<PAGE> 1
File No. 70-9131
U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
------------------------------------------------
FORM U-1/A
AMENDMENT NO. 1 TO
JOINT APPLICATION-DECLARATION
UNDER
THE PUBLIC UTILITY HOLDING COMPANY ACT OF 1935
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THE COLUMBIA GAS SYSTEM, INC.
12355 Sunrise Valley Drive
Suite 300
Reston, VA 20191-3458
COLUMBIA SERVICE PARTNERS, INC.
121 Hill Pointe Drive
Suite 100
Canonsburg, PA 15317
------------------------------------------------
(Names of company or companies filing this statement
and addresses of principal executive offices)
THE COLUMBIA GAS SYSTEM, INC.
------------------------------------------------
(Name of top registered holding company parent of
each applicant or declarant)
J. W. Trost, Vice President
COLUMBIA GAS SYSTEM SERVICE CORPORATION
12355 Sunrise Valley Drive
Suite 300
Reston, VA 20191-3458
------------------------------------------------
(Name and address of agent for service)
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Names and Addresses of Subsidiary Company Agents for Service:
R. S. Gustafson, Controller
COLUMBIA SERVICE PARTNERS, INC.
121 Hill Pointe Drive
Suite 100
Canonsburg, PA 15317
------------------------------------------------
(Names and Addresses of Other Agents for Service)
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The Columbia Gas System, Inc. ("Columbia"), a registered holding
company under the Public Utility Holding Company Act of 1935 (the "Act"),
hereby submits for filing this Amendment No. 1 to the Joint
Application-Declaration on Form U-1 in File No. 70-9131 to amend and restate
the Joint Application-Declaration it its entirety.
ITEM 1. DESCRIPTION OF PROPOSED TRANSACTION
(a) Furnish a reasonably detailed and precise description of the
proposed transaction, including a statement of the reasons why it is desired to
consummate the transaction and the anticipated effect thereof. If the
transaction is part of a general program, describe the program and its relation
to the proposed transaction.
The Columbia Gas System, Inc. ("Columbia"), a Delaware Corporation,
and a holding company registered with the U. S. Securities and Exchange
Commission ("Commission") under the Public Utility Holding Company Act of 1935
("the Act"), and its indirect subsidiary company Columbia Service Partners,
Inc. ("Service Partners") are requesting Commission approval to update and
expand the system's existing consumer services authority.
By order dated March 25, 1996, the Commission authorized Columbia to
establish one or more direct or indirect subsidiaries to engage in the business
of providing energy-related services to customers of local distribution
companies ("LDCs") affiliated with Columbia and to customers of nonaffiliated
LDCs that are served by Columbia's interstate natural gas transmission
companies. In particular, the Commission approved the following consumer
services:
1) Safety Inspections -- Residential and small commercial
business customers may be offered an array of energy assessment and
energy-related safety inspections such as carbon monoxide and radon
testing and wire safety checks;
2) Appliance Financing -- The consumer services company may
provide customer financing in the form of short-term loans to cover
the period of installation of energy-related appliances until
permanent financing can be obtained by the customer, or long-term
loans for a period not to exceed the lesser of 10 years or the
expected useful life of the equipment;
3) Billing Insurance -- The consumer services company, through a
contractual arrangement with American Banker's Insurance Group or
another vendor, may provide bill payment protection for customers up
to $400 a month for six months should the customer become unemployed,
disabled or die;
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4) Appliance Repair Warranty -- Customers may be offered an
appliance repair service for their heating and air conditioning
systems and other major appliances;
5) Gas Line Repair Warranty -- Customers may be offered an
opportunity to warrant against the cost of repair of faulty gas
service lines located both within and external to the customer's
location;
6) Merchandising of Energy Related Goods -- Customers may be
offered the opportunity to purchase energy-related devices such as
water heaters, gas grills, gas logs and furnaces;
7) Commercial Equipment Service -- Operators of commercial
equipment may be offered a repair warranty program that would respond
to faulty equipment;
8) Bill Risk Management Products -- A variety of programs may be
made available to gas customers interested in hedging energy price or
consumption fluctuations;
9) Consulting and Fuel Management Services -- Commercial and
industrial customers may be offered advisory and/or management
services regarding energy consumption and its measurement;
10) Electronic Measurement Services -- Commercial and industrial
customers may be offered a variety of enhanced measurement and billing
services that will enable them to better monitor their energy
consumption and expenditures.
