FILE NO. 70-8037
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
AMENDMENT NO. 4
(POST-EFFECTIVE) TO
FORM U-1
APPLICATION
UNDER THE
PUBLIC UTILITY HOLDING COMPANY ACT OF 1935
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CENTRAL AND SOUTH WEST CORPORATION
1616 Woodall Rodgers Freeway
Dallas, Texas 75202
CENTRAL POWER AND LIGHT COMPANY
P.O. Box 2121
Corpus Christi, Texas 78403
(Names of companies filing this statement and
addresses of principal executive offices)
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CENTRAL AND SOUTH WEST CORPORATION
(Name of top registered holding company parent)
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Wendy G. Hargus , Treasurer
Central and South West Corporation
1616 Woodall Rodgers Freeway
Dallas, Texas 75202
Wendy G. Hargus, Treasurer
Central Power and Light Company
P.O. Box 2121
Corpus Christi, Texas 78403
Ronald T. Astin, Esq.
Vinson & Elkins L.L.P.
2300 First City Tower
1001 Fannin Street
Houston, Texas 77002-6760
(Name and addresses of agents for service)
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Item 1. Description of Proposed Transaction Item No. 1 is hereby amended and
restated as follows:
Central and South West Corporation, a Delaware corporation ("CSW"), is
a registered holding company under the Public Utility Holding Company Act of
1935 (the "Act"). Central Power and Light Company, a Texas corporation ("CPL"),
is a wholly-owned electric utility subsidiary of CSW.
On May 29, 1992, CSW and CPL entered into a settlement with Houston
Industries Incorporated, a Texas corporation ("HII"), and its subsidiary,
Houston Lighting & Power Company, a Texas corporation ("HLP"), to normalize
business relations between the two systems and to settle several disputes which
had existed between the two systems for some time. One such dispute involved
allegations by CPL that HLP breached its duties and obligations in its
performance as the Project Manager of the South Texas Project Electrical
Generating Station ("STP"). Other disputes did not raise jurisdictional issues
under the Act.
On July 17, 1992, CSW and CPL (as well as CSW Credit, Inc., a
wholly-owned subsidiary of CSW), filed an Application-Declaration on Form U-1
under the Act (File No. 70- 8037) relating to the settlement of the litigation
described above and with regard to certain financing activities of CSW Credit,
Inc. The Application-Declaration was amended on October 9, 1992, December 3,
1992, and December 23, 1992, and was the subject of orders of the Securities and
Exchange Commission (the "Commission") dated December 8, 1992 (Release No.
35-25696)(the "Original Order") and December 29, 1992 (Release No. 35-25720),
each of which declared effective CSW's and CPL's Application-Declaration with
respect to certain of the matters covered thereby. However, in the Original
Order, the Commission reserved
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jurisdiction with respect to one aspect of the settlement of the litigation, the
formation of a new Texas non-profit corporation to act as the operating company
for STP, pending completion of the record with respect thereto. The Commission's
reservation of jurisdiction was based, in part, upon the fact that at the date
of the Original Order the owners of STP had not yet agreed on the structure of
the proposed operating company for STP. Prior to the filing of this
post-effective amendment, the owners of STP have approved in substantially final
form the structure of such operating company, and CSW and CPL are filing this
amended application (as amended by this post-effective amendment, the
"Application") in order to complete the record and request authority from the
Commission to enter into the final form of documents to create such operating
company.
Background
STP is jointly owned by HLP, CPL, the City of San Antonio, Texas,
acting by and through the City Public Service Board of San Antonio ("San
Antonio"), and the City of Austin, Texas ("Austin" and, collectively with HLP,
CPL and San Antonio, the "Owners"). STP consists of three principal types of
assets and properties: (1) two 1250 megawatt nuclear-fueled generating units;
(2) a plant site and common station facilities; and (3) a 400-foot-wide
transmission corridor. The two generating units and all of the common facilities
incident thereto, including the plant site, are owned by the Owners as
tenants-in-common. Each of the Owners is a party to an agreement (as heretofore
amended, the "Participation Agreement"), which provides for the joining together
of the Owners as tenants-in-common in owning and operating facilities for the
production of electric energy and for the delivery of the electric energy
produced to each Owner according to its respective ownership interest in STP.
