UNITED STATES OF AMERICA
BEFORE THE SECURITIES AND EXCHANGE COMMISSION
THIRD AMENDMENT TO APPLICATION/DECLARATION ON FORM U-1/A UNDER
PUBLIC UTILITY HOLDING COMPANY ACT OF 1935
C&T Enterprises, Inc.
RR 2, Box 17
Wysox, PA 18854
Tri-County Rural Electric Cooperative
22 North Main Street
Mansfield, PA 16933
Wilderness Area Utilities, Inc.
22 North Main Street
Mansfield, PA 16933
Claverack Rural Electric Cooperative
RR 2, Box 17
Wysox, PA 18854
(Name of companies filing this statement and address
of principal executive office)
(NONE)
PARENT HOLDING COMPANY
See below
(Name and address of agents for service)
COPIES OF ANY PLEADINGS AND OTHER DOCUMENTS
MAY BE SERVED UPON THE FOLLOWING
Robert Chappell, Esquire Kenneth Zielonis, Esquire
VAN de HIEL & CHAPPELL STEVENS & LEE
14 South Main Street Suite 310
P.O. Box 57 208 North Third Street
Mansfield, PA 16933 P.O. Box 12090
Harrisburg, PA 17108-2090
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Item 1 - DESCRIPTION OF ACQUISITION
A. Introduction
This Third Amendment to the Application\Declaration of
C&T Enterprise, Inc., ("C&T"), Tri-County Rural Electric
Cooperative, Inc., ("Tri-County"), Claverack Rural Electric
Cooperative, Inc., ("Claverack"), and Wilderness Area Utilities,
Inc., ("Wilderness"), (collectively referred to as "Joint
Applicants"), clarifies the physical integration of certain of
the Joint Applicants' electrical facilities as well as the public
utility status of certain of the Joint Applicants. It also
clarifies the status of how electrical power will be transmitted
as described in the Application\Declaration.
As noted in the Application\Declaration, Tri-County is
now an operating public utility as defined by the Public Utility
Holding Company Act of 1935, ("Act"). It is not, however, a
public utility for purposes of the Pennsylvania Public Utility
Code and thus it is not subject to regulation by the Pennsylvania
Public Utility Commission, ("PaPUC"). Tri-County also is
currently a public utility holding company for purposes of the
Act as it owns directly the stock of Wilderness. Wilderness in
turn owns all the stock of a public utility (Wellsboro Electric
Company) operating solely within Pennsylvania. Wilderness is not
a public utility company for purposes of the Act; it is simply a
holding company. It will remain solely a holding company after
consummation of the proposed transaction. Wellsboro Electric
Company is not a holding company but rather an operating public
utility. Both Tri-County and Wilderness were granted Section
3(a)(1) exemptions by the Commission in an earlier proceeding.
Tri-County Rural Electric Cooperative, Inc., et. al., HCAR No.
35-26167 (November 22, 1994).
As a result of the consummation of the proposed
acquisition, Claverack shall become a holding company for
purposes of the Act and continue its operation as a public
utility (as a Pennsylvania electric cooperative) as defined by
the Act. After consummation of the transaction, Citizens'
Electric Company will be solely an operating public utility for
purposes of the Act, its current status.
B. Description of the Parties to the Acquisition
2. Description of Facilities
(a) Tri-County
(ii) Electrical Generating Facilities and
Resources
As noted in the Application\Declaration, Tri-County, as
well as its sister electric cooperative Claverack, indirectly own
generation and transmission facilities through the Allegheny
Electric Cooperative, ("AEC"). AEC is jointly owned by Tri-
County, Claverack and the other twelve (12) rural electric
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cooperatives in Pennsylvania and New Jersey. AEC is the owner of
various transmission facilities located throughout Pennsylvania
and New Jersey and the owner of generation facilities located in
Pennsylvania. Since it owns generation and transmission
facilities, AEC is a member of the PJM. Such AEC-owned
transmission facilities interconnect with the transmission
facilities of other PJM member companies throughout the territory
of AEC and the distributing cooperatives such as Tri-County and
Claverack. AEC-owned generating facilities are interconnected
with the PJM grid. A map depicting the interconnection of the
AEC transmission and generation facilities and the facilities of
other PJM transmission owners is attached as Exhibit E-2. The
shaded areas in North Central Pennsylvania represents the service
territories of Tri-County and Claverack.
Tri-County and AEC are not directly interconnected.
Likewise, Claverack and AEC are not directly interconnected. AEC
facilities and Tri-County facilities are interconnected through
the transmission facilities of PJM member company GPU Energy,
Inc. through its operating company Pennsylvania Electric Company,
("GPU"). Claverack facilities also are interconnected with AEC
facilities through GPU. Tri-County and Claverack are not
directly interconnected. Again, they are interconnected through
PJM members AEC and GPU.