The Commission further authorized the provision to end-use customers served by
the Columbia LDCs or by LDCs that are served by the Columbia transmission
companies with certain incidental services related to the consumption of energy
and the maintenance of property by those end-users, where the need for the
service arises as a result of, or evolves out of, the above services and the
incidental services do not differ materially from the enumerated services. The
order cites incidental services related to: maintenance, financing or sale (but
not manufacture) of the energy-consuming equipment; the measurement, analysis,
risk management or other services relating to the energy commodity itself; and
the process by which the end-user arranges for delivery, acquires, consumes and
pays for the energy commodity. The Columbia Gas System, Inc., Holding Co. Act
Release No. 26498 (March 25, 1996) (the "1996 Service Partners Order").
Service Partners is currently the Columbia entity that is engaged in the above
consumer services business.
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The 1996 Service Partners order is subject to certain limitations.
Among other things, the order, which was issued prior to the adoption of Rule
58, limits customer financing authority, restricts the terms of billing
insurance, and requires that the revenues from sales in states served by
Columbia's LDCs must exceed revenues from customers in all other states.(1)
Columbia and Service Partners are asking the Commission to remove such
limitations, including all geographic and customer-based restrictions, on the
consumer services business.
In addition, Columbia wishes to expand its consumer services authority
to enable it to offer a full range of services, through one or more, direct or
indirect, existing or newly formed subsidiaries (collectively, the "Consumer
Services Company"), either independently or through a joint venture or an
alliance with a nonassociate company. Consistent with the Commission's
precedent, Columbia seeks authority for the Consumer Services Company to
provide:
- Energy Management Services involving the marketing, sale,
installation, operation and maintenance of various products
and services related to the business of energy management and
demand-side management, often on a turn-key basis. Energy
Management Services may include, among other things, audits,
energy audits; facility design and process control and
enhancements; construction, installation, sales and
maintenance of (and training client personnel to operate)
energy conservation equipment; design, implementation,
monitoring and evaluation of energy conservation programs;
development and review of architectural, structural and
engineering drawings for energy efficiencies, design and
specification of energy consuming equipment; and general
advice on programs, as contemplated by Rule 58(b)(1)(i). In
addition, Energy
__________________________________
1. It should be noted that other similarly-situated registered holding
companies have not been so restricted. See, e.g., Cinergy Corp.,
Holding Co. Act Release No. 26662 (Feb. 7, 1997) (no customer revenue
restrictions on consumer services business), and New Century
Energies, Inc., Holding Co. Act Release No. 26748 (Aug. 1, 1997) (the
Commission authorized the new registered holding company to provide to
domestic customers, wherever located, various retail services
including "energy analysis, project management, design and
construction, energy efficient equipment installation and maintenance,
facilities management services, environmental services and compliance,
fuel procurement, and other similar kinds of managerial and technical
services"). In addition, the Commission explicitly removed such
geographic restrictions with respect to companies acquired pursuant to
Rule 58, as well as with respect to businesses that could have been
acquired pursuant to the rule.
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Management Services may include the design, construction,
installation, sales and maintenance of new and retrofit
heating, ventilating, and air conditioning ("HVAC"),
electrical and power systems, alarm and warning systems,
motors, pumps, lighting, water, water-purification and
plumbing systems, and related structures as approved by the
Commission in Cinergy Corp., Holding Co. Act Release No. 26662
(Feb. 7, 1997) (the "Cinergy Solutions Order"). The Consumer
Services Company also may provide conditioned power services,
that is, services and products designed to prevent, control,
or mitigate adverse effects of power disturbances on a
customer's electrical system to ensure the level of power
quality required by the customer, particularly with respect to
sensitive electronic equipment, again as approved in the
Cinergy Solutions Order.
- Performance Contracting Services and the provision of related
systems. Performance contracting is a service that combines
engineering and financial expertise to develop cost reduction
strategies that will enable customers to realize energy and
other resource efficiency goals. These services, which can be
implemented on a start-up or retrofit basis, usually entail
design, engineering, installation and measurement services,
with a guarantee of operational and energy-related savings to
ensure that the customer is achieving the projected results.
