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File No. 70-_____
U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM U-1
JOINT APPLICATION-DECLARATION
UNDER
THE PUBLIC UTILITY HOLDING COMPANY ACT OF 1935
THE COLUMBIA GAS SYSTEM, INC.
COLUMBIA GAS SYSTEM SERVICE CORPORATION
COLUMBIA LNG CORPORATION
COLUMBIA ATLANTIC TRADING CORPORATION
12355 Sunrise Valley Drive
Suite 300
Reston, VA 20191-3458
TRISTAR VENTURES CORPORATION
TRISTAR CAPITAL CORPORATION
TRISTAR PEDRICK LIMITED CORPORATION
TRISTAR PEDRICK GENERAL CORPORATION
TRISTAR BINGHAMTON LIMITED CORPORATION
TRISTAR BINGHAMTON GENERAL CORPORATION
TRISTAR VINELAND LIMITED CORPORATION
TRISTAR VINELAND GENERAL CORPORATION
TRISTAR RUMFORD LIMITED CORPORATION
TRISTAR GEORGETOWN GENERAL CORPORATION
TRISTAR GEORGETOWN LIMITED CORPORATION
TRISTAR FUEL CELLS CORPORATION
TVC NINE CORPORATION
TVC TEN CORPORATION
TRISTAR SYSTEM, INC.
205 Van Buren
Herndon, VA 22070
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COLUMBIA NATURAL RESOURCES, INC
ALAMCO, INC.
ALAMCO-DELAWARE, INC.
HAWG HAULING & DISPOSAL, INC.
900 Pennsylvania Avenue
Charleston, WV 25302
COLUMBIA ENERGY SERVICES CORPORATION
COLUMBIA ASSURANCE AGENCY, INC.
COLUMBIA ENERGY MARKETING CORPORATION
COLUMBIA POWER MARKETING CORPORATION
COLUMBIA SERVICE PARTNERS, INC.
12355 Sunrise Valley Drive
Suite 300
Reston, VA 20191-3458
COLUMBIA GAS TRANSMISSION CORPORATION
12801 Fair Lakes Parkway
Fairfax, VA 22030-0146
COLUMBIA NETWORK SERVICES CORPORATION
CNS MICROWAVE, INC.
1600 Dublin Road
Columbus, OH 43215-1082
COLUMBIA GULF TRANSMISSION COMPANY
2603 Augusta, Suite 125
Houston, TX 77057
COLUMBIA PROPANE CORPORATION
9200 Arboretum Parkway, Ste 140
Richmond, VA 23236
COLUMBIA GAS OF KENTUCKY, INC.
COLUMBIA GAS OF OHIO, INC.
COLUMBIA GAS OF MARYLAND, INC.
COLUMBIA GAS OF PENNSYLVANIA, INC.
COMMONWEALTH GAS SERVICES, INC.
200 Civic Center Drive
Columbus, OH 43215
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COLUMBIA INSURANCE CORPORATION, LTD.
Craig Appin House
8 Wesley Street
Hamilton HM EX, Bermuda
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(Names of company or companies filing this statement
and addresses of principal executive offices)
THE COLUMBIA GAS SYSTEM, INC.
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(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
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(Name and address of agent for service)
Names and Addresses of Subsidiary Company Agents for Service:
M. A. CHANDLER, Treasurer
Columbia Natural Resources, Inc.
Alamco, Inc.
Alamco-Delaware, Inc.
Hawg Hauling & Disposal, Inc.
900 Pennsylvania Avenue
Charleston, WV 25302
S. T. MACQUEEN, Treasurer
Columbia LNG Corporation
12355 Sunrise Valley Drive
Suite 300
Reston, VA 20191-3458
J. W. TROST, Vice President
Columbia Gas System Service Corporation
12355 Sunrise Valley Drive, Suite 300
Reston, VA 20191-3420
D. P. DETAR, Treasurer
TriStar Ventures Corporation
TriStar Pedrick Limited Corporation
TriStar Pedrick General Corporation
TriStar Binghamton Limited Corporation
TriStar Binghamton General Corporation
TriStar Vineland Limited Corporation
TriStar Vineland General Corporation
TriStar Rumford Limited Corporation
TriStar Georgetown Limited Corporation
TriStar Georgetown General Corporation
TriStar Fuel Cells Corporation
TVC Nine Corporation
TVC Ten Corporation
TriStar System, Inc.