As described in the Application\Declaration, AEC
obtains wholesale power from a variety sources. AEC also owns
and operates a 21 MW hydroelectric plant near Raystown,
Pennsylvania. This facility is interconnected with GPU. Power
generated at this facility is sold to cooperatives such as Tri-
County and Claverack. It is delivered to Tri-County and
Claverack through the transmission arrangements noted above
regarding AEC and GPU. Additionally, AEC owns a ten (10%)
percent interest in the 2,100 MW Susquehanna Steam Electric
Station, a nuclear plant located in Berwick, Pennsylvania. This
electrical power is delivered to AEC and then the cooperatives
through PP&L and then GPU. The remaining ownership interest in
the Susquehanna nuclear plant is held by Pennsylvania Power &
Light Company, ("PP&L"), another PJM member who uses this power
to supply its wholesale and retail load.
Wellsboro is surrounded by Tri-County but not directly
interconnected. Wellsboro is connected to the PJM grid through
GPU. Wellsboro has prepared an application to join the PJM and
shall become a member of the PJM upon consummation of the
acquisition. Citizens' is interconnected to the PJM through
PP&L. It is currently a wholesale customer of PP&L and thus
receives a portion of its electrical power needs from the same
source as the cooperatives, e.g., the Susquehanna nuclear plant.
Citizens' has prepared an application to join the PJM and shall
become a member of the PJM upon consummation of the acquisition.
Finally, Tri-County and Claverack are now indirect members of PJM
through their ownership interest in AEC, a PJM member company.
Upon consummation of the acquisition, both Tri-County and
Claverack shall become direct members of the PJM. <PAGE 3>
Item 3 - APPLICABLE STATUTORY STANDARDS
A. Legal Analysis
2. Section 10(c)
(b) Section 10(c)(2)
(ii) Integrated Public Utility System
Citizens', Wellsboro, Tri-County, and Claverack will
operate as an integrated public utility system. Prospectively,
they shall all be members of the PJM system. All of the above
operating entities currently are interconnected through the
facilities of PJM member companies, one of which (AEC) is jointly
owned by Tri-County and Claverack. Citizens', Tri-County and
Claverack are not only interconnected with PJM facilities, but a
portion of their electrical power needs are supplied from the
same generating source, the Susquehanna nuclear plant. While not
served by this generating source currently, Wellsboro can be
served prospectively because of its interconnection to the PJM
system. Additionally, Wellsboro also can receive a portion of
its electrical power needs from the Raystown facility as
Wellsboro is interconnected with GPU. Wellsboro does not
currently receive, however, any power from that facility.
Each of the above operating entities possesses
contractual rights to use the extra high voltage transmission
facilities of the PJM system. Further, as indicated above, they
are all interconnected to the PJM system. These PJM transmission
facilities will now be integrated to an even greater degree
because transmission service will be rendered on a regional,
integrated basis across all transmission owner networks. The
above operating companies can be operated as a single integrated
system. Since none of these companies operate high voltage
transmission lines, they must rely upon the PJM system for such
transmission needs.
These systems will also be operated as an economic
single interconnected and coordinated system. The electrical
power supply requirements of each of these operating companies
will be administrated and managed centrally on the basis of need,
reliability, reserve commitments to PJM and economic pricing
principles.
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Item 6 EXHIBITS AND FINANCIAL STATEMENTS
A. EXHIBITS
A-1 Tri-County Articles of Incorporation
A-2 Claverack Articles of Incorporation
A-3 C&T Articles of Incorporation
A-4 Citizens' Articles of Incorporation
A-5 Wilderness Articles of Incorporation
A-6 Wellsboro Articles of Incorporation
B-1 January 5, 1998 Memorandum of Understanding
B-2 Tender Offer
B-3 Second Amended Memorandum of Understanding
B-4 May 28, 1998 Partnership Agreement
D-1 Pennsylvania Public Utility Commission Application
E-1 Map of Citizens' and Wellsboro Systems (not filed
electronically)
E-2 Map of Allegheny Electric Cooperative Facilities and
Facilities of Other PJM Members (not filed
electronically)
F-1 Opinion of Counsel (to be filed by amendment)
F-2 "Past Tense" Opinion of Counsel (to be filed by
amendment)
G-1 Proposed Form of Public Notice
B. FINANCIAL STATEMENTS
FS-1 Consolidated Financial Statements of Tri-County
for years ended December 31, 1997 and 1996 (not
filed electronically)
FS-2 Consolidated Financial Statements of Claverack for
years ended December 31, 1997 and 1996 (not filed
electronically)
FS-3 Audited Financial Statements of Citizens' Electric
Company for year ended December 31, 1997 and 1996
(not filed electronically)
FS-4 Audited Financial Statements of Wellsboro Electric
Company for year ended December 31, 1997 and 1996
(not filed electronically)
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SIGNATURE
Pursuant to the requirements of the Public Utility
Holding Company Act of 1935, the undersigned company has duly
caused this Application and Declaration to be signed on its
behalf by the undersigned.
C&T Enterprises, Inc.
Tri-County Rural Electric
Cooperative, Inc.
Claverack Rural Electric
Cooperative, Inc.
Wilderness Area Utilities, Inc.
/s/ Kenneth Zielonis
Kenneth Zielonis, Esq.
STEVENS & LEE
208 N. Third Street, Suite 310
P.O. Box 12090
Harrisburg, PA. 17108-2090
Dated: February 2, 1999 Attorneys for Joint Applicants
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EXHIBIT E-2
Map of Allegheny Electric Cooperative Facilities
and Facilities of other PJM Members
(not filed electronically)
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