The Participation Agreement has
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been previously filed with the Commission. The electric energy so obtained by
each Owner from the jointly-owned facilities is distributed and sold by that
Owner within its own system. Under the Participation Agreement, the current
ownership of STP is as follows:
HLP 30.8%
CPL 25.2%
San Antonio 28.0%
Austin 16.0%
Total 100.0%
Presently, a management committee comprised of one representative of
each Owner makes all material decisions and determinations incident to the
operation of STP. In the absence of unanimity, this committee generally acts
through the vote of two or more Owners holding at least 60 percent of the
ownership interest in STP. Currently, HLP acts as the sole project manager of
STP, except for maintenance of the transmission corridor, which is the
responsibility of CPL. As project manager, HLP initiates the preparation of
engineering and administrative plans and studies and furnishes the management
committee with all necessary information upon which determinations are made by
the management committee and carries out and coordinates the directions of the
management committee incident to the operation of the system and the generation
of power. In addition, as project manager HLP management maintains and furnishes
the Owners with all required records of costs and expenses to permit the Owners
properly to reflect and report their interests in STP in their respective
financial and income statements. Under the Participation Agreement, the
management committee has the power to remove HLP as project manager by the vote
of a majority of the ownership interest.
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The Proposed Transaction
In order to give each Owner an equal voice in the operation of STP, the
Owners have agreed to relieve HLP of its rights and obligations as project
manager and to have a new entity, STP Nuclear Operating Company, a Texas
non-profit corporation without membership interests ("OPCO"), assume HLP's
obligations to manage STP. The Owners determined to use a state law non-profit
corporation to operate STP by contract to better assure a proportionate sharing
of costs, liabilities and benefits associated with the operation of STP.
OPCO, as operator of STP, will not be an owner of STP and will not be
entitled to take, or have any ownership interest in, any energy generated by
STP. OPCO will be formed by the Owners. It is proposed that the Owners will
effect the substitution of OPCO for HLP in the operation of STP by entering into
an Amended and Restated Participation Agreement (the "Amended Participation
Agreement") in substantially the form attached as Exhibit 12. The Owners also
propose to enter into the South Texas Project Operating Agreement with OPCO (the
"Operating Agreement")(attached hereto as Exhibit 13), pursuant to which OPCO
will maintain and operate STP, subject to the control and direction of an Owners
Committee consisting of representatives of the Owners appointed under the terms
of the Amended Participation Agreement.
OPCO will be organized as a non-stock, non-member, non-profit
corporation under the Texas Non-Profit Corporation Act. This structure was
selected by the Owners because of legal issues posed by other alternatives for
Owners other than CPL. Specifically, the Texas Constitution prohibits municipal
entities from owning stock in a private corporation or from
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lending their credit to private entities.1 However, this prohibition
does not, in the opinion of counsel to San Antonio and Austin, limit
participation in a non-profit corporation, at least with respect to a
corporation that has no members and no outstanding ownership interests.2
Similarly, HII's exempt status under the Act requires all of its "subsidiary
companies" within the meaning of the Act to be organized under the laws of
Texas. Although CSW and CPL have been advised that HII does not regard OPCO as a
"subsidiary company" within the meaning of the Act, the issue is avoided by
utilizing a Texas entity. The Articles of Incorporation (the "Articles") and
Bylaws (the "Bylaws") of OPCO will be in substantially the forms attached as
Exhibits 14 and 15, respectively. Pursuant to the Articles and Bylaws, the
Operating Agreement and the Amended Participation Agreement, the Owners will
manage the affairs of OPCO. Under the Articles and the Bylaws, each Owner
appoints one director to the Board of Directors of OPCO (an "Owner Director").
