<PAGE> 1
File No. 70-
----
U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
----------------------------------------------------
FORM U-1
APPLICATION-DECLARATION
UNDER
THE PUBLIC UTILITY HOLDING COMPANY ACT OF 1935
----------------------------------------------------
THE COLUMBIA GAS SYSTEM, INC.
12355 Sunrise Valley Drive
Suite 300
Reston, VA 20191-3458
----------------------------------------------------
(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)
<PAGE> 2
Page 1
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.
Introduction
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"),
is seeking authority, consistent with Commission precedent, to provide
consulting services to associate and nonassociate companies and to engage in
activities contemplated by the Gas Related Activities Act of 1990 ("GRAA"), on
an international basis. It is contemplated that Columbia would engage in these
activities through one or more of its existing nonutility subsidiaries or
through one or more newly-formed subsidiaries (collectively, the "Foreign Energy
Subsidiary"). The Foreign Energy Subsidiary, in turn, may form one or more
special-purpose subsidiaries to invest, directly or indirectly, in entities such
as corporations, limited liability companies, partnerships or other entities
that derive substantially all of their revenues from foreign consulting or
gas-related activities under the GRAA.
Such activities would be funded through a combination of short-term and
long-term, open account advances and other financing transactions as may be
authorized by Rules 45 and 52 and other applicable rules, regulations and orders
under the Act.
The Commission is requested to authorize Columbia to designate or
establish the Foreign Energy Subsidiary and to authorize the initial funding of
the foreign consulting and foreign gas-related activities, as may be required.
Columbia also seeks authority to engage currently in preliminary development
activities in connection with foreign gas-related projects, but asks the
Commission to reserve jurisdiction over the acquisition of a security or an
interest in the business of a nonaffiliated entity engaged in such activities,
pending completion of the record.
<PAGE> 3
Page 2
1. FOREIGN CONSULTING
Columbia seeks authority for the Foreign Subsidiary to provide consulting
services, including but not limited to project development, engineering, design,
construction and construction management, storage, gas control, geologic, fuel
management, operating and maintenance services and other similar kinds of
managerial and technical services to associate and nonassociate companies in
connection with foreign utility and gas-related activities. See Southern Co.,
Holding Co. Act Release No. 26212 (Dec. 30, 1994). See also Consolidated Natural
Gas Co., Post-effective Amendment No. 6 in File No. 70-8759 (requesting release
of jurisdiction over foreign consulting activities). The Foreign Subsidiary may
render such services using its own work force, independent contractors, and
personnel and other resources of the Columbia system as permitted by Section 13
and the rules thereunder.(1) It is also contemplated that, in conjunction with
providing services to nonassociates, the Foreign Subsidiary may enter into
separate agreements to sell or license intellectual property it has created or
acquired from nonassociate companies in connection with its authorized business.
The Foreign Subsidiary will not undertake any service activities if, as a
result thereof, it would become a public utility company within the meaning of
the Act. Columbia's utility subsidiaries will not seek recovery through higher
rates to its customers to compensate the Columbia system for any possible loss
it may sustain by reason of the proposed consulting or gas related activities.
2. FOREIGN GAS-RELATED ACTIVITIES
In view of the increasingly global nature of the energy business, it is
both necessary and appropriate for Columbia or its subsidiaries on a world-wide
basis to apply the expertise that they have gained in their domestic activities.
Accordingly, Columbia seeks authority for the Foreign Subsidiary to engage in
activities contemplated by the GRAA internationally. To the extent, these
activities involve the transportation or storage of natural gas within the
meaning of Section 2(a) of the GRAA, or are otherwise related to the supply of
natural gas, including exploration, development, production, marketing,
manufacture, or other similar
- ----------
(1) Columbia requests authority, pursuant to Rule 53(a)(3), for the Foreign
Subsidiary to contract with Columbia's domestic public-utility subsidiary
companies to provide services to foreign utility companies or foreign exempt
wholesale generators in which Columbia may hereafter, directly or indirectly,
hold an interest. Columbia represents that no more than two percent of the
employees of the domestic public-utility companies will render services, at any
one time, to such foreign utility companies or foreign exempt wholesale
generators.
<PAGE> 4
Page 3
activities within the meaning of Section 2(b) of the GRAA (to the extent they
have been previously approved by the Commission), they would be exempted by
Rule 58 if they were conducted within the United States.(2)
The Commission, however, has determined that the GRAA is not limited to
activities within the United States, and has authorized investments in foreign
gas-related projects on a case-by-case basis. See Consolidated Natural Gas
Co., Holding Co. Act Release No. 26253 (May 30, 1996), Holding Co. Act Release
No. 26595 (Oct. 25, 1996) and Holding Co. Act Release No. 26608 (Nov. 19, 1996)
(collectively, the "CNG International Orders"). Accordingly, consistent with
the CNG International Orders, Columbia is asking the Commission to reserve
jurisdiction over its request to engage in foreign gas-related activities,
pending completion of the record with respect to specific projects.