Specific functions may include among other things: process
control, fuel management, asset management services, in
respect of energy-related systems, facilities and equipment,
including distribution systems and substations, transmission,
storage and peak-shaving facilities, gas supply and/or
electric generation facilities (stand-by generators and
self-generation facilities), boilers, chillers (refrigeration
and coolant equipment), alarm/warning systems, HVAC, water and
lighting systems, located on or adjacent to the premises of a
customer and used by that customer in connection with its
business activities, as well as environmental compliance,
energy supply and building automation systems and controls, as
authorized in the Cinergy Solutions Order. The Consumer
Services Company may also provide such services to qualifying
and non-qualifying cogeneration and small power production
facilities under the Public Utility Regulatory Policies Act of
1978. See Rule 58(b)(1)(viii).
- Municipality Management Services, including Asset Management
Services for other owners of utility assets or systems such as
municipalities and electric cooperatives, as permitted under
the Cinergy Solutions Order. In addition, the Consumer
Services Company may act as agent for energy management
matters,
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including the operation and dispatch of generating facilities,
for municipalities and utility cooperatives. See Louis
Dreyfus Electric Power, SEC No-Action Letter (April 8, 1996).
- Consulting Services to associate and nonassociate companies,
and individuals. The Consulting Services include technical
and consulting services involving technology assessments,
power factor correction and harmonics mitigation analysis,
meter reading and repair, rate schedule design and analysis,
environmental services, engineering services, billing services
(including consolidation billing and bill disaggregation
tools), risk management services, communications systems,
information systems/data processing, system planning,
strategic planning, finance, feasibility studies, and other
similar or related services. See the Cinergy Solutions Order;
see also Rule 58(b)(1)(vii). Columbia also proposes to offer
marketing services to associate and nonassociate businesses in
the form of bill insert and automated meter-reading services,
as well as other consulting services, such as how to set up a
marketing program. See Consolidated Natural Gas Co., Holding
Co. Act Release No. 26757 (Aug. 27, 1997) (the "1997 CNG
Order"). To the extent such services are provided to
associate companies, they will be rendered in accordance with
Section 13 and the rules thereunder.
- Retail Services including service line repair and extended
warranties with respect to all of the utility or
energy-related service lines internal and external to a
customer's premises, and other similar or related services,
including surge protection. See the Cinergy Solutions Order.
The Consumer Services Company may also provide centralized
bill payment centers for "one stop" payment of all utility and
municipal bill and related services, and annual inspection,
maintenance and replacement of any utility or energy-related
equipment or appliances. See Consolidated Natural Gas Co.,
Holding Co. Act Release No. 26363 (Aug. 28, 1995) (the "1995
CNG Order").
- Monitoring and Response Services for, among other things,
fire, security, building automation and critical application
processes. The Consumer Services Company may offer products
that enhance safety, increase energy/process efficiency, or
provide energy-related information, such as security systems
(including, but not limited to, carbon monoxide, smoke and
fire detectors, and fire extinguishers), as well as repair
services in connection with such problems as carbon monoxide
leaks and faulty equipment wiring. Such services may involve
the operation of call/dispatch centers on behalf of Columbia's
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transmission or local distribution companies, as well as
nonassociate companies. These products are an extension of,
and in connection with, the Safety Inspections that were
authorized in the 1996 Service Partners Order. The Commission
has approved similar activities for other registered holding
companies. See, e.g., the 1997 CNG Order.
- Energy Peaking Services via propane-air/LNG. This involves
the provision of back-up electricity or gas supply in periods
of high or "peak" energy demand. propane-air (a mixture) or
liquefied natural gas ("LNG"), stored nearby or on-site, are
fuel sources for such back-up services. The Commission has
previously authorized registered holding companies to provide
propane services. See the 1995 CNG Order.
- Project Development and Ownership involving the installation
of gas-fired turbines for on-site generation and consumption
of electricity. See the 1995 CNG Order.