In addition, the chief executive officer (chosen by and subject to removal by
the affirmative vote of three Owner Directors) of OPCO serves as a director.
Owner Director vacancies may be filled only by the Owner who designated the
person whose absence created the vacancy. If the vacancy is created by the
absence of the chief executive officer of OPCO, such vacancy is filled by the
affirmative vote of three of the Owner Directors.3
Each Owner Director is expected to advocate and further the interests of
the Owner who appointed the Owner Director;
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1 Tex. Const., art. III, ss. 53 (amended 1904).
2 At least two opinions of the Texas Attorney General have authorized
municipalities to enter into such arrangements. See Op. Tex. Att'y Gen.
No. M-1023 (1971) and Op Tex. Att'y. Gen No. DM-1994 (1992).
3 Article VII of the Articles and Section 2.2 of the Bylaws of OPCO.
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and no Owner Director is expected to further the interests of the other Owners.
4 The officers of OPCO are elected or appointed by the Board of Directors.
OPCO is not authorized under its Articles to conduct any business or
activity other than serving as operator of STP pursuant to the Operating
Agreement and is prohibited from engaging in any activity seeking profit or
pecuniary gain.5 A unanimous vote of the Board of Directors is necessary to
dissolve OPCO or merge it with any other entity or to amend its Articles and
Bylaws.6 Any residual assets remaining upon the dissolution of OPCO may not
be distributed to any person other than a governmental agency or charity.7
Pursuant to the Operating Agreement, OPCO will not have an ownership
interest in (i) the property or utility assets constituting STP, (ii) the power
generated by STP, (iii) the revenues received from the sale of power, or (iv)
the fuel used to generate the power.8 STP will continue to be owned by the
Owners as tenants-in-common pursuant to the terms of the Amended Participation
Agreement. As between OPCO and the Owners, all risks associated with ownership
or loss of the property comprising STP and all benefits issuing from ownership
will be vested in the Owners.9 The Operating Agreement provides that the
Owners recognize that OPCO "is a non-profit corporation, formed, controlled and
financed by the [Owners] solely for the
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4 Article IV of the Articles of OPCO.
5 Article IV of the Articles of OPCO.
6 Articles VIII and IX of the Articles of Incorporation of OPCO.
7 Article VIII of the Articles of OPCO.
8 Section 2.2E of the Operating Agreement.
9 Section 4.2 of the Operating Agreement.
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purpose of acting on behalf of the [Owners] in carrying out the
responsibilities which are described herein."10 The Owners indemnify OPCO
from any damage resulting from its performance under the Operating Agreement.
Such indemnity is intended by the Owners to hold OPCO harmless from any
liability arising from OPCO's operation of STP11 and is consistent with the
objective of all Owners that all actual costs or expenses of OPCO of whatever
nature will be borne by the Owners severally in accordance with their respective
ownership interests in STP. Such costs would be incurred by OPCO based on
budgets approved by the Owners after consultation with OPCO. OPCO will have no
right or authority to bind the Owners, without their consent, to the acquisition
or disposition of property.12
Pursuant to the Operating Agreement, OPCO would possess, use, maintain,
repair, improve, operate, decontaminate and decommission STP (excluding
operation of certain transmission corridors and switch yards, which will remain
in the control of HLP or CPL). OPCO will provide or provide for all labor,
supervision, supplies, equipment and services for the operation, maintenance,
repair, replacement, reconstruction, decontamination and decommissioning of all
aspects of STP in order to deliver to the Owners the electric power generated at
STP. The Owners will bear the costs and expenses incurred by OPCO in operating
STP in proportion to their respective ownership interests in STP, but OPCO will
not have any right to any of the electric energy produced by STP and will not be
entitled to any management fee or similar compensation and will derive no profit
from its operations under the Operating
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10 Section 6.1 of the Operating Agreement.