3. Money Pool
In its order dated December 23, 1996 (File No. 70-8925; Holding Company
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
lift this reservation with respect to participation in the Money Pool by those
direct and indirect subsidiaries that are formed pursuant to the specific
authorization sought herein.
* * * * *
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 led to a number of lapsed orders in the past,
necessitating the filing of post-effective amendments and the issuance of
supplemental orders. To avoid these problems in the future, Columbia hereby
designates a period from the date of the order in this matter to December 31,
2002 as the period in which it will carry out transactions authorized in this
order.
* * * * *
- ---------------------
2. To the extent that certain Section 2(b) activities have not been previously
approved by the Commission, Columbia will file a post-effective amendment
seeking such further approval as may be necessary.
<PAGE> 5
Page 4
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. Copies of this application
and all amendments thereto will be submitted to each of the state regulators
having retail rate jurisdiction over companies in the Columbia system. In
addition, Columbia will submit to each commission a copy of any Rule 24
certificate required hereunder, as well as a copy of Item 9 of Consolidated's
Form U5S, including Exhibits G and H thereof. 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.
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.
<TABLE>
<S> <C>
Legal Fees .................................................... $ 7,500
--------
</TABLE>
<PAGE> 6
Page 5
<TABLE>
<S> <C>
Total ..................................................... $ 7,500
========
</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.
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.
The proposed transactions are jurisdictional under Sections 6, 7, 9, 10 and
13 of the Act and rules thereunder, Rule 54, and the Gas Related Activities Act
of 1990.
(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 any applicant or declarant, or is an affiliate of an associate
company, set forth the facts with respect thereto.
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. Columbia has
complied with the requirements of Rule 54, by reference to Rule 53(a)(4), by
submitting a copy of this Application-Declaration to the public utility
commissions in Kentucky, Maryland, Ohio, Pennsylvania and Virginia.
(b) Describe the action taken or proposed to be taken before any commission
named in answer to paragraph (1) of this item in connection with the proposed
transaction.
<PAGE> 7
Page 6
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 October 30,
1997 and its order on or before November 30, 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.
<PAGE> 8
Page 7
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 14, 1997 BY: /s/ M. W. O'Donnell
-----------------------------
M. W. O'Donnell,
Senior Vice President
& Chief Financial Officer
<PAGE> 9
Page 8
EXHIBIT G
SECURITIES AND EXCHANGE COMMISSION
(Release No. )
October , 1997
The Columbia Gas System, Inc. ("Columbia"), 12355 Sunrise Valley Drive,
Suite 300, Reston, Virginia, a Delaware corporation and a registered holding
company under the Act, has filed an application-declaration under sections 6,
7, 9, 10 and 13 of the Act and Rule 54 promulgated thereunder and the Gas
Related Activity Act of 1990.
Columbia requests authorization to provide consulting services, such as
project development, engineering, design, construction and construction
management, storage, gas control, geologic, fuel management, operating and
maintenance services and other related services, to associate and nonassociate
companies and to engage in activities contemplated by the Gas Related
Activities Act of 1990 (the "GRAA"), in each case on an international basis,
through one or more existing non-utility subsidiaries or through newly-formed
subsidiaries (collectively, "Foreign Energy Subsidiary"). Such Foreign Energy
Subsidiary may, in turn, form special purpose subsidiaries to invest in
entities such as corporations, limited liability partnerships or other entities
that derive substantially all of their revenues from foreign consulting or
gas-related activities under the GRAA. Columbia requests that the Commission
authorize it to form the Foreign Energy Subsidiary and to fund the initial
foreign consulting and foreign gas-related activities as required. Columbia
also requests authorization to engage in preliminary development activities in
connection with foreign gas-related projects, but asks that the Commission
reserve jurisdiction over the acquisition of a security or interest in the
business of a nonaffiliated entity engaged in such activities, pending
completion of the record.
The Foreign Subsidiary will not undertake any service activities if, as
a result thereof, it would become a public utility company within the meaning
of the Act. Columbia's utility subsidiaries will not seek recovery through
higher rates to its customers to compensate the Columbia system for any
possible loss it may sustain by reason of the proposed consulting or gas
related activities.
The 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
<PAGE> 10
Page 9
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
