EXHIBIT h.1
FORM OF NOTICE
SECURITIES AND EXCHANGE COMMISSION
(Release No. 35- )
Filings Under the Public Utility Holding Company Act of 1935 ("Act").
June xx, 2000
Notice is hereby given that the following filings has/have been made
with the Securities and Exchange Commission (the "Commission") pursuant to
provisions of the Act and rules promulgated thereunder. All interested
persons are referred to the application(s) and/or declaration(s) for complete
statements of the proposed transaction(s) summarized below. The
application(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
July xx, 2000 to the Secretary, Securities and Exchange Commission,
Washington, D.C. 20549, and serve a copy on the applicant(s) and/or
declarant(s) at the address(es) 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 said date, the application(s) and/or
declaration(s), as filed or as amended, may be granted and/or permitted to
become effective.
CONSOLIDATED EDISON, INC. (File 70-9613)
Consolidated Edison, Inc. ("New CEI") 4 Irving Place, New York, N.Y.,
10003, a Delaware Corporation currently not a public utility holding company,
Consolidated Edison, Inc. ("CEI"), a New York corporation, 4 Irving Place,
New York, N.Y., 10003, a gas and electric holding company exempt from
registration under the Public Utility Holding Company Act of 1935 (the "Act")
and Northeast Utilities, 174 Brush Hill Avenue, West Springfield, MA 01090, a
registered gas and electric public utility holding company ("NU") have filed
an application/declaration (the "Application") under sections 6(a), 7, 8,
9(a), 10 and, by reference, Section 11 and Rule 58 under the Act.
The Application seeks approvals relating to the proposed combination of
CEI and NU under New CEI. Under the proposal, CEI will merge with and into
New CEI, which is currently a wholly-owned subsidiary of CEI, with New CEI
being the surviving entity, and NU will merge with N Acquisition LLC, a
Massachusetts limited liability company controlled by New CEI, with NU being
the surviving entity, all as set forth in an Amended and Restated Agreement
and Plan of Merger dated as of January 11, 2000 (the "Merger Agreement").
Upon consummation of the merger, (i) the holders of CEI's common shares and
NU's common shares will together own all of New CEI's outstanding shares of
common stock, (ii) New CEI will register as a public utility holding company
under the Act, (iii) New CEI will own all of the assets of CEI and (iv) NU
will be a wholly-owned subsidiary of New CEI and continue to be registered
under the Act.
CEI is a public utility holding company for Consolidated Edison Company
of New York, Inc. ("CECONY") and Orange and Rockland Utilities, Inc. ("O&R"),
and certain non-utility subsidiaries and is not itself an operating company.
CEI is exempt from all provisions of the Act by virtue of Section 3(a)(1)
except for Section 9(a)(2) thereof. CECONY provides electric service and
natural gas service to customers in New York City and Westchester County.
CECONY also supplies steam service to customers in parts of Manhattan. O&R
provides electric service and natural gas service to customers in
southeastern New York State and, through its public utility subsidiaries,
Pike County Light and Power Company and Rockland Electric Company, adjacent
sections of Pennsylvania and New Jersey. O&R is exempt from all provisions
of the Act by virtue of Section 3(a)(2) except for Section 9(a)(2) thereof.
As of March 31, 2000, CEI had total assets of $15.5. billion and had
operating revenues for the 12-month period ending March 31, 2000 of
approximately $8 billion, and had approximately 3.2 million electric utility
customers in New York, New Jersey and Pennsylvania and 1.1 million gas
utility customers in New York, Pennsylvania and New Jersey. CEI also holds
various nonutility companies engaged in various energy related activities.
Northeast Utilities is the parent of a number of companies comprising
the Northeast Utilities system (the "System") and is not itself an operating
company. The System furnishes franchised retail electric service in
Connecticut, New Hampshire and western Massachusetts through three of NU's
wholly-owned subsidiaries, The Connecticut Light and Power Company ("CL&P"),
Public Service Company of New Hampshire ("PSNH") and Western Massachusetts
Electric Company ("WMECO"), and additionally furnishes retail electric
service to a limited number of customers through another wholly-owned
subsidiary, Holyoke Water Power Company ("HWP"), doing business in and around
Holyoke, Massachusetts. In addition to their retail electric service
business, CL&P, PSNH, WMECO and HWP (including its wholly-owned subsidiary,
Holyoke Power and Electric Company) (collectively, the "NU Operating
Companies") together furnish wholesale electric service to various
municipalities and other utilities throughout the Northeast. The System
serves approximately 30 percent of New England's electric needs. As of March
31, 2000, NU had total assets of $9.8 billion (not including YES assets) and
had total revenues for the 12-month period ending March 31, 2000 of $4.8
billion and had approximately 1.7 million electric utility customers in
Connecticut, Massachusetts and New Hampshire. NU also holds various
nonutility companies engaged in various energy related activities.
