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File Number 70-8577
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
POST-EFFECTIVE AMENDMENT NO. 1
TO
FORM U-1
APPLICATION-DECLARATION UNDER THE
PUBLIC UTILITY HOLDING COMPANY ACT OF 1935
By
CONSOLIDATED NATURAL GAS COMPANY
CNG Tower
625 Liberty Avenue
Pittsburgh, Pennsylvania 15222-3199
(a registered holding company and
the parent of the other party)
CNG PRODUCTS AND SERVICES, INC.
625 Liberty Avenue
Pittsburgh, Pennsylvania 15222-03199
Names and addresses of agents for service:
R. E. Wright, President
CNG Products and Services, Inc.
CNG Tower
625 Liberty Avenue
Pittsburgh, Pennsylvania 15222-3199
J. M. Hostetler, Attorney
Consolidated Natural Gas Service Company, Inc.
CNG Tower
625 Liberty Avenue
Pittsburgh, Pennsylvania 15222-3199
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File Number 70-8577
SECURITIES AND EXCHANGE COMMISSION
Washington, DC. 20549
POST-EFFECTIVE AMENDMENT NO. 1 TO
APPLICATION-DECLARATION UNDER THE PUBLIC UTILITY
HOLDING COMPANY ACT OF 1935
Item 1. Description of Proposed Transaction
INTRODUCTION
Consolidated Natural Gas Company ("Consolidated") is a Delaware
corporation and a public utility holding company registered under the
Public Utility Holding Company Act of 1935 ("Act"). It is engaged solely
in the business of owning and holding all of the outstanding securities,
with the exception of certain minor long-term debt, of seventeen
subsidiaries. The subsidiary companies are primarily engaged in natural
gas exploration, production, purchasing, gathering, transmission, storage,
distribution, byproduct operation, energy services and other related
activities.
CNG Products and Services, Inc. ("Products and Services"),
incorporated in 1995, is a wholly-owned non-utility subsidiary of
Consolidated. It provides energy-related, customer-convenience services
("Customer Services") to customers of the local distribution companies
("LDCs") in the Consolidated System (1) and to others, primarily customers
of non-affiliated utilities. The Customer Services, approved by Commission
Order on August 28, 1995, HCAR No. 26363 ("August 28 Order"), are closely
related to energy services already being provided to such customers.
____________________
(1) The "Consolidated System" is Consolidated and its 17 wholly-owned
subsidiaries which, in addition to an energy marketing subsidiary, CNG
Energy Services Corporation, includes five local distribution companies and
an interstate pipeline subsidiary, CNG Transmission Corporation. The five
local distribution companies of the Consolidated System ("Consolidated
LDCs") are: (1) The East Ohio Gas Company, serving 1,081,000 customers
primarily in northeastern Ohio; (2) The Peoples Natural Gas Company,
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The August 28 Order approved the following categories of Customer
Services:
(1) Service Line Maintenance Program
(2) Appliance Guard (extended service warranty)
(3) Payment Power (bill payment protection)
(4) Routine Furnace Services
(5) One-Package Appliance Inspection and Replacement
(6) Community Bill Payment Center
(7) Energy Audits and Services
(8) Propane Service
(9) Gas Fired Electric Generators
(10) Pipeline Maintenance, Construction, and Managerial Support
Services for others
However, the Commission authorization extended only to these ten specific
categories of Customer Services (2).
____________________
serving 332,000 customers in southwestern Pennsylvania; (3) Virginia
Natural Gas, Inc., serving 184,000 customers in southeastern Virginia; (4)
Hope Gas, Inc., serving 111,000 customers in central and northern West
Virginia; and (5) West Ohio Gas Company, serving 60,000 customers in a
region in western Ohio centered around Lima.
(2) The following is a more detailed description of the Customer Services
listed above: (1) Service Line Maintenance Program. Products and Services
pays for repair of service lines -- owned by and on customer's property --
in exchange for a nominal monthly fee. This is similar to service offered
by telephone companies to repair telephone lines inside the house --
without any additional charge above the nominal monthly fee. (2) Appliance
Guard. Products and Services would provide customers with an extended
service warranty that would cover the cost of repairing appliances owned by
the customer. It would include (but not be limited to) gas grills,
furnaces and air conditioning units, and commercial and residential ranges.
