEC's regulations under the Act.
ARTICLE III- TERM
This Service Agreement shall become effective as of the date first
written above, subject only to the receipt of any required regulatory approvals
from any State regulatory commission with jurisdiction over Client Company and
the SEC, and shall continue in force until terminated by Service Company or
Client Company, upon not less than 90 days prior written notice to the other
party. This Service Agreement shall also be subject to termination or
modification at any time, without notice, if and to the extent performance under
this Service Agreement may conflict with the Act or with any rule, regulation or
order of the SEC or any State regulatory commission with jurisdiction over
Client Company adopted before or after the date of this Service Agreement.
ARTICLE IV - MISCELLANEOUS
Section 4.1 All accounts and records of Service Company shall be kept
in accordance with the General Rules and Regulations promulgated by the SEC
pursuant to the Act, in particular, the Uniform System of Accounts for Mutual
Service Companies and Subsidiary Service Companies in effect from and after the
date hereof.
Section 4.2 New direct or indirect subsidiaries of Energy East, which
may come into existence after the effective date of this Service Agreement, may
become additional client companies of Service Company and subject to a service
agreement with Service Company. The parties hereto shall make such changes in
the scope and character of the services to be rendered and the method of
assigning, distributing or allocating costs of such services as specified in
Appendix A, subject to the requirements of Section 2.2, as may become necessary
B-1-3
<PAGE>
to achieve a fair and equitable assignment, distribution, or allocation of
Service Company costs among all associate companies including the new
subsidiaries.
Section 4.3 Service Company shall permit Client Company access to its
accounts and records including the basis and computation of allocations.
IN WITNESS WHEREOF, the parties hereto have caused this Service
Agreement to be executed as of the date and year first above written.
ENERGY EAST MANAGEMENT
CORPORATION
BY:
------------------------------------
Name:
Title:
CLIENT COMPANY
BY:
------------------------------------
Name:
Title:
The undersigned requests all services listed in Appendix A from Energy East
Management Corporation except for __________________________________. Services
will begin _________________________.
CLIENT COMPANY
BY:
------------------------------------
Name:
Title:
B-1-4
<PAGE>
Appendix A
DESCRIPTION OF SERVICES TO BE PROVIDED BY SERVICE
COMPANY AND DETERMINATION OF CHARGES FOR SUCH
SERVICES TO THE CLIENT COMPANIES
SEE BODY OF APPLICATION.
FORMS BEING DEVELOPED.
B-1-5
Exhibit B-2
-----------
FORM OF SERVICE AGREEMENT BETWEEN
ENERGY EAST MANAGEMENT AND NON-UTILITY SUBSIDIARY
SERVICE AGREEMENT
This Service Agreement is made and entered into this _____ day of
___________, by and between __________________ ("Client Company") and Energy
East Management Corporation ("Service Company").
WITNESSETH
WHEREAS, the Securities and Exchange Commission ("SEC") has approved
and authorized as meeting the requirements of Section 13(b) of the Public
Utility Holding Company Act of 1935 ("Act") the organization and conduct of the
business of Service Company, in accordance herewith, as a wholly-owned
subsidiary service company of Energy East Corporation ("Energy East"); and
[WHEREAS, Client Company is a non-utility company subsidiary of Energy
East and an associate of Service Company;] [remove if client is Energy East] and
WHEREAS, Service Company and Client Company have entered into this
Service Agreement whereby Service Company agrees to provide and Client Company
agrees to accept and pay for various services as provided herein at cost, with
cost determined in accordance with applicable rules and regulations under the
Act, which require Service Company to fairly and equitably allocate costs among
all associate companies to which it renders services (collectively, the "Client
Companies"), including Client Company.
NOW THEREFORE, in consideration of the premises and the mutual
agreements herein contained, the parties to this Service Agreement covenant and
agree as follows:
ARTICLE I - SERVICES
Section 1.1 Service Company shall furnish to Client Company, as
requested by Client Company, upon the terms and conditions hereinafter set
forth, such of the services described in Appendix A hereto, at such times, for
such periods and in such manner as Client Company may from time to time request
and that Service Company concludes it is able to perform. Service Company shall
also provide Client Company with such special services, in addition to those
services described in Appendix A hereto, as may be requested by Client Company
and that Service Company concludes it is able to perform. In supplying such
B-2-1
<PAGE>
services, Service Company may arrange, where it deems appropriate, for the
services of such experts, consultants, advisers, and other persons with
necessary qualifications as are required for or pertinent to the provision of
such services.
