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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
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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
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(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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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 propose 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;
4) Appliance Repair Warranty -- Customers may be offered an
appliance repair service for their heating and air conditioning systems
and other major appliances;
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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
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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 addition 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 GNG 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 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 with 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.
* * * * * *
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.
(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.
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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 4, 1997,
and its order on or before December 4, 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: October 22, 1997 by: /s/ M. W. O'Donnell
-----------------------------------
M. W. O'Donnell, Senior Vice President
& Chief Financial Officer
COLUMBIA SERVICE PARTNERS, INC.
DATE: October 22, 1997 by: /s/ P. Feldman
-----------------------------------
P. Feldman, President
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EXHIBIT G
SECURITIES AND EXCHANGE COMMISSION
(Release No. )
October__, 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 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. 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 business of energy management and
demand-side management, often on a turn-
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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.
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
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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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