- Customer Appreciation/Retention Programs intended to promote
good will and thereby consolidate the customer base for
Columbia's nonregulated activities. Such programs could
include the offering of prepaid phone cards or various forms
of insurance. In one example, the Consumer Services Company
would broker a customer appreciation accidental death and
disability ("AD&D") plan to its existing customers of both
utility and nonutility affiliates. The Consumer Services
Company would purchase a group policy, with a face value of
$1000 per covered customer, for a nominal fee and then offer
the coverage at no cost. Those customers who accept the
no-cost coverage would have the opportunity to increase their
coverage at a competitive rate. The Consumer Services Company
would receive a commission on any additional coverage. Such
commission would be used to defray the costs of the customer
appreciation/retention programs. The Consumer Services
Company would act as agent only. Neither Columbia nor its
subsidiary companies would assume any liability under the
insurance policies. The applicants believe that activities to
promote good will and thereby consolidate and expand the
customer base for Columbia's nonregulated activities are in
the ordinary course of business of a registered holding
company, and so should be permitted under Section 9(c)(3) of
the Act.
- Other Goods and Services as are permissible for a
gas-registered holding company under Rule 58 and incidental
services related to the consumption of energy and the
maintenance of property by those end-users, where the need for
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the service arises as a result of, or evolves out of, the
above services and the incidental services do not differ
materially from the enumerated services. See the 1996 Service
Partners Order and the 1997 CNG Order.
Provision of the above goods and services, which are closely related to the
system's core energy business, is intended to complement Columbia's existing
consumer services authority in furtherance of Columbia's goal to become a
full-service energy provider. No company in the Columbia holding company
system ("System") will undertake any such activity without further Commission
approval if, as a result thereof, it would become a public utility company
within the meaning of the Act.
Columbia may undertake the proposed business activities through
existing or newly-formed, direct or indirect, subsidiaries. In addition, it is
contemplated that Columbia, through its subsidiary companies, may enter into
arrangements with nonassociate companies. Columbia requests authority to
acquire, directly or indirectly, the securities or an interest in the business
of nonassociate companies that derive substantially all of their revenues from
the above activities. See the Cinergy Solutions Order.
Columbia seeks authority for the Consumer Services Company to provide
financing to, or broker nonassociate third-party financing for, customers in
connection with all of its authorized consumer services. Financing would also
be available for purchases by the System's utility customers of energy-related
equipment from a nonassociated third party. Customer financing may take the
form of, among other things, direct loans, leases, installment purchase
arrangements and loan guarantees. Interest on loans and imputed interest on
lease payments will be secured or unsecured. Any obligations acquired from
customers may be assigned to banks, leasing companies or other financial
institutions, with or without recourse. See the Cinergy Solutions Order.
In its order dated December 23, 1996 (File No. 70-8925; Holding Co.
Act Release No. 26634), the Commission reserved jurisdiction over participation
in Columbia's Money Pool by new direct or indirect subsidiaries of Columbia
engaged in new lines of business. Columbia hereby requests that the Commission
release this jurisdiction with respect to participation in the Money Pool by
those direct and indirect subsidiaries that are formed pursuant to the specific
authorization sought herein.
Columbia represents that it will not seek recovery through higher
rates to customers of the System's public utility company subsidiaries to
compensate it for any losses the Consumer Services Company may sustain, or
inadequate returns the Consumer Services Company may realize, resulting from
the proposed consumer services.
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It is contemplated that the Columbia local distribution companies will
continue to assist the Consumer Services Company with customer billing,
accounting and other energy-related services for consumer services offered to
the System's utility customers. The use of such personnel by the Consumer
Services Company will not impair the System's utility service. If, at any
time, the utility staff levels are not adequate to handle these extra
responsibilities, staff will be added to the Consumer Services Company to meet
the increased demand. All services between the System utilities and the
Consumer Services Company will be billed at cost in accordance with Section
13(b) of the Act and Rules 87, 90 and 91 thereunder. See the 1996 Service
Partners Order. To the extent permitted by law, the Consumer Services
Companies, including Service Partners, may compete with other companies in the
Columbia System.