Section 1.2 Client Company shall take from Service Company such of the
services described in Section 1.1, and such additional general or special
services, whether or not now contemplated, as are requested from time to time by
Client Company and that Service Company concludes it is able to perform.
Section 1.3 The cost of the services described herein or contemplated
to be performed hereunder shall be directly assigned, distributed or allocated
by activity, project, program, work order or other appropriate basis. Client
Company shall have the right from time to time to amend or alter any activity,
project, program or work order provided that (i) any such amendment or
alteration that results in a material change in the scope of the services to be
performed or equipment to be provided is agreed to by Service Company, (ii) the
cost for the services covered by the activity, project, program or work order
shall include any expense incurred by Service Company as a direct result of such
amendment or alteration of the activity, project, program or work order, and
(iii) no amendment or alteration of an activity, project, program or work order
shall release Client Company from liability for all costs already incurred by or
contracted for by Service Company pursuant to the activity, project, program or
work order, regardless of whether the services associated with such costs have
been completed.
Section 1.4 Service Company shall use its best efforts to maintain a
staff trained and experienced in the services described in Appendix A.
ARTICLE II - COMPENSATION
Section 2.1 As compensation for the services to be rendered hereunder,
Client Company shall pay to Service Company all costs that reasonably can be
identified and related to particular services performed by Service Company for
or on its behalf. The methods for assigning or allocating Service Company costs
to Client Company, as well as to other associate companies, are set forth in
Appendix A.
Section 2.2 It is the intent of this Service Agreement that charges
for services shall be distributed among Client Companies, to the extent
possible, based upon direct assignment. The amounts remaining after direct
assignment shall be allocated among the Client Companies using the methods
identified in Appendix A. The method of assignment or allocation of cost shall
be subject to review by the Service Company annually, or more frequently if
appropriate. Such method of assignment or allocation of costs may be modified or
changed by the Service Company without the necessity of an amendment to this
Service Agreement; provided that, in each instance, all services rendered
hereunder shall be at actual cost thereof, fairly and equitably assigned or
allocated, all in accordance with the requirements of the Act and any orders
promulgated thereunder. The Service Company shall review with the Client Company
any proposed material change in the method of assignment or allocation of costs
hereunder and the parties must agree to any such changes before they are
B-2-2
<PAGE>
implemented. In addition, no such agreed upon material change shall be made
unless and until the Service Company shall have first given written notice to
the SEC not less than 60 days prior to the proposed effective date thereof.
Section 2.3 Service Company shall render a monthly report to Client
Company that shall reflect the information necessary to identify the costs
charged for that month. Client Company shall remit to Service Company all
charges billed to it within 30 days of receipt of the monthly report.
Section 2.4 It is the intent of this Service Agreement that the
payment for services rendered by Service Company to Client Company under this
Service Agreement shall cover all the costs of its doing business including, but
not limited to, salaries and wages, office supplies and expenses, outside
services employed, property insurance, injuries and damages, employee pensions
and benefits, miscellaneous general expenses, rents, maintenance of structures
and equipment, depreciation and amortization, and compensation for use of
capital as permitted by Rule 91 of the SEC's regulations under the Act.
ARTICLE III - TERM
This Service Agreement shall become effective as of the date first
written above, subject only to the receipt of any required regulatory approvals
from the SEC, and shall continue in force until terminated by Service Company or
Client Company, upon not less than 90 days prior written notice to the other
party. This Service Agreement shall also be subject to termination or
modification at any time, without notice, if and to the extent performance under
this Service Agreement may conflict with the Act or with any rule, regulation or
order of the SEC adopted before or after the date of this Service Agreement.
ARTICLE IV - MISCELLANEOUS
Section 4.1 All accounts and records of Service Company shall be kept
in accordance with the General Rules and Regulations promulgated by the SEC
pursuant to the Act, in particular, the Uniform System of Accounts for Mutual
Service Companies and Subsidiary Service Companies in effect from and after the
date hereof.
Section 4.2 New direct or indirect subsidiaries of Energy East which
may come into existence after the effective date of this Service Agreement, may
become additional client companies of Service Company and subject to a service
agreement with Service Company. The parties hereto shall make such changes in
the scope and character of the services to be rendered and the method of
assigning, distributing or allocating costs of such services as specified in
Appendix A, subject to the requirements of Section 2.2, as may become necessary
to achieve a fair and equitable assignment, distribution, or allocation of
Service Company costs among all associate companies including the new
subsidiaries.