11 Section 6.1, 6.2 and 6.3 of the Operating Agreement.
12 Section 14.1 of the Operating Agreement.
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Agreement. OPCO will not be permitted to market on behalf of any Owner any
electric energy produced by STP. Any property of whatsoever kind or nature
acquired by OPCO will be acquired for the account and benefit of the Owners and
will be owned by the Owners as tenants-in-common as provided in the Amended
Participation Agreement.13
Issues Under the Act
Section 2(a)(3). The applicants believe that the activities of OPCO
undertaken in accordance with the provisions of the Amended Participation
Agreement should not cause OPCO to be regarded as an "electric utility company"
within the meaning of Section 2(a)(3) of the Act, because OPCO will not possess
the level of operating authority with regard to STP necessary to cause it to be
deemed to "operate" STP under Section 2(a)(3) pursuant to the Ebasco Services,
Inc. line of no-action letters,14 nor is such a result required by the
plain meaning of the statute or, in applicants' view, sound public policy. As
previously stated, OPCO will have no ownership interest in STP or the
electricity generated by STP. Applicants believe that OPCO will not "operate"
STP because OPCO will be subject to supervision of the Owners and, accordingly,
will not have complete operating responsibility over STP and because OPCO will
not be paid fees based on revenue or income. In effect, OPCO will serve as a
device for allocating actual
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13 Sections 1.7, 2.1, 2.2E, and Article III of the Operating Agreement.
14 Ebasco Services, Inc., SEC No-Action Letter, (publicly available
September 16, 1982). Since the issuance of Ebasco Services, Inc., a series of
similar no-action letters have confirmed the conclusions reached in Ebasco
Services, Inc., even in cases in which the company in question had a greater
measure of responsibility than is contemplated for OPCO. See, Westvaco Corp. ,
SEC No-Action Letter, (publicly available August 26, 1996), Tucson Elec. Power
Corp., SEC No-Action Letter, (publicly available September 27, 1995), Kenetech
Windpower, Inc., SEC No-Action Letter, (publicly available April 15, 1994) Ogden
Martin Systems of Clark Limited Partnership, SEC No-Action Letter, (publicly
available December 6, 1993, Bechtel Power Corporation, SEC No-Action Letter,
(publicly available May 22, 1991); Colstrip Energy Limited Partnership, SEC NO-
Action Letter, (publicly available December 7, 1989), and Combustion
Engineering, Inc., SEC No-Action Letter, (publicly available August 24, 1987).
<PAGE>
operating expenses among the Owners of STP, and OPCO will derive no other
revenues from its activities beyond those necessary to defray such expenses.
Indeed, except for the substitution of OPCO as the operator, the Amended
Participation Agreement is not materially different from the Participation
Agreement and, accordingly, applicants believe, is properly regarded as a
reorganization of the existing relationship among the Owners rather than as the
admission of a new "electric utility company" as "operator" of STP.
The arrangements regarding OPCO are very similar to the situations in which
the Commission staff has granted no-action relief regarding similarly structured
operating companies or in which exemption applications have been approved by the
Commission because the arrangements under discussion did not involve an
"operator" within the meaning of Section 2(a)(3) of the Act due to the level of
authority retained by the owners of the facilities. See Wolf Creek Operating
Corporation (publicly available December 11, 1995), Western Resources, Inc.
(publicly available June 26, 1995) and Kansas Power & Light Company, Release No.
35-25465 (February 5, 1992).15 Accordingly, applicants believe that the
formation of OPCO and the implementation of the South Texas Project Operating
Agreement does not result in OPCO becoming the "operator" of STP within the
meaning of the Act.