(3) Payment Power. Products and Services, through contractual arrangement
with American Banker's Insurance Group, would provide bill payment
protection for customers up to $400 a month for six months -- should the
customer become unemployed, disabled, or die. (4) Routine Furnace Services.
Products and Services would act as an intermediary for customers to arrange
routine inspections or repairs of furnaces. (5) One Package Appliance
Inspection and Replacement. This would be a "premium service" offered by
Products and Services to "add value" for the customer. it goes beyond the
Routine Furnace Services plan mentioned above, by
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PROPOSALS
Applicants now propose the following additional categories to
Customer Services: Energy-Related Equipment, Safety Inspection/Electronic
Measurement Services, Marketing Services, and Risk Management Products.
____________________
offering annual inspection, maintenance service, or even replacement of any
appliance. Also, Products and Services may offer customers the option to
rent, rent-to-own, or purchase appliances like hot water heaters and
furnaces. (6) Community Bill Payment Center. Products and Services would
provide a centralized bill payment center where customers can -- with "one-
stop" -pay their gas, electric, water, telephone, cable and other utility
or municipal bills. The potential for such centers will depend on the
local community (overall interest and feasibility). Local utilities and
municipalities may be able to reduce costs by merging existing bill payment
locations into the community bill payment center. (7) Energy Audits and
Services. Products and Services would arrange energy audits for
institutional and commercial customers, and then offer the customer a turn-
key service package, including bank or other third party financing, to
implement energy-saving recommendations resulting from the audit. (8)
Propane Service. Products and Services would arrange for this service in
areas where, at the present time, it is not economical for LDCs to extend
natural gas service via underground pipeline. (9) Gas Fired Electric
Generators. Products and Services would arrange for the installation of
temporary or permanent gas-fired turbines, for the on-site generation and
consumption of electrical energy. (10) Pipeline Maintenance. Construction
and Managerial Support Services For Others. For pipeline maintenance,
Products and Services would manage all Department of Transportation ("DOT")
required maintenance on pipelines owned by other utilities. For pipeline
construction, Products and Services would arrange for and manage the
construction of pipelines to be owned by other utilities. For managerial
support services, which are intended for small, non-affiliated utilities,
Products and Services would offer (1) consultant services to solve
financial or operational difficulties, (2) managerial services for one or
more day-to-day operations, and (3) training services for the employees of
small utilities to meet new standards in the industry or comply with
government regulations. The services would be tailored to meet the
particular needs.
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Energy-Related Equipment. Products and Services would sell and
install energy-related appliances and products of all types (collectively,
referred to as "Energy-Related Equipment). Examples are (but not limited
to) furnaces, air conditioning, hot water heaters, heat pumps, gas grills,
gas lights and logs,(3) natural gas vehicle ("NGV") conversion equipment
(to convert a vehicle to "dual-fuel" capability) and the NGV refueling
equipment necessary to allow customers to refuel their NGVs at home.(4)
Products and Services would also sell products that enhance safety,
increase energy efficiency, or provide energy-related information.
Examples of safety devices are (but not limited to) home security systems
which include carbon monoxide/smoke and fire detectors, and fire
extinguishers. Energy consumption monitoring devices, including software
programs, may be offered, along with "demand side management" devices to
increase energy efficiency or reduce energy consumption.
The August 28 Order authorized Products and Services to arrange
third-party financing for customers in connection with the Customer
Services authorized in the August 28 Order. Products and Services proposes
to expand this authorization to allow third party financing for the
additional Customer Services contemplated in this Post-Effective Amendment.
_____________________
(3) This line of business was previously approved in the August 28 Order
(see footnote 2 above where Applicants were authorized to sell furnaces and
other appliances as part of its "One-Package Appliance Inspection and
Replacement" program.), PSI Energy, Inc. HCAR No. 26412 (November 21,
1995), and Columbia Gas System, Inc. HCAR No. 26498 (March 25, 1996).