B-2-3
<PAGE>
Section 4.3 Service Company shall permit Client Company access to its
accounts and records including the basis and computation of allocations.
IN WITNESS WHEREOF, the parties hereto have caused this Service
Agreement to be executed as of the date and year first above written.
ENERGY EAST MANAGEMENT
CORPORATION
BY:
------------------------------------
Name:
Title:
CLIENT COMPANY
BY:
------------------------------------
Name:
Title:
The undersigned requests all services listed in Appendix A from Energy East
Management Corporation except for __________________________________. Services
will begin _________________________.
CLIENT COMPANY
BY:
------------------------------------
Name:
Title:
B-2-4
<PAGE>
Appendix A
DESCRIPTION OF SERVICES TO BE PROVIDED BY SERVICE COMPANY AND
DETERMINATION OF CHARGES FOR SUCH SERVICES TO THE
CLIENT COMPANIES
DESCRIBED IN BODY OF APPLICATION.
FORMS BEING DEVELOPED.
B-2-5
Exhibit B-3
-----------
FORM OF SERVICE AGREEMENT
BETWEEN UTILITY SUBSIDIARY AND OTHER
SUBSIDIARY OR ENERGY EAST CORPORATION
SERVICE AGREEMENT
This Service Agreement is made and entered into this _____ day of
___________, by and between __________________ ("Client Company") and
___________________ ("Utility Company").
WITNESSETH
WHEREAS, the Securities and Exchange Commission ("SEC"), pursuant to
Section 13(b) of the Public Utility Holding Company Act of 1935 ("Act") has
authorized Utility Company to provide certain services to its associate
companies within the Energy East Corporation ("Energy East") registered holding
company system; and
WHEREAS, Client Company is an associate company of Utility Company
within the Energy East system; and
WHEREAS, Utility Company and Client Company have entered into this
Service Agreement whereby Utility Company agrees to provide and Client Company
agrees to accept and pay for various services as provided herein at cost, with
cost determined in accordance with applicable rules and regulations under the
Act, which require Utility Company to fairly and equitably allocate costs among
all associate companies to which it renders services (collectively, the "Client
Companies"), including Client Company.
NOW THEREFORE, in consideration of the premises and the mutual
agreements herein contained, the parties to this Service Agreement covenant and
agree as follows:
ARTICLE I - SERVICES
Section 1.1 Utility Company shall furnish to Client Company, as
requested by Client Company, upon the terms and conditions hereinafter set
forth, such of the services described in Appendix A hereto, at such times, for
such periods and in such manner as Client Company may from time to time request
B-3-1
<PAGE>
and that Utility Company concludes it is able to perform. Utility Company shall
also provide Client Company with such special services, in addition to those
services described in Appendix A hereto, as may be requested by Client Company
and that Utility Company concludes it is able to perform. In supplying such
services, Utility Company may arrange, where it deems appropriate, for the
services of such experts, consultants, advisers, and other persons with
necessary qualifications as are required for or pertinent to the provision of
such services.
Section 1.2 Client Company shall take from Utility Company such of the
services described in Section 1.1, and such additional general or special
services, whether or not now contemplated, as are requested from time to time by
Client Company and that Utility Company concludes it is able to perform.
Section 1.3 The cost of the services described herein or contemplated
to be performed hereunder shall be directly assigned, distributed or allocated
by activity, project, program, work order or other appropriate basis. Client
Company shall have the right from time to time to amend or alter any activity,
project, program or work order provided that (i) any such amendment or
alteration that results in a material change in the scope of the services to be
performed or equipment to be provided is agreed to by Utility Company, (ii) the
cost for the services covered by the activity, project, program or work order
shall include any expense incurred by Utility Company as a direct result of such
amendment or alteration of the activity, project, program or work order, and
(iii) no amendment or alteration of an activity, project, program or work order
shall release Client Company from liability for all costs already incurred by or
contracted for by Utility Company pursuant to the activity, project, program or
work order, regardless of whether the services associated with such costs have
been completed.
Section 1.4 Utility Company shall use its best efforts to maintain a
staff trained and experienced in the services described in Appendix A.