Sections 9(a) and 13(b). The formation of OPCO does not involve the
acquisition of a "security" within the meaning of the Act, since the formation
of OPCO does not involve the
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15 See, also, Ogden Martin Systems of Clark Limited Partnership
(publicly available December 6, 1993, Bechtel Power Corporation, (publicly
available May 22, 1991); Colstrip Energy Limited Partnership (publicly
available December 7, 1989), Combustion Engineering, Inc. (publicly
available August 24, 1987) and Ebasco Services, Inc. (publicly available
August 17, 1982).
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acquisition of any instrument enumerated in the Act as a "security" or of any
instrument commonly thought of as a security. Indeed, the Owners will not
acquire anything upon the formation of OPCO, but are merely reorganizing their
existing relationship in a fashion that does not result in the creation of a new
venture or the acquisition by any of the Owners of any right or power they do
not already possess under the existing Participation Agreement. Accordingly,
applicants believe the formation of OPCO does not involve the acquisition of
"any security" or "any other interest in any business" within the meaning of
Section 9(a)(1) of the Act, since the operation of power plants is an inherent
part of the core business of electric utility companies. The formation of OPCO
is not, in applicants' view, an "other" interest in any business, merely the
reorganization of the Owners' existing interest in their existing business, STP.
See GPUNC, SEC No-Action Letter, (publicly available September 27, 1995).
However, CSW and CPL request any necessary authority under Section 9(a)(1) of
the Act to effect the transactions described herein.
While not entirely clear under existing law, each of CSW and CPL will
treat OPCO as a "subsidiary company" within the meaning of Section 2(a)(8) of
the Act, and CSW and CPL will comply with all applicable provisions of the Act
and rules and regulations thereunder with respect to OPCO. In addition, each of
CSW and CPL will treat OPCO as a subsidiary service company subject to Section
13(b) of the Act and will cause an annual report on Form U-13-60 to be filed in
respect of OPCO's activities. The applicants request that the Commission waive
the requirement that a Form U-13-1 Application-Declaration be filed in respect
of the formation of OPCO as all information required by that Form is contained
herein or will be provided by amendment.
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The documents with respect to OPCO are in substantially final form,
although additional minor changes may be made to such documents. CSW and CPL
request that the Commission release jurisdiction and issue an appropriate order
authorizing CPL to enter into and conclude the final form of documents to create
OPCO. CSW and CPL will augment the record herein with the final documents to be
filed with a certificate of notification. Item 2. Fees, Commissions and
Expenses. Item 2 is amended as follows:
An estimate of the approximate amount of fees and expenses to be
incurred in connection with the proposed transactions and not previously
reported is as follows:
Type of Expense Approximate Amount
Counsel Fees $35,000
Miscellaneous and Incidental Expenses $1500
including, travel, telephone, copying and
postage
Item 3. Applicable Statutory Provisions.
Item 3 is amended as follows:
Sections 9(a), 10 and 13 of the Act are or may be applicable to CPL's
participation in OPCO. Sections 9(a) and 10 may be deemed to be applicable to
CPL's participation in OPCO insofar as such participation is construed as the
acquisition of an "interest in any business" under Section 9(a)(1)
notwithstanding the fact that no securities are being acquired. To the extent
any other sections of the Act may be applicable to the proposed transactions,
CSW and CPL request
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appropriate orders of exemption thereunder to permit the formation of OPCO and
the implementation of the revised management arrangements with regard to STP as
described herein.
Item 4. Regulatory Approvals.
Item 4 is amended as follows:
The Owners have requested letter rulings from the Internal Revenue
Service as to the tax status of OPCO. Also, other approvals from the state or
local authorities which may be required will be sought. Item 5. Procedure. Item
5 is amended as follows:
CSW and CPL request that the Commission issue and publish no later than
June 6, 1997 the requisite notice under Rule 23 with respect to the filing of
this application, such notice to specify a date not later than July 2, 1997 as
the date after which an order granting and permitting this application to become
effective may be entered by the Commission, and that the Commission enter not
later than July 3, 1997 an appropriate order granting and permitting this
Application to become effective.