Applicants propose to expand this line of business in keeping with the
March 25, 1996 Columbia order.
(4) By order dated April 22, 1996 (HCAR No. 26509), Consolidated was
authorized to restructure certain companies in the CNG system. As part of
this restructuring, Products and Services acquired from CNG Power Company
the latter's NGV Division and CNG Technologies, Inc. Also, by order dated
February 23, 1995 (HCAR No. 26234), CNG Financial Services, Inc., a wholly-
owned, nonutility subsidiary, was authorized to finance the purchase of
standard appliances, new technology equipment and alternate fuel equipment.
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Although Applicants expect that third-party financing will continue
to be the preferred financial offering, Products and Services proposes to
offer financing to customers by (1) making short-term loans to cover the
period of installation of the energy-related appliances until permanent
financing can be obtained by the customer or (2) making long-term loans for
a period of time not to exceed the lesser of 10 years or the expected
useful life of the equipment. The aggregate amount of energy-related
appliance equipment financing loans by Products and Services outstanding at
any one time will not exceed $50,000,000, with an individual customer
financing limit of $5,000,000 at any one time. This type of activity was
previously approved by the Commission in Consolidated Natural Gas Company,
HCAR No. 26234 (February 23, 1995) (approving financing of gas utilizing
equipment for customers of the affiliated LDCs and gas marketing companies
of the CNG system) and Columbia Gas Systems, Inc., HCAR No. 26498.
Products and Services also may make available to third-party
contractors who independently sell and/or install Energy-Related Equipment
certain options to offer their customers assistance in financing the
purchase (including installation) of Energy-Related Equipment. Such
financing options may be in the form of third-party financing or through
Products and Services' financing offering consistent with the terms
authorized herein.
Safety Inspection/Repair and Electronic Measurement Services.
Products and Services would offer a safety inspection/repair service to
check for carbon monoxide, faulty equipment/wiring, among other things.
Repair services may also be offered to correct any problems discovered by
the inspection. As to electronic measurement services, Products and
Services would offer residential, commercial and industrial customers a
variety of enhanced measurement and billing services that enable the
customer to better estimate
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and control energy expenditures. Examples are (but not limited to)
enabling consumers using their phone or computer to find out what their gas
or energy bill is at any point during the month, or with a large commercial
consumer, to continuously monitor energy consumption, prices, and fuel-
switching opportunities. (5)
Marketing Services. Products and Services would offer intellectual
property products and marketing services to non-affiliated businesses.
This could involve (but is not limited to) selling CNG inventions and
software to others, selling customer lists, providing a bill-insert service
to third parties, providing automated meter reading services to non-
affiliated LDCs, as well as other consulting services, such as (but not
limited to) how to set up a billing mechanism or marketing program. (6)
Risk Management Products. A variety of programs may be made
available to gas customers interested in hedging energy price or
consumption fluctuations. Applicants propose this line of business in
keeping with the March 25, 1996 Columbia order.
____________________
(5) This line of business was approved for Columbia in the March 25, 1996
order cited above (see "Safety Inspections and Electronic Measurement
Services") and is comparable to that previously approved by the Commission
in Central and South West Corporation HCAR No. 26367 (September 1, 1995)
(approving consulting and energy analysis services, among other things).
The repair aspect of this business was previously approved for Applicants
in the August 28, 1995 order cited above(see "One Package Appliance
Inspection and Replacement Program").
(6) This line of business expands on Applicants "Pipeline Maintenance,
Construction and Managerial Support Services for Others" approved as part
of the August 28 order cited above.
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Applicants also propose expansion of its Service Line Maintenance
Program to cover any type of service line -- wire or pipe -- owned by the
customer. Products and Services would pay for the repairs in exchange for
a nominal monthly fee. The customer would choose what was covered and then
pays just one monthly fee to Products and Services, instead of separate
monthly fees to the telephone, cable or water utilities. This may be more
convenient and cost effective for the customer.