In addition, in March, 2000, Yankee Energy System, ("YES"), a gas
utility holding company merged with and into NU. YES is a public utility
holding company incorporated in Connecticut. In addition to being the
holding company for Yankee Gas, it also is the holding company for four
active non-utility subsidiaries, NorConn Properties, Inc. ("NorConn"), Yankee
Energy Financial Services Company ("Yankee Financial"), Yankee Energy
Services Company ("YESCo") and R.M. Services, Inc. ("RMS"). YES had total
assets of $926.3 million for the period ended March 31, 2000 and total
revenues for the 12-month period ended March 31, 2000 of $327.1 million and
served approximately 185,000 customers in Connecticut
After the Merger is consummated, New CEI will be a registered public
utility holding company under the Act. It will own, directly, two public
utilities, O&R and CECONY, a public utility holding company, NU, and various
nonutility subsidiaries. O&R will also own two public utilities, Pike and
RECO, and various nonutility subsidiaries. O&R will remain an exempt holding
company under Section 3(a)(2) of the Act. NU will continue as a registered
public utility holding company under the Act and will own, directly, five
public utilities, WMECO, CL&P, PSNH, NAEC and HWP, along with various other
non-utility subsidiaries. NU will also own, directly, YES, which will be an
exempt public utility holding company under the Act which will own one public
utility, Yankee Gas, and various other nonutility subsidiaries. The combined
system will provide electric service to parts of New York, Pennsylvania, New
Jersey, Connecticut, Massachusetts and New Hampshire and gas service to parts
of Connecticut, New York, and Pennsylvania.
Under the Merger Agreement, (i) CEI will merge into New CEI, with New
CEI being the surviving corporation, and (ii) N Acquisition LLC, a
Massachusetts limited liability company controlled by CEI, will merge with
and into NU, with NU being the surviving entity. Upon completion of the
Merger, the holders of CEI common shares and NU common shares will together
own all of New CEI's outstanding shares of common stock, New CEI will own all
of the assets of CEI and NU will be a wholly-owned subsidiary of New CEI.
The Merger Agreement provides that NU shareholders may elect to receive,
for each NU common share they own, a fraction (the "Exchange Ratio") of a
share of New CEI common stock equal to a numerator of $25.00 divided by the
weighted average trading price of a CEI common share over 20 trading days
randomly selected from the 40 trading days ending five trading days prior to
the closing. However, the CEI share price used to calculate the Exchange
Ratio will not be less than $36.00 nor greater than $46.00. Also, $1.00 will
be added to the numerator if, prior to the closing of the Merger, certain NU
subsidiaries enter into binding agreements to sell to one or more non-
affiliated third parties their respective interests in the Millstone Station
Unit 2 and Millstone Station Unit 3 nuclear power plant assets, in
accordance, in all material respects, with applicable law and the rules and
regulations of the Connecticut Department of Public Utility Control ("DPUC")
for approval of such agreements and (x) the Utility Operations and Management
Unit of the DPUC has submitted a formal written recommendation to the DPUC
for approval of the agreements or (y) the DPUC has issued a final order
approving the agreements (the "divestiture condition"). In addition, in the
event the Merger does not close by August 5, 2000, $.0034 will be added to
the numerator for each day after August 5, 2000 through the day prior to the
closing of the Merger.
In the alternative, holders of NU common shares may elect to receive
cash consideration equal to $25.00 per NU common share, provided that an
additional $1.00 per share will be payable if, prior to the closing of the
Merger, NU satisfies the divestiture condition and an additional $.0034 per
share will be payable for every day after August 5, 2000 through the day
prior to the closing of the Merger.
If the Merger closes on or prior to December 31, 2000, and the
divestiture condition has not been satisfied but thereafter and on or prior
to December 31, 2000, NU satisfies the divestiture condition, then each NU
shareholder (whether the shareholder elected stock or cash consideration)
will be entitled to $1.00 per converted NU common share to be paid in cash by
New CEI.
The Merger Agreement is subject to customary mutual closing conditions
such as approval by the CEI and NU shareholders, absence of legal
prohibitions on completion of the Merger, New CEI's registration statement on
Form S-4 not being subject to any stop order or proceeding seeking a stop
order, and approval for listing on the New York Stock Exchange of the shares
of New CEI common stock to be issued in the Merger, subject to official
notice of issuance. In addition, the Merger Agreement is subject to customary
closing conditions specific to each party, such as the accuracy of the
representations and warranties given by the other party, the absence of a
material adverse change in the financial condition of the other party and
receipt of all regulatory approvals.
The Merger Agreement also contains certain covenants relating to the
conduct of business by NU pending the consummation of the Transaction, which
are customarily contained in merger transactions generally. Among other
things, NU must carry on its business in the ordinary course consistent with
past practice, and may not increase dividends beyond specified levels or
issue capital stock, all except as otherwise specified. The Merger Agreement
also contains customary restrictions on, among other things, charter and
bylaw amendments, capital expenditures, acquisitions, dispositions,
incurrence of indebtedness and certain increases in employee compensation and
benefits and affiliate transactions.