205 Van Buren
Herndon, VA 22070
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J. W. GROSSMAN, Treasurer
TriStar Capital Corporation
Columbia Atlantic Trading Corporation
12355 Sunrise Valley Drive
Suite 300
Reston, VA 20191-3458
S. M. NORDIN, Treasurer
Columbia Propane Corporation
9200 Arboretum Parkway, Ste 140
Richmond, VA 23236
A. J. SONDERMAN, Corporate Secretary
Columbia Gas of Ohio, Inc.
Columbia Gas of Kentucky, Inc.
Commonwealth Gas Services, Inc.
Columbia Gas of Pennsylvania, Inc.
Columbia Gas of Maryland, Inc.
200 Civic Center Drive
Columbus, OH 43215
G. A. BARNARD, Assistant Controller
Columbia Gas Transmission Corporation
Columbia Gulf Transmission Corporation
1700 MacCorkle Avenue, S.E.
Charleston, WV 25314
D. FURLANO, Treasurer
Columbia Network Services Corporation
CNS Microwave, Inc.
1600 Dublin Road
Columbus, OH 43215-1082
R. S. GUSTAFSON, Controller
Columbia Energy Services Corporation
Columbia Energy Marketing Corporation
Columbia Power Marketing Company
Columbia Service Partners, Inc.
Columbia Assurance Agency, Inc.
121 Hill Pointe Drive
Suite 100
Canonsburg, PA 15317
T. S. BINDRA, Vice President and
Assistant Secretary
Columbia Insurance Corporation, Ltd.
12355 Sunrise Valley Drive
Suite 300
Reston, VA 20191-3458
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(Names and Addresses of Other Agents for Service)
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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, as amended
(the "1935 Act" or "Act"), and its subsidiary companies are requesting
Commission approval to update and expand their existing authority in ways that
will enable them to compete more effectively in today's challenging environment.
Briefly stated, Columbia and its subsidiary companies (collectively, the
"System") are seeking:
1) Authorization of certain activities by order for purposes of
exemption under Rule 16;
2) Authorization for the System's nonutility subsidiaries to
amend their certificates of incorporation to change the par
value of equity securities held by Columbia or by an
intermediate Columbia subsidiary, and to declare and pay
dividends of capital thus created or otherwise existing, to
the extent permitted by state law.
3) Authorization to form and capitalize a new wholly-owned
subsidiary company, or designate an existing subsidiary
company, to hold intellectual property rights, including
rights to a new System service mark and logo.
The proposed changes are intended to enable Columbia to better serve customers,
and ultimately investors, as the industry continues through a period of
unprecedented change.
Rule 16 Exemptions
Under Rule 58, Columbia can acquire the securities of an entity engaged
in the exploration, development, production, manufacture, storage,
transportation or supply of natural gas without the need to apply for or receive
prior Commission approval as such entity would be a gas-related company within
the meaning thereof. If Columbia acquires 10% or more of the outstanding voting
securities of an entity engaged in such activities, however, that entity will
become a statutory subsidiary of a registered holding company. Furthermore, if
Columbia acquires 5% or more of the outstanding voting securities of an
entity engaged in such activities, that entity will become a statutory
affiliate of a registered holding company. Rule 16 under the
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Act provides an exemption for such an entity, and each affiliate thereof, from
the obligations, duties or liabilities imposed upon it by the Act as a
subsidiary company or as an affiliate of a registered holding company or of a
subsidiary company thereof, if certain conditions are satisfied:
(1) Such company is not a public utility company as defined in
Section 2(a)(5) of the Act;
(2) Such company is or has been organized to engage primarily in
the exploration, development, production, manufacture,
storage, transportation or supply of natural or synthetic gas;
(3) No more than 50 percent of its voting securities or other
voting interests are owned, directly or indirectly, by one or
more registered holding companies; and
(4) The acquisition by the registered holding company or
subsidiary thereof of its interest in such company has been
approved by the Commission pursuant to Sections 9(a)(1) and 10
of the Act and applicable rules thereunder upon a timely
application to the Commission.
Prior to adoption of Rule 16, registered holding companies were often viewed as
unattractive joint venture partners as any entity created by the joint venture
would be potentially subject to reporting and other restrictions under the Act.
Rule 16 was promulgated specifically to "eliminate an impediment to
participation by gas utility systems of registered holding companies in joint
ventures or projects with others not subject to the Act for the purpose of
providing non-utility facilities necessary or appropriate to the business of
the registered holding company, by exempting the joint venture or project
company . . . from the regulatory provisions of the Act,"1 thereby providing
the necessary comfort for other joint venture participants.
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1. Rule to Exempt Certain Non-Utility Subsidiaries and Affiliates under
the Public Utility Holding Company Act of 1935, Holding Company Act
Release No. 21797 (Nov. 19, 1980).