In addition, as approved for Columbia in the March 25, 1996 order
cited above, Applicants request authorization for Products and Services to
offer incidental products and services related to the consumption of
energy, or the maintenance of property, which are similar to the types of
services listed. This would essentially permit Products and Services to
respond to the needs of customers as those needs are identified. Because
the products or services would always relate to the consumption of energy
or maintenance of property, all of the precedents cited above should be
considered precedent for these incidental products and services. In
today's fast moving energy markets, it is essential for Products and
Services to have the flexibility to respond to product and service
developments expeditiously.
Finally, Applicants also request authorization for an investment by
Products and Services of $250,000 in American Gas Finance Company, LLC
(AGFC). Products and Services has entered into a subscription agreement
(See Exhibit A-l) with AGFC -- the consummation of which is contingent upon
SEC approval -with $250,000 placed in escrow until SEC approval is
obtained. AGFC will provide consumer financing services to customers of
American Gas Association ("AGA") member companies and trade allies. AGFC
will provide purchasing, selling, and discounting loan services to member
utilities and trade allies, using Fannie Mae capital. The Fannie Mae loans
are to be used for
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"weatherization" improvements (e.g., replacement of heating and air
conditioning systems, water heaters, windows, as well as installation of
insulation).
Applicants submit that the proposed additional Customer Services
are reasonably incidental and/or economically necessary or appropriate to
the Consolidated System core utility business of distributing gas at retail
and will primarily benefit the Consolidated LDCs and their customers.(7)
Applicants submit that the additional Customer Services will
promote the safe and efficient distribution of natural gas at retail. The
additional Customer Services will also foster effective demand side
management by reducing unnecessary consumption. Applicants submit that
such equipment and services are consistent with or reasonably incidental to
the type of appliance sales and marketing activities that have been
approved by the Commission in cases such as Engineers Public Service
Company, 12 S.E.C. 41 (1942) at 54-55; Mississippi Power Company, HCAR No.
22453 (September 1, 1978); General Public Utilities Corporation, HCAR No.
15184 (February 9, 1965); and Cities Service Company, HCAR No. 5028 (May 5,
1944), 15 S.E.C. 962 (1944), and most recently, Columbia Gas System, Inc.,
HCAR No. 26498, 61 S.E.C. 1505 (1996).
____________________
(7) Applicants submit that each of the proposed Customer Services falls
within one or more of the categories of energy-related activities which
would be permitted under proposed rule 58. See Holding Company Act Release
No. 26311 (June 28, 1995).
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Item 2. Fees, Commissions, and Expenses
It is estimated that the fees, commissions and expenses ascertainable
at this time to be incurred by Consolidated in connection with the proposed
transactions will not exceed $5,000, including $4,000 payable to
Consolidated Natural Gas Service Company, Inc. ("Service Company") for
services on a cost basis (including regularly employed counsel) for the
preparation of this Application-Declaration and other documents, and $1,000
for miscellaneous other expenses.
The charges of Service Company, a subsidiary service company, for
services on a cost basis (including regularly employed counsel) in
connection with the preparation of this Application-Declaration and other
related documents and papers required to consummate the proposed
transactions are as stated above.
Item 3. Applicable Statutory Provisions
If the Commission considers the proposed future transactions to
require any authorization, approval or exemption, under any section of the
Act or Rule or Regulation other than those cited herein, such
authorization, approval or exemption is hereby requested.
Item 4. Regulatory Approval
No state commission and no federal agency other than this
Commission has jurisdiction over the proposed transactions except with
regard to service agreements and affiliate transactions between the CNG
LDCs and Products and Services.
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Item 5. Procedure
Applicants respectfully request that an order be issued approving
this Post Effective Amendment by December 31, 1996.