ARTICLE II- COMPENSATION
Section 2.1 As compensation for the services to be rendered hereunder,
Client Company shall pay to Utility Company all costs that reasonably can be
identified and related to particular services performed by Utility Company for
or on its behalf. The methods for assigning or allocating Utility Company costs
to Client Company, as well as to other associate companies, are set forth in
Appendix A.
Section 2.2 It is the intent of this Service Agreement that charges
for services shall be distributed among Client Companies, to the extent
possible, based upon direct assignment. The amounts remaining after direct
assignment shall be allocated among the Client Companies using the methods
identified in Appendix A. The method of assignment or allocation of cost shall
be subject to review by the Utility Company annually, or more frequently if
appropriate. Such method of assignment or allocation of costs may be modified or
changed by the Utility Company without the necessity of an amendment to this
Service Agreement; provided that, in each instance, all services rendered
hereunder shall be at actual cost thereof, fairly and equitably assigned or
allocated, all in accordance with the requirements of the Act and any orders
promulgated thereunder. The Utility Company shall review with the Client Company
any proposed material change in the method of assignment or allocation of costs
B-3-2
<PAGE>
hereunder and the parties must agree to any such changes before they are
implemented. In addition, no such agreed upon material change shall be made
unless and until the Utility Company shall have first given written notice to
the SEC not less than 60 days prior to the proposed effective date thereof.
Section 2.3 Utility Company shall render a monthly report to Client
Company that shall reflect the information necessary to identify the costs
charged for that month. Client Company shall remit to Utility Company all
charges billed to it within 30 days of receipt of the monthly report.
Section 2.4 It is the intent of this Service Agreement that the
payment for services rendered by Utility Company to Client Company under this
Service Agreement shall cover all the costs of its doing business including, but
not limited to, salaries and wages, office supplies and expenses, outside
services employed, property insurance, injuries and damages, employee pensions
and benefits, miscellaneous general expenses, rents, maintenance of structures
and equipment, depreciation and amortization, and compensation for use of
capital as permitted by Rule 91 of the SEC's regulations under the Act.
ARTICLE III - TERM
This Service Agreement shall become effective as of the date first
written above, subject only to the receipt of any required regulatory approvals
from any State regulatory commission with jurisdiction over Utility Company or
Client Company if Client Company is a utility and the SEC, and shall continue in
force until terminated by Utility Company or Client Company, upon not less than
90 days prior written notice to the other party. This Service Agreement shall
also be subject to termination or modification at any time, without notice, if
and to the extent performance under this Service Agreement may conflict with the
Act or with any rule, regulation or order of the SEC or of any State regulatory
commission with jurisdiction over Utility Company or Client Company if Client
Company is a utility adopted before or after the date of this Service Agreement.
ARTICLE IV - MISCELLANEOUS
Section 4.1 All accounts and records of Utility Company shall be kept
in accordance with the General Rules and Regulations promulgated by the FERC.
Section 4.2 New direct or indirect subsidiaries of Energy East which
may come into existence after the effective date of this Service Agreement, may
become additional client companies of Utility Company and subject to a service
agreement with Utility Company. The parties hereto shall make such changes in
the scope and character of the services to be rendered and the method of
B-3-3
<PAGE>
assigning, distributing or allocating costs of such services as specified in
Appendix A, subject to the requirements of Section 2.2, as may become necessary
to achieve a fair and equitable assignment, distribution, or allocation of
Utility Company costs among all associate companies including the new
subsidiaries.
Section 4.3 Utility Company shall permit Client Company access to its
accounts and records including the basis and computation of allocations.
IN WITNESS WHEREOF, the parties hereto have caused this Service
Agreement to be executed as of the date and year first above written.
UTILITY COMPANY
BY:
------------------------------------
Name:
Title:
CLIENT COMPANY
BY:
------------------------------------
Name:
Title:
The undersigned requests all services listed in Appendix A from Utility Company,
except for __________________________________. Services will begin
_________________________.
CLIENT COMPANY
BY:
------------------------------------
Name:
Title:
B-3-4
<PAGE>
Appendix A
DESCRIPTION OF SERVICES TO BE PROVIDED BY UTILITY COMPANY AND
DETERMINATION OF CHARGES FOR SUCH SERVICES TO THE
CLIENT COMPANIES
DESCRIBED IN BODY OF APPLICATION.
FORMS BEING DEVELOPED.