* * * * *
Rule 24(c)(1), in pertinent part, provides that, unless otherwise
designated in an application or declaration, every order is subject to a
requirement that the transaction proposed be carried out within 60 days of the
date of such order. As a practical matter, the failure to designate an
alternative period has lead to a number of lapsed orders in the past,
necessitating the filing of post-effective amendments and the issuance of
supplemental orders. To avoid a recurrence of this situation, Columbia hereby
designates an indefinite period as the period in which it will carry out
transactions authorized in this order, or previously authorized by Commission
order, in accordance with the terms and conditions of, and for the purposes as
authorized by the relevant orders.
* * * * *
The conditions of Rule 54 are satisfied: At present, Columbia has no
"aggregate investment" within the meaning of Rule 53(a)(1)(i) in exempt
wholesale generators or foreign utility companies. None of the disabling
conditions under Rule 53(b) exist with respect to Columbia and so Rule 53(c) is
inapplicable.
(b) Describe briefly, and where practicable state the approximate
amount of, any material interest in the proposed transaction, direct or
indirect, of any associate or affiliate of the applicant or declarant company
or any affiliate of any such associate company.
Service Partners is a wholly-owned subsidiary of CES which is a
wholly-owned subsidiary of Columbia.
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(c) If the proposed transaction involves the acquisition of
securities not issued by a registered holding company or subsidiary thereof,
describe briefly the business and property, present or proposed, of the issuer
of such securities.
Not applicable.
(d) If the proposed transaction involves the acquisition or
disposition of assets, describe briefly such assets, setting forth original
cost, vendor's book cost (including the basis of determination) and applicable
valuation and qualifying reserves.
Not applicable.
ITEM 2. FEES, COMMISSIONS AND EXPENSES
(a) State (1) the fees, commissions and expenses paid or incurred, or
to be paid or incurred, directly or indirectly, in connection with the proposed
transaction by the applicant or declarant or any associate company thereof, and
(2) if the proposed transaction involves the sale of securities at competitive
bidding, the fees and expenses to be paid to counsel selected by applicant or
declarant to act for the successful bidder.
<TABLE>
<S> <C>
Legal fees in connection with
the preparation of the Application-Declaration . . . . . . . . . . . . . . . $8,000.00
========
</TABLE>
(b) If any person to whom fees or commissions have been or are to be
paid in connection with the proposed transaction is an associate company or an
affiliate of the applicant or declarant, or is an affiliate of an associate
company, set forth the facts with respect thereto.
Legal services in connection with the subject application-declaration
have been rendered by the Columbia Gas System Service Corporation at cost.
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ITEM 3. APPLICABLE STATUTORY PROVISIONS
(a) State the section of the Act and the rules thereunder believed
to be applicable to the proposed transaction. If any section or rule would be
applicable in the absence of a specific exemption, state the basis of
exemption.
Sections 6, 7, 9, 10, 11, 12 and 13, and the rules thereunder, and
Rule 54 are applicable to the proposed transactions.
(b) If an applicant is not a registered holding company or a
subsidiary thereof, state the name of each public utility company of which it
is an affiliate, or of which it will become an affiliate as a result of the
proposed transaction, and the reasons why it is or will become such an
affiliate.
Not applicable.
ITEM 4. REGULATORY APPROVAL
(a) State the nature and extent of the jurisdiction of any State
commission or any Federal commission (other than the U. S. Securities and
Exchange Commission) over the proposed transaction.
The proposed transactions are not subject to the jurisdiction of any
State commission or of any federal commission other than this Commission.
(b) Describe the action taken or proposed to be taken before any
commission named in answer to paragraph (a) of this item in connection with the
proposed transaction.
Not applicable.
ITEM 5. PROCEDURE
(a) State the date when Commission action is requested. If the
date is less than 40 days from the date of the original filing, set forth the
reasons for acceleration.
It is requested that the Commission issue its Notice by November
7, 1997, and its order on or before December 7, 1997.
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(b) State (i) whether there should be a recommended decision by a
hearing officer, (ii) whether there should be a recommended decision by any
other responsible officer of the Commission, (iii) whether the Division of
Investment Management may assist in the preparation of the Commission's
decision, and (iv) whether there should be a 30-day waiting period between the
issuance of the Commission's order and the date on which it is to become
effective.