CSW and CPL respectively request that appropriate and timely action be
taken by Commission in this matter..
No recommended decision by a hearing officer or other responsible
officer of the Commission is necessary or required in this matter.
The Division of Investment Management may assist in the preparation of
the Commission's decision in this matter.
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There should be no 30-day waiting period between the issuance and the
effective date of any order issued by the Commission in this matter; and CSW and
CPL respectively request that any such order be made effective immediately upon
entry thereof. Item 6. Exhibits and Financial Statements. Item 6 is amended by
adding at the end thereof the following:
Confidential
Exhibit 12 - Form of Amended and Restated Participation Agreement (to
be filed by amendment).
Confidential
Exhibit 13 - Form of South Texas Project Operating Agreement (to be
filed by amendment).
Confidential
Exhibit 14 - Form of Articles of Incorporation of OPCO (to be filed by
amendment).
Confidential
Exhibit 15 - Form of Bylaws of OPCO (to be filed by amendment).
Exhibit 16 - Preliminary Opinion of Vinson & Elkins LLP, Counsel to CSW
and CPL (to be filed by Amendment).
Exhibit 17 - Final or "past tense" opinion of Vinson & Elkins LLP,
Counsel to CSW and CPL (to be filed with Certificate of Notification).
Exhibit 18 - Financial Data Schedule (per books and pro forma)(to be
filed by amendment).
Exhibit 19 - Financial Statements (per books and pro forma) of CSW and
CPL and consolidated subsidiaries as of March 31, 1997 (to be filed by
amendment)
Exhibit 20 - Proposed Form of Notice.
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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: May 23, 1997
CENTRAL AND SOUTHWEST CORPORATION
By:/s/ WENDY G. HARGUS
Wendy G. Hargus
Treasurer
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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: May 23, 1997
CENTRAL POWER AND LIGHT COMPANY
By:/s/ WENDY G. HARGUS
Wendy G. Hargus
Treasurer
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INDEX OF EXHIBITS
EXHIBIT TRANSMISSION
NUMBER EXHIBITS METHOD
12 Form of Amended and Restated Participation
Agreement (to be filed by amendment)
13 Form of South Texas Project Operating
Agreement (to be filed by amendment)
14 Form of Articles of Incorporation of OPCO (to
be filed by amendment)
15 Form of Bylaws of OPCO (to be filed by
amendment)
16 Preliminary Opinion of Vinson & Elkins LLP,
Counsel to CSW and CPL (to be filed by
Amendment)
17 Final or "past tense" opinion of Vinson & Elkins LLP,
Counsel to CSW and CPL (to be filed with Certificate
of Notification)
18 Financial Data Schedule (per books and pro
forma) (to be filed by amendment)
19 Financial Statements (per books and pro forma) of
CSW and CPL and consolidated subsidiaries as of
December 31, 1996 (to be filed by amendment)
20 Proposed Form of Notice EDGAR
EXHIBIT 20
[FORM OF NOTICE]
Notice is hereby given that Central and South West Corporation, a
Delaware corporation ("CSW"), a registered holding company under the Public
Utility Holding Company Act of 1935 (the "Act") and Central Power and Light
Company, a Texas corporation ("CPL"), a wholly-owned electric utility subsidiary
of CSW have filed an Application-Declaration under Sections 9(a), 10 and 13(b)
of the Act in connection with the formation of a Texas non-profit, non-member
corporation to serve as the operating company for the South Texas Project
Electric Generating Station ("STP"). All interested persons are referred to the
application, which is summarized below, for a complete statement of the facts.
On May 29,1992 CSW and CPL entered into a settlement with Houston
Industries Incorporated ("HII"), and its subsidiary, Houston Lighting & Power
Company, a Texas corporation ("HLP"), to normalize business relations between
the two systems and to settle several disputes which had existed between the two
systems for some time. One such dispute involved allegations by CPL that HLP
breached its duties and obligations in its performance as the Project Manager of
the STP. The settlement and related matters was the subject of orders of the
Securities and Exchange Commission (the "Commission") dated December 8, 1992
(Release No. 35-25696)(the "Original Order") and December 29, 1992 (Release No.