It is submitted that a recommended decision by a hearing or other
responsible officer of the Commission is not needed with respect to the
proposed transactions. The office of the Division of Investment Management
Office of Public Utility Regulation may assist in the preparation of the
Commission's decision. There should be no 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
The following exhibits and financial statement are made a part of
this statement:
(a) Exhibits
o A-1 Subscription Agreement for Investment in AGFC
o Proposed Notice pursuant to Rule 22(f)
(b) Financial Statements
Financial statements of the applicant-declarants are deemed
unnecessary with respect to the proposed authorizations sought herein due to
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the simple nature of the Amendment. However, any financial information
will be furnished which the Commission shall request.
Item 7. Information as to Environmental Effects
The proposed transactions do not involve major federal action
having a significant effect on the human environment. See Item 1(a).
No federal agency has prepared or is preparing an environmental
impact statement with respect to the proposed transaction.
SIGNATURES
___________
Pursuant to the requirements of the Public Utility Holding Company
Act of 1935, the undersigned Companies have duly caused this statement to
be signed on their behalf by the undersigned thereunto duly authorized.
CONSOLIDATED NATURAL GAS COMPANY
CNG PRODUCTS AND SERVICES, INC.
By J. M. Hostetler
Its Attorney
Dated: November 13, 1996
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EXHIBIT A-1
October 18, 1996
American Gas Finance Company, L.L.C.
c/o American Gas Association
1515 Wilson Boulevard
Arlington, VA 22209-2469
Attention: Daniel L. Sanford
Dear Mr. Sanford:
The signed subscription agreement and investor certificate for
Consolidated's $250,000 investment in GasFinCo are enclosed. Please note
that we have included an addendum to the subscription agreement regarding
the investment being subject to S.E.C. approval, and therefore our
investment is being paid into escrow.
Please contact me if you have any questions regarding the matter.
Sincerely,
s/ Mark M. Whitlinger
MMW:cr(gasfinco)
Enclosures
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Number: 30
SUBSCRIPTION AGREEMENT
Date: __________,1996
American Gas Finance Company, L.L.C.
c/o American Gas Association
1515 Wilson Boulevard
Arlington, Virginia 22209-2469
Attention: Dan L. Sanford
Ladies and Gentlemen:
The undersigned (the "Investor") hereby subscribes for the number of
units (the "Units") of membership interest of American Gas Finance Company,
L.L.C., a Delaware limited liability company (the "Company"), set forth on
the signature page hereto, and agrees to pay the total purchase price for
such Units as indicated herein.
A. The Investor understands that:
1. This Subscription Agreement and the funds delivered hereunder
will be returned promptly to the Investor, with a pro-rata portion of
interest earned, if any, and all of the Investor's obligations under this
Subscription Agreement will terminate if the American Gas Association, the
Administrator of the Company (the "Administrator"), does not accept this
Subscription Agreement. This subscription is irrevocable and subject to
acceptance or rejection, in whole or in part, by the Company, acting
through its Administrator, in its sole discretion.
2. All or any part of the Units for which the Investor is hereby
subscribing may not be transferred unless they have been registered under
the Securities Act of 1933, as amended (the "Act"), and applicable state
securities laws, or exemptions from registration are available. The
Investor recognizes that the Company has made no representations with
respect to registration of the Units under the Act or compliance with any
requirements for exemption and, as a result, that the Investor must be
prepared to bear the economic risk of its investment for an indefinite
period of time, that the Investor must be able to bear the loss of its
entire investment and, in particular, that the Company has not undertaken
to redeem or repay the Units at any time.
<PAGE> 3
3. The Investor acknowledges that all documents, records and
books pertaining to this investment have been made available for inspection
by its attorney, its accountant and the Investor itself, and that the books
and records of the Company will be available upon reasonable notice for
inspection by Investors during reasonable business hours at the Company's
principal place of business.
4. The Investor acknowledges that the information contained in
the Confidential Private Offering Memorandum, dated September 12, 1996 (the
"Memorandum") is confidential and non-public and agrees that all such
information shall be kept in strict confidence by the Investor and neither
used by the Investor for the Investor's personal benefit (other than in
connection with this subscription), nor disclosed to any third party for
any reason whatsoever; provided, however, that this obligation shall not
apply to any such information that (a) is part of the public knowledge or
literature and readily accessible at the date hereof, (b) becomes part of
the public knowledge or literature and readily accessible by publication
(except as a result of a breach of this provision) or (c) is received from
third parties (except third parties who disclose such information in
violation of any confidentiality agreements or obligations, including,
without limitation, any Subscription Agreement entered into with the
Company).