Applicants hereby (i) waive a recommended decision by a hearing
officer, (ii) waive a recommended decision by any other responsible officer or
the Commission, (iii) consent that the Division of Investment Management may
assist in the preparation of the Commission's decision, and (iv) waive a 30-day
waiting period between the issuance of the Commission's order and the date on
which it is to become effective.
ITEM 6. EXHIBITS AND FINANCIAL STATEMENTS
(a) Exhibits
F. Opinion of Counsel for Columbia and Subsidiaries
(to be filed by Amendment).
G. Proposed Notice.
ITEM 7. INFORMATION AS TO ENVIRONMENTAL EFFECTS
(a) Describe briefly the environmental effects of the proposed
transaction in terms of the standards set forth in Section 102(2)(C) of the
National Environmental Policy Act [42 U.S.C. 4232(2)(C)]. If the response to
this term is a negative statement as to the applicability of Section 102(2)(C)
in connection with the proposed transaction, also briefly state the reasons for
that response.
The proposed transactions subject to the jurisdiction of this Commission have
no environmental impact in and of themselves.
(b) State whether any other federal agency has prepared or is
preparing an environmental impact statement ("EIS") with respect to the
proposed transaction. If any other federal agency has prepared or is preparing
an EIS, state which agency or agencies and indicate the status of that EIS
preparation.
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No federal agency has prepared or, to Columbia's knowledge, is
preparing an EIS with respect to the proposed transaction.
SIGNATURE
Pursuant to the requirements of the Public Utility Holding Company Act
of 1935, the undersigned companies have duly caused this
Application-Declaration to be signed on their behalf by the undersigned
thereunto duly authorized.
The signatures of the applicants and of the persons signing on their
behalf are restricted to the information contained in this application which is
pertinent to the application of the respective companies.
THE COLUMBIA GAS SYSTEM, INC.
DATE: November 5, 1997 by://s//M. W. O'Donnell
----------------------------------------------
M. W. O'Donnell, Senior Vice President
& Chief Financial Officer
COLUMBIA SERVICE PARTNERS, INC.
DATE: November 5, 1997 by://s//P. Feldman
----------------------------------------------
P. Feldman, President
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EXHIBIT G
SECURITIES AND EXCHANGE COMMISSION
(Release No. )
November __, 1997
The Columbia Gas System, Inc. ("Columbia"), a Delaware Corporation,
and a holding company registered with the U. S. Securities and Exchange
Commission ("Commission") under the Public Utility Holding Company Act of 1935
("the Act"), and its indirect subsidiary company Columbia Service Partners,
Inc. ("Service Partners") have filed an amended and restated application and
declaration requesting Commission approval to update and expand the system's
existing consumer services authority.
By order dated March 25, 1996, the Commission authorized Columbia to
establish one or more direct or indirect subsidiaries to engage in the business
of providing energy-related services to customers of local distribution
companies ("LDCs") affiliated with Columbia and to customers of nonaffiliated
LDCs that are served by Columbia's interstate natural gas transmission
companies. The Columbia Gas System, Inc., Holding Co. Act Release No. 26498
(March 25, 1996) (the "1996 Service Partners Order"). Service Partners is
currently the Columbia entity that is engaged in the consumer services business.
The 1996 Service Partners order is subject to certain limitations.
Among other things, the order, which was issued prior to the adoption of Rule
58, limits customer financing authority, restricts the terms of billing
insurance, and requires that the revenues from sales in states served by
Columbia's LDCs must exceed revenues from customers in all other states.
Columbia and Service Partners are asking the Commission to remove such
limitations, including all geographic and customer-based restrictions, on the
consumer services business.
In addition, Columbia wishes to expand its consumer services authority
to enable it to offer a full range of services, through one or more, direct or
indirect, existing or newly formed subsidiaries (collectively, the "Consumer
Services Company"), either independently or through a joint venture or an
alliance with a nonassociate company. Consistent with the Commission's
precedent, Columbia seeks authority for the Consumer Services Company to
provide:
- Energy Management Services involving the marketing, sale,
installation, operation and maintenance of various products
and services related to the
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business of energy management and demand-side management,
often on a turn-key basis. Energy Management Services may
include, among other things, audits, energy audits; facility
design and process control and enhancements; construction,
installation, sales and maintenance of (and training client
personnel to operate) energy conservation equipment; design,
implementation, monitoring and evaluation of energy
conservation programs; development and review of
architectural, structural and engineering drawings for energy
efficiencies, design and specification of energy consuming
equipment; and general advice on programs. In addition,
Energy Management Services may include the design,
construction, installation, sales and maintenance of new and
retrofit heating, ventilating, and air conditioning ("HVAC"),
electrical and power systems, alarm and warning systems,
motors, pumps, lighting, water, water-purification and
plumbing systems, and related structures. The Consumer
Services Company also may provide conditioned power services,
that is, services and products designed to prevent, control,
or mitigate adverse effects of power disturbances on a
customer's electrical system to ensure the level of power
quality required by the customer, particularly with respect to
sensitive electronic equipment.
