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No. 70-8645
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
AMENDMENT NO. 1
TO
FORM U-1 APPLICATION-DECLARATION
UNDER THE
PUBLIC UTILITY HOLDING COMPANY ACT OF 1935
______________________________________
CENTRAL AND SOUTH WEST CORPORATION
1616 Woodall Rodgers Freeway
P.O. Box 660164
Dallas, Texas 75202
(Names of companies filing this statement and
addresses of principal executive offices)
_____________________________________
CENTRAL AND SOUTH WEST CORPORATION
(Name of top registered holding company parent)
____________________________________
Stephen J. McDonnell
Treasurer
Central and South West Corporation
1616 Woodall Rodgers Freeway
P.O. Box 660164
Dallas, Texas 75202
Joris M. Hogan
Milbank, Tweed, Hadley & McCloy
One Chase Manhattan Plaza
New York, New York 10005
(Names and addresses of agents for service)
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Central and South West Corporation ("CSW"), a Delaware Corporation
and a registered holding company under the Public Utility Holding Company Act
of 1935, as amended (the "Act"), hereby files this Amendment No. 1 to the Form
U-1 Application-Declaration in File No. 70-8645 to amend and restate Sections
3 and 4 and the title and first sentence of Section 6 of Item 1 in their
entirety, and to amend and restate Item 3 in its entirety. In all other
respects the Application-Declaration as previously filed and as heretofore
amended will remain the same.
Item 1 is hereby amended to restate Sections 3 and 4 and the title and first
sentence of Section 6 in their entirety as follows:
3. FORMATION OF ENERSHOP; REQUESTED FINANCING AUTHORITY.
CSW hereby requests authority (i) to organize EnerShop as a
subsidiary of CSW under the laws of the State of Delaware, with
authorized capital stock of 1,000 shares of common stock, par value
$0.10 per share ("Common Stock"), to engage in the businesses described
herein; (ii) to make an initial purchase of 100 shares of EnerShop
Common Stock for an aggregate cash purchase price of $1,000; and (iii)
to make loans to EnerShop on the terms set forth below. It is proposed
that the authority requested herein be effective in each case through
the earlier of December 31, 2000 or the effective date of rules adopted
by the Commission exempting such transactions from the approval
requirements of the Act.
Loans to EnerShop under the authority requested herein would be
made by CSW and may be funded through CSW's external short-term
borrowing program, as previously authorized by order of the Commission
dated March 21, 1995 (File No. 70-8557, Holding Company Act Release No.
26254). Such loans would be made from time to time prior to December
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31, 1999, with maturities no later than December 31, 2000. Such
loans would bear an interest rate not to exceed the prime rate in
effect on the date of the loan at a bank designated by CSW (which
rate may differ from CSW's cost of capital). Such loans may be
evidenced by notes by EnerShop payable to the order of CSW in the
principal amount of such loan, or may be made pursuant to open
account advances.
Investments by CSW in EnerShop would be utilized by EnerShop
in order to fund its authorized activities, including principally
the working capital needs of its consulting and other energy
management services and for payment of general and administrative
costs.
EnerShop will not undertake any acquisition of an exempt wholesale
generator ("EWG") or a foreign utility company ("FUCO") as defined in
Sections 32 and 33 of the 1935 Act. Neither CSW nor any subsidiary
thereof has a direct or indirect ownership interest in an EWG or FUCO
and EnerShop will not, without obtaining the prior approval of the
Commission in a separate proceeding, render services to any associate
company that is an "exempt wholesale generator" or "foreign utility
company" within the meaning of Sections 32 and 33 of the 1935 Act,
respectively. As a result, no compliance with Rule 54 under the 1935
Act is required.
In addition to the foregoing loans and initial stock purchase, for
which authority is requested, CSW may make additional purchases of
EnerShop Common Stock from time to time pursuant to the exemption set
forth in Rule 52(d), make loans to EnerShop pursuant to the exemption
set forth in Rule 52(b), and make open-account advances and capital
contributions and conversions of loans to equity investments, through
forgiveness of such loans or otherwise, pursuant to the exemption set
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forth in Rule 45(b)(4). Together with such additional exempt
stock purchases, loans, open-account advances, capital
contributions, and conversions, the aggregate amount of the loans
and stock purchases for which authority is sought herein would not
exceed $100,000,000 outstanding at any one time.