B-3-5
EXHIBIT H
---------
Proposed Form of Federal Register Notice
SECURITIES AND EXCHANGE COMMISSION
(Release No. ____________)
Filings under the Public Utility Holding Company Act of 1935, as amended ("Act")
_____________, 2000.
Notice is hereby given that the following filing(s) has/have been made
with the Commission pursuant to provisions of the Act and rules promulgated
thereunder. All interested persons are referred to the application(s) for
complete statements of the proposed transaction(s) summarized below. The
applications(s) and/or declaration(s) and any amendments thereto is/are
available for public inspection through the Commission's Office of Public
Reference.
Interested persons wishing to comment or request a hearing on the
application(s) and/or declaration(s) should submit their views in writing by
_____________, 2000 to the Secretary, Securities and Exchange Commission,
Washington DC 20549, and serve a copy on the relevant applicant(s) and/or
declarant(s) at the address(es) as specified below. Proof of service (by
affidavit or, in case of an attorney at law, by certificate) should be filed
with the request. Any request for hearing shall identify specifically the issues
of fact or law that are disputed. A person who so requests will be notified of
any hearing, if ordered, and will receive a copy of any notice or order issued
in the matter. After _______, 2000, the application(s) and/or declaration(s), as
filed and amended, may be granted and/or permitted to become effective.
ENERGY EAST, ET AL.
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Energy East Corporation, a New York corporation ("Energy East ")
exempt from registration by order under Section 3(a)(1) of the Public Utility
Holding Company Act of 1935, as amended (the "Act"), whose principal offices are
located at P.O. Box 1196, Stamford, CT 06904-1196, filed an
Application/Declaration on Form U-1 (File No. 70-09569) (the "Merger U-1") with
the Securities and Exchange Commission (the "Commission") under sections 9(a)(2)
and 10 seeking approval relating to the proposed acquisition by Energy East of
CMP Group, Inc., a Maine corporation ("CMP Group"), CTG Resources, Inc., a
Connecticut corporation ("CTG"), and Berkshire Energy Resources, a Massachusetts
business trust ("Berkshire") pursuant to which CMP Group, CTG and Berkshire will
each become a direct wholly-owned subsidiary of Energy East (the "Merger"). The
Commission recently approved under a separate application (File No. 70-09545)
the merger of Energy East with Connecticut Energy Corporation, a Connecticut
corporation, pursuant to which Connecticut Energy Corporation became a wholly
owned subsidiary of Energy East. Energy East Corporation, et al., Holding
Company Release No. 27128 (February 2, 2000). A third Application (File No.
70-9609, the "Financing U-1 Application"), was filed seeking approval for a
program of external financing, credit support arrangements, and other related
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proposals for the period commencing on the effective date of an order issued
pursuant to the filing and ending December 31, 2003.
Energy East will register as a public utility holding company
following the consummation of its proposed combinations with CMP Group, CTG and
Berkshire.
Energy East requests the authorization and approval by the Commission
with respect to the provision of intra-system administrative, management and
support services following the registration of Energy East as a holding company.
Specifically, Energy East requests that the Commission approve the designation
of its wholly-owned direct subsidiary, Energy East Management Corporation, a
Delaware corporation ("EE Management"), as a subsidiary service company in
accordance with the provisions of Rule 88 under the Act. In addition, Energy
East requests the authorization and approval of the form of services agreements
(the "Services Agreement") that EE Management will enter into with each of its
associate public-utility companies and each of its associate non-utility
companies that it serves and the form of services agreement that each associate
public utility company will enter with each associate company. Further, Energy
East requests approval, to the extent required, to continue service under
certain existing agreements between Energy East system companies, including
entering into extensions and renewals of such agreements or agreements with
other associate companies on substantially the same terms as are presently in
existence. Lastly, Energy East requests that the Commission find that EE
Management is so organized and will so conduct its operations so as to meet the
requirements of Section 13 of the Act and the Commission's rules under the Act.
The Service Agreements will provide methodologies to ensure that the
client companies pay to EE Management the cost of all services, computed in
accordance with the applicable rules and regulations (including, but not limited
to rules 90 and 91) under the Act and appropriate accounting standards. Where
more than one company is involved in or has received benefits from a service
performed by EE Management, the Service Agreements will provide that client
companies will pay their fairly allocated pro rata share in accordance with the
methods set out in appendices to the Service Agreements. Thus, charges for all
services provided by EE Management to associate utility companies and
non-utility companies will be on an "at cost" basis as determined under rules 90
and 91 under the Act.
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