- Performance Contracting Services and the provision of related
systems. Performance contracting is a service that combines
engineering and financial expertise to develop cost reduction
strategies that will enable customers to realize energy and
other resource efficiency goals. These services, which can be
implemented on a start-up or retrofit basis, usually entail
design, engineering, installation and measurement services,
with a guarantee of operational and energy-related savings to
ensure that the customer is achieving the projected results.
Specific functions may include among other things: process
control, fuel management, asset management services, in
respect of energy-related systems, facilities and equipment,
including distribution systems and substations, transmission,
storage and peak-shaving facilities, gas supply and/or
electric generation facilities (stand-by generators and
self-generation facilities), boilers, chillers (refrigeration
and coolant equipment), alarm/warning systems, HVAC, water and
lighting systems, located on or adjacent to the premises of a
customer and used by that customer in connection with its
business activities, as well as environmental compliance,
energy supply and building automation systems and controls.
The Consumer Services Company may also provide such services
to qualifying and non-qualifying cogeneration and small power
production facilities under the Public Utility Regulatory
Policies Act of 1978.
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- Municipality Management Services, including Asset Management
Services for other owners of utility assets or systems such as
municipalities and electric cooperatives. In addition, the
Consumer Services Company may act as agent for energy
management matters, including the operation and dispatch of
generating facilities, for municipalities and utility
cooperatives.
- Consulting Services to associate and nonassociate companies,
and individuals. The Consulting Services include technical
and consulting services involving technology assessments,
power factor correction and harmonics mitigation analysis,
meter reading and repair, rate schedule design and analysis,
environmental services, engineering services, billing services
(including consolidation billing and bill disaggregation
tools), risk management services, communications systems,
information systems/data processing, system planning,
strategic planning, finance, feasibility studies, and other
similar or related services. Columbia also propose to offer
marketing services to associate and nonassociate businesses in
the form of bill insert and automated meter-reading services,
as well as other consulting services, such as how to set up a
marketing program. To the extent such services are provided
to associate companies, they will be rendered in accordance
with Section 13 and the rules thereunder.
- Retail Services including service line repair and extended
warranties with respect to all of the utility or
energy-related service lines internal and external to a
customer's premises, and other similar or related services,
including surge protection. The Consumer Services Company may
also provide centralized bill payment centers for "one stop"
payment of all utility and municipal bill and related
services, and annual inspection, maintenance and replacement
of any utility or energy-related equipment or appliances.
- Monitoring and Response Services for, among other things,
fire, security, building automation and critical application
processes. The Consumer Services Company may offer products
that enhance safety, increase energy/process efficiency, or
provide energy-related information, such as security systems
(including, but not limited to, carbon monoxide, smoke and
fire detectors, and fire extinguishers), as well as repair
services in connection with such problems as carbon monoxide
leaks and faulty equipment wiring. Such services may involve
the operation of call/dispatch centers on behalf of Columbia's
transmission or local distribution companies, as well as
nonassociate companies.
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- Energy Peaking Services via propane-air/LNG. This involves
the provision of back-up electricity or gas supply in periods
of high or "peak" energy demand. propane-air (a mixture) or
liquefied natural gas ("LNG"), stored nearby or on-site, are
fuel sources for such back-up services.
- Project Development and Ownership involving the installation
of gas-fired turbines for on-site generation and consumption
of electricity.