5. The representations, warranties and agreements of the
Investor contained herein and in any other writing delivered by the
Investor in connection with the transactions contemplated hereby shall be
true and correct in all material respects on and as of the date of the sale
of the Units as if made on and as of such date and shall survive the
execution and delivery of this Agreement and the purchase of the Units.
B. The Investor hereby represents, warrants and covenants that:
1. Except as noted in the Addendum, the Investor has all
requisite power and authority to enter into this Agreement and to perform
the obligations contemplated hereby.
2. Except as noted in the Addendum, this Agreement has been duly
executed and delivered by the Investor and constitutes the valid and
binding obligation of the Investor, enforceable against the Investor in
accordance with its terms.
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3. The execution, delivery and performance by the Investor of
this Agreement and the consummation of the transactions contemplated hereby
do not and will not contravene or constitute a default under or give rise
to a right of termination, cancellation or acceleration of any right or
obligation of the Investor under any provision of applicable law or
regulation or of any agreement, judgment, injunction, order, decree or
other instrument binding on the Investor, or result in the imposition of
any lien on any asset of the Investor.
4. The Units will not be registered under the Act, or the
securities laws of any state or other applicable jurisdiction (the "Laws")
and are being offered and sold to the Investor in reliance upon exemptions
from registration under the Act and such laws. The reliance of the Company
on exemptions from registration under the Act and the Laws is based in part
on the Investor's representations set forth herein. The Investor
acknowledges and agrees that the Units may be offered or sold only in
accordance with the registration requirements of the Act or an exemption
therefrom, and, in each case, in accordance with the transfer restrictions
set forth in this Agreement and in the Operating Agreement of the Company.
The Investor understands that the Company and the Administrator have no
obligation or intention to register the Units under the Act or the Laws, or
to file the reports to make public the information required by Rule 144 (or
any successor provision) promulgated under the Act.
5. The Investor is acquiring its shares for its own account and
not with a view to resale or distribution.
6. In evaluating the suitability of an investment in the
Company, the Investor has not relied upon any representations or other
information (whether oral or written) from the Company or the Administrator
(or any of its agents or representatives), other than as set forth in the
Memorandum and this Agreement. With respect to individual tax and other
economic considerations involved in this investment, the Investor is not
relying on the Company or the Administrator. The Investor has carefully
considered and has, to the extent the Investor believes such discussion
necessary, discussed with the Investor's professional legal, tax,
accounting and financial advisers the suitability of an investment in the
Units for the Investor's particular tax and financial situation and has
determined that the Units being subscribed for by the Investor are a
suitable investment for the Investor.
7. The Investor is aware that there is no market for the Units
and the Units subscribed for herein are being acquired solely by and for
the account of the Investor, for investment, and not with a view to resale
or distribution; the Investor has no contract, undertaking, agreement or
<PAGE> 5
arrangement with any person to sell, transfer or pledge all or any part of
the Units for which the Investor hereby subscribes, and the Investor has no
plans or intentions to enter into any such contract, undertaking or
arrangement.
8. The Investor agrees not to transfer the Units, or any
interest therein, except in accordance with the terms and provisions of
this Agreement or the Operating Agreement of the Company and, in connection
with such transfer, not to violate the Act or the Laws or the rules and
regulations of the Securities and Exchange Commission or of any state
securities commission promulgated under the Laws.
9. The Investor has adequate means of providing for the
Investor's current needs and contingencies and has no need for liquidity of
this investment and can afford the economic risk of a loss of the
Investor's entire investment in the Units. The Investor's overall
commitment to investments which are not readily marketable is not
disproportionate to the Investor's net worth, and investment in the Units
will not cause such overall commitment to become excessive.
10. The Investor recognizes that investment in the Company
involves certain