4. INDEMNIFICATIONS AND GUARANTEES
CSW proposes, from time to time, to guarantee or to act as surety
on bonds, indebtedness and performance and other obligations issued or
undertaken by EnerShop in connection with its business. In the ordinary
course of its business, it is anticipated that EnerShop will be required
to furnish various types of bonds including bid bonds, performance
bonds, and material and payment bonds, and to provide commercial
sureties for its obligations under certain of such bonds. The proposed
indemnification and guarantees will facilitate EnerShop's obtaining such
bonds when needed and more favorable rates than in the absence of such
indemnification and guarantees. CSW believes that it will be necessary
to provide guarantees of EnerShop's performance and other obligations
under contracts and bids with third parties in order to facilitate
EnerShop's obtaining such contracts. CSW also believes that the absence
of such parent guarantees of EnerShop's performance and other
obligations would prevent EnerShop in many cases from participating in
projects, or would make its participation more costly, thereby
diminishing EnerShop's competitiveness in the marketplace.
It is therefore proposed that CSW have the authority to provide
such guarantees and indemnifications and to make surety arrangements as
to EnerShop's performance and undertaking of obligations, in an
aggregate amount outstanding at any one time (including all commitments
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that could be called) of $100,000,000, such authority to be
effective through the earlier of December 31, 2000 or the
effective date of rules adopted by the Commission exempting such
guarantees, indemnifications and surety arrangements from the
approval requirements of the Act. Any such guarantees,
indemnifications or surety arrangements outstanding at December
31, 2000 shall continue until expiration or termination in
accordance with their terms, but in no event shall such guarantee,
indemnification or surety arrangement continue beyond December 31,
2002. This authority is included in, and is not in addition to,
the $100,000,000 financing authority requested in Section 3 above.
6. ACCOUNTING FOR TRANSACTIONS
Revenues from EnerShop customers (all of which will be non-
associate companies) will be calculated to reimburse all applicable
costs, including overheads, plus produce a profit for EnerShop.
Item 3 is hereby amended and restated in its entirety as follows:
Item 3. Applicable Statutory Provisions.
The initial issuance and sale by EnerShop of the Common Stock and
of securities evidencing loans to be made to EnerShop is subject to
Sections 6 and 7 of the 1935 Act and the acquisition thereof by CSW is
subject to Sections 9(a) and 10. The making of open-account advances by
CSW to EnerShop with interest would be subject to Section 12(b) and Rule
45(a) thereunder.
The making of cash capital contributions by CSW to EnerShop and
the proposed guaranty by CSW of liabilities to third parties are subject
to Section 12(b) and the exemption therefrom set forth in Rule 45
thereunder. The possible conversion of loans from CSW to capital
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contributions is also considered to be subject to Section 12(b)
and the exemption therefrom set forth in Rule 45 thereunder.
The capital contributions and loan conversions described in
Item 1 hereof (insofar as such conversions are deemed to
constitute capital contributions) and open-account advances
without interest would be within the terms of Rule 45(b)(4) as
amended by Commission Release No. 35-26311 and therefore will be
exempt from Commission approval requirements under Rule 45(a).
Share purchases by CSW subsequent to the initial share purchase
described herein would be within the terms of Rule 52(d) as
amended by Commission Release No. 35-26311 and would therefore be
exempt from Commission approval requirements under Section 9(a).
The proposals to engage in the various different lines of
business summarized in this filing are subject to Sections 9(a)
and 10 of the 1935 Act. The rendering of services and other
contemplated transactions between EnerShop and any other CSW
company is subject to Section 13(b) of the 1935 Act and Rules 81,
87, 90, 91 and 92 thereunder. The proposed transactions will be
carried out in accordance with the procedures specified in Rule 24
of the 1935 Act and pursuant to an order of the Commission with
respect thereto.
In February 1995, the Commission in EAU Cogenex Corporation
(Holding Company Act Release No. 35-26232, February 15, 1995)
recognized that the provision of energy management services is
closely related to the core business of electric utility
companies. As in the case of Cogenex, EnerShop will offer energy
management services in order to increase the efficient use of
energy, thereby reducing the need to construct new generating and
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transmission facilities, and in order to promote compliance with
environmental regulations. In addition, the Commission has
proposed for comment a rule to be designated Rule 58 that would
exempt the acquisition by a registered holding company or any
subsidiary company of securities of an "energy-related company"
from the requirement of prior Commission approval under Sections
9(a)(1) and 10 of the Act.
S I G N A T U R E
Pursuant to the requirements of the Public Utility Holding Company
Act of 1935, as amended, the undersigned company has duly caused this document
to be signed on its behalf by the undersigned thereunto duly authorized.
Dated: June 30, 1995
CENTRAL AND SOUTH WEST
CORPORATION
By /s/STEPHEN J.MCDONNELL
Stephen J. McDonnell
Treasurer