- Customer Appreciation/Retention Programs intended to promote
good will and thereby consolidate the customer base for
Columbia's nonregulated activities. Such programs could
include the offering of prepaid phone cards or various forms
of insurance. In one example, the Consumer Services Company
would broker a customer appreciation accidental death and
disability ("AD&D") plan to its existing customers of both
utility and nonutility affiliates. The Consumer Services
Company would purchase a group policy, with a face value of
$1000 per covered customer, for a nominal fee and then offer
the coverage at no cost. Those customers who accept the
no-cost coverage would have the opportunity to increase their
coverage at a competitive rate. The Consumer Services Company
would receive a commission on any additional coverage. Such
commission would be used to defray the costs of the customer
appreciation/retention programs. The Consumer Services
Company would act as agent only. Neither Columbia nor its
subsidiary companies would assume any liability under the
insurance policies.
- Other Goods and Services as are permissible for a
gas-registered holding company under Rule 58 and incidental
services related to the consumption of energy and the
maintenance of property by those end-users, where the need for
the service arises as a result of, or evolves out of, the
above services and the incidental services do not differ
materially from the enumerated services.
Provision of the above goods and services, which are closely related to the
system's core energy business, is intended to complement Columbia's existing
consumer services authority in furtherance of Columbia's goal to become a
full-service energy provider. No company in the Columbia holding company
system ("System") will undertake any such activity without further Commission
approval if, as a result thereof, it would become a public utility company
within the meaning of the Act.
Columbia may undertake the proposed business activities through
existing or newly-formed, direct or indirect, subsidiaries. In addition, it is
contemplated that Columbia, through
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its subsidiary companies, may enter into arrangements with nonassociate
companies. Columbia requests authority to acquire, directly or indirectly, the
securities or an interest in the business of nonassociate companies that derive
substantially all of their revenues from the above activities.
Columbia seeks authority for the Consumer Services Company to provide
financing to, or broker nonassociate third-party financing for, customers in
connection with all of its authorized consumer services. Financing would also
be available for purchases by the System's utility customers of energy-related
equipment from a nonassociated third party. Customer financing may take the
form of, among other things, direct loans, leases, installment purchase
arrangements and loan guarantees. Interest on loans and imputed interest on
lease payments will be secured or unsecured. Any obligations acquired from
customers may be assigned to banks, leasing companies or other financial
institutions, with or without recourse.
In its order dated December 23, 1996 (File No. 70-8925; Holding Co.
Act Release No. 26634), the Commission reserved jurisdiction over participation
in Columbia's Money Pool by new direct or indirect subsidiaries of Columbia
engaged in new lines of business. Columbia hereby requests that the Commission
release this jurisdiction with respect to participation in the Money Pool by
those direct and indirect subsidiaries that are formed pursuant to the specific
authorization sought herein.
Columbia represents that it will not seek recovery through higher
rates to customers of the System's public utility company subsidiaries to
compensate it for any losses the Consumer Services Company may sustain, or
inadequate returns the Consumer Services Company may realize, resulting from
the proposed consumer services.
It is contemplated that the Columbia local distribution companies will
continue to assist the Consumer Services Company with customer billing,
accounting and other energy-related services for consumer services offered to
the System's utility customers. The use of such personnel by the Consumer
Services Company will not impair the System's utility service. If, at any
time, the utility staff levels are not adequate to handle these extra
responsibilities, staff will be added to the Consumer Services Company to meet
the increased demand. All services between the System utilities and the
Consumer Services Company will be billed at cost in accordance with Section
13(b) of the Act and Rules 87, 90 and 91 thereunder. To the extent permitted
by law, the Consumer Services Companies, including Service Partners, may
compete with other companies in the Columbia System.
The joint application-declaration and any amendments thereto are
available for public inspection through the commission's Office of Public
Reference. Interested persons wishing to
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comment or request a hearing should submit their views in writing by ,
to the Secretary, Securities and Exchange Commission, Washington, D.C. 20549,
and serve a copy on the applicants-declarants at the address specified above.
Proof of service (by affidavit or, in case of an attorney-at-law, by
certificate) should be filed with the request. Any request for a 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 this matter. After said date, the joint
application-declaration, as filed or as it may be amended, may be permitted to
become effective.
For the Commission, by the Division of Investment Management, pursuant
to delegated authority.
Jonathan G. Katz
Secretary
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