35-25720), each of which declared effective CSW's and CPL's
Application-Declaration with respect to certain of the matters covered thereby.
However, in the Original Order, the Commission reserved jurisdiction with
respect to one aspect of the settlement of the litigation, the formation of a
new
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Texas non-profit corporation to act as the operating company for STP, pending
completion of the record with respect thereto.
STP is jointly owned by HLP, CPL, the City of San Antonio,
Texas, acting by and through the City Public Service Board of San Antonio ("San
Antonio"), and the City of Austin, Texas ("Austin" and, collectively with HLP,
CPL and San Antonio, the "Owners"). The Owners' respective ownership percentages
in STP would not be effected by the formation of OPCO (as hereinafter defined).
As a final step in implementing the Settlement and in order to give each Owner
an equal voice in the operation of STP, the Owners have agreed to relieve HLP of
its rights and obligations as project manager of STP and to have a new entity,
STP Nuclear Operating Company, a Texas non-profit corporation without membership
interests ("OPCO"), assume HLP's obligations to manage STP.
OPCO, as operator of STP, will not be an owner of STP and will not be
entitled to take, or have any ownership interest in, any energy generated by
STP. OPCO will be formed by the Owners. Pursuant to the relevant agreements to
be executed by the Owners, OPCO will maintain and operate STP, subject to the
control and direction of an Owners Committee consisting of representatives of
the Owners. The Board of Directors of OPCO will be chosen by the Owners and will
be composed of one representative of each Owner and the Chief Executive Officer
of OPCO. OPCO is not authorized under its organizational documents to conduct
any business or activity other than serving as operator of STP pursuant to the
relevant agreements and is prohibited from engaging in any activity seeking
profit or pecuniary gain. A unanimous vote of the Board of Directors is
necessary to dissolve OPCO or merge it with any other entity or to
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amend its organizational documents. Any residual assets remaining upon the
dissolution of OPCO may not be distributed to any person other than a
governmental agency or charity.
Pursuant to the Operating Agreement, OPCO will not have an ownership
interest in (i) the property or utility assets constituting STP, (ii) the power
generated by STP, (iii) the revenues received from the sale of power, or (iv)
the fuel used to generate the power. STP will continue to be owned by the Owners
as tenants-in-common. As between OPCO and the Owners, all risks associated with
ownership or loss of the property comprising STP and all benefits issuing from
ownership will be vested in the Owners.
OPCO would possess, use, maintain, repair, improve, operate,
decontaminate and decommission STP (with certain exclusions). OPCO will provide
or provide for all labor, supervision, supplies, equipment and services for the
operation, maintenance, repair, replacement, reconstruction, decontamination and
decommissioning of all aspects of STP in order to deliver to the Owners the
electric power generated at STP. The Owners will bear the costs and expenses
incurred by OPCO in operating STP in proportion to their respective ownership
interests in STP, but OPCO will not have any right to any of the electric energy
produced by STP and will not be entitled to any management fee or similar
compensation and will derive no profit from its operations under the Operating
Agreement. OPCO will not be permitted to market on behalf of any Owner any
electric energy produced by STP. Any property of whatsoever kind or nature
acquired by OPCO will be acquired for the account and benefit of the Owners.
Notice is further given that any interested person may, not later than
July 2, 1997, request in writing that a hearing be held in respect of the
requests for authority, relating to the nature of
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his interest and the reasons for each request, and the issues of fact and law
which he desires to controvert; or he may request that he be notified should the
Commission order a hearing herein. Any such request should be addressed:
Secretary, Securities and Exchange Commission, Washington, D.C. 20549. At any
time after said date, the Commission may grant the authorization requested, or
take such other action as it deems appropriate.