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An anomalous situation results, however, when a registered holding
company acquires the securities of a Rule 16-eligible company in reliance on
Rule 58.2 Because the acquisition of the securities of gas-related companies is
exempt under Rule 58, no Commission order is necessary. As a result, a company
acquired pursuant to Rule 58 may not currently claim the benefit of the
exemption under Rule 16 from the obligations, duties or liabilities imposed upon
it by the Act as a subsidiary company or as an affiliate of a registered holding
company or of a subsidiary company thereof.
To address this problem, Columbia asks the Commission to grant it
authority under Sections 9(a)(1) and 10 of the Act to acquire the securities of,
or an interest in, one or more entities that are organized to engage primarily
in the exploration, development, production, manufacture, storage,
transportation or supply of natural or synthetic gas within the United States,
so that the requirements of Rule 16 may be satisfied with respect to such
entities. It should be noted that the Commission indicated in the Rule 58
adopting release that it favors, and is considering, an amendment to Rule 16 to
eliminate the requirement for an order precisely for this reason. See also
National Fuel Gas Company, Holding Co. Act Release No. 26683 (March 11, 1997)
(noting applicability of Rule 16 where Rule 58-exempt activity authorized by
order).
Dividend Authorization
Columbia seeks authority for the System's nonutility subsidiaries to
amend their certificates of incorporation to change the par value of equity
securities held by Columbia or an intermediate company, and further authorize
the nonutility subsidiaries to issue dividends out of capital thus created or
otherwise existing, to the extent permitted by state law. The Commission
previously authorized Columbia Gas of Maryland, Inc. and certain nonutility
subsidiaries to reduce the number of authorized shares and to pay dividends out
of the capital surplus thus created. Columbia Gas System, Inc., Holding Co. Act
Release No. 26634 (Dec. 23, 1996); see also Holding Co. Act Release No. 26209
(Dec. 29, 1994) (authorizing subsidiaries of TriStar Ventures to pay dividends
out of capital surplus). The Commission has previously approved the payment of
dividends out of capital surplus by nonutility subsidiaries of registered
holding companies in circumstances in which such payments would not impair the
subsidiary's ability to meet its obligations, and the subsidiary's assets would
be sufficient to meet its anticipated expenses and liabilities. See Central Ohio
Coal Co., Holding Co. Act
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2. A company that "is or has been organized to engage primarily in the
exploration, development, production, manufacture, storage, transportation or
supply of natural or synthetic gas" would qualify as a gas-related company
for purposes of Rule 58.
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Release No. 26573 (Sept. 16, 1996), citing Columbus Southern Power Co., Holding
Co. Act Release No. 26152 (Oct. 28, 1994), Columbia Alaskan Gas Transmission
Corp., Holding Co. Act Release No. 23893 (Nov. 5, 1985). More recently, the
Commission has broadly authorized such payments by project parents and holding
companies over QFs, EWGs, FUCOs and other energy related companies. See The
Southern Company, Holding Company Act Release No. 26738 (July 2, 1997)
(releasing jurisdiction over authority for existing and future subsidiaries of
nonutility holding company, including energy-related companies, to pay dividends
out of capital or unearned surplus to extent permitted under applicable state
law); Cinergy Corp., Holding Co. Act Release No. 26719 (May 22, 1997)
(nonutility subsidiary holding company, and existing and future exempt project
parent companies authorized to pay dividends out of capital surplus to extent
permitted under state law); and Northeast Utilities, Holding Co. Act Release No.
26691 (March 25, 1997).
Situations may arise in which one or more of Columbia's nonutility
subsidiaries will have unrestricted cash available for distribution in excess of
current and retained earnings. In such situations, payment of a dividend would
have to be charged, in whole or in part, to capital or unearned surplus. Absent
Commission authorization to pay dividends out of capital or unearned surplus,
the cash would be trapped at a subsidiary level where there is no need for it.
The ability to pay dividends to Columbia in these situations will benefit the
System because Columbia will be able to use the dividends to reduce outstanding
external financings and/or to fund other subsidiary operations.
Intellectual Property
Columbia seeks authority for a newly-formed or existing subsidiary to
own certain intellectual property rights, including the rights to any new
service mark or corporate name. Columbia further requests authority as may be
required to license such rights to System companies in accordance with Section
13 of the Act, rules and Commission orders thereunder.
* * * * *
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
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Commission order, in accordance with the terms and conditions of, and for the
purposes as authorized by the relevant orders.
(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.
Not applicable.
(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.
Legal Fees in connection with the Preparation
of the Application-Declaration $8,000.00
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(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.
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Columbia Gas System Service Corporation has rendered legal services at
cost in connection with the Joint Application-Declaration.
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, 13 and 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.
Virginia and Pennsylvania have jurisdiction over any contract or
arrangement between Commonwealth Gas Services, Inc. and Columbia Gas of
Pennsylvania, respectively, and an affiliated company.
(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.
Copies of relevant filings with and orders obtained from any state
commission will be provided to this Commission.
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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 10,
1997 and its order on or before December 11, 1997.
(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.
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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.
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: October 31, 1997 by: //s//M. W. O'Donnell
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M. W. O'Donnell, Senior Vice President
& Chief Financial Officer
COLUMBIA INSURANCE CORPORATION, LTD.
DATE: October 31, 1997 by: //s//N. A. Parillo
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N. A. Parillo, President
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COLUMBIA NATURAL RESOURCES, INC.
ALAMCO, INC.
ALAMCO-DELAWARE, INC.
HAWG HAULING & DISPOSAL, INC.
DATE: October 31, 1997 by: //s//M. A. Chandler
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M. A. Chandler, Chief Financial Officer & Treasurer
COLUMBIA GAS OF OHIO, INC.
COLUMBIA GAS OF KENTUCKY, INC.
COLUMBIA GAS OF MARYLAND, INC.
COLUMBIA GAS OF PENNSYLVANIA, INC.
COMMONWEALTH GAS SERVICES, INC.
COLUMBIA NETWORK SERVICES CORPORATION
CNS MICROWAVE, INC.
COLUMBIA GULF TRANSMISSION COMPANY
COLUMBIA GAS TRANSMISSION CORPORATION
COLUMBIA PROPANE CORPORATION
COLUMBIA GAS SYSTEM SERVICE CORPORATION
COLUMBIA LNG CORPORATION
COLUMBIA ATLANTIC TRADING CORPORATION
COLUMBIA ENERGY SERVICES CORPORATION
COLUMBIA ASSURANCE AGENCY, INC.
COLUMBIA ENERGY MARKETING CORPORATION
COLUMBIA POWER MARKETING CORPORATION
COLUMBIA SERVICE PARTNERS, INC.
TRISTAR CAPITAL CORPORATION
TRISTAR VENTURES CORPORATION
TRISTAR PEDRICK LIMITED CORPORATION
TRISTAR PEDRICK GENERAL CORPORATION
TRISTAR BINGHAMTON LIMITED CORPORATION
TRISTAR BINGHAMTON GENERAL CORPORATION
TRISTAR VINELAND LIMITED CORPORATION
TRISTAR VINELAND GENERAL CORPORATION
TRISTAR RUMFORD LIMITED CORPORATION
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TRISTAR GEORGETOWN GENERAL CORPORATION
TRISTAR GEORGETOWN LIMITED CORPORATION
TRISTAR FUEL CELLS CORPORATION
TVC NINE CORPORATION
TVC TEN CORPORATION
TRISTAR SYSTEM, INC.
DATE: October 31, 1997 by: //s//J. W. Trost
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J. W. Trost, Vice President
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EXHIBIT G
SECURITIES AND EXCHANGE COMMISSION
(Release No. )
October __, 1997
The Columbia Gas System, Inc. ("Columbia"), 12355 Sunrise Valley Drive,
Suite 300, Reston, VA 20191-3458, 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, as amended (the "1935 Act"
or Act"), and its subsidiary companies are requesting Commission approval to
update and expand their existing authority with respect to certain nonutility
activities and system organization that will to enable them to compete
effectively in today's challenging environment. Briefly stated, Columbia and its
subsidiary companies (collectively, "the System") are seeking expansion and
clarification of the System's authority, consistent with Commission precedent.
Specifically, Columbia asks the Commission to authorize by order certain
activities for purposes of exemption under Rule 16; authorize the System's
nonutility subsidiaries to amend their certificates of incorporation to change
the par value of equity securities held by Columbia or by an intermediate
Columbia subsidiary, and to declare and pay dividends of capital thus created or
otherwise existing, to the extent permitted by state law; and to authorize
Columbia to form and capitalize a new wholly-owned subsidiary company, or to
designate an existing subsidiary company, to hold intellectual property rights,
including rights to a new System logo or service mark. The proposed changes are
intended to enable Columbia to better serve customers, and ultimately investors,
as the industry continues through a period of unprecedented change.
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 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.
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For the Commission, by the Division of Investment Management, pursuant
to delegated authority.
Jonathan G. Katz
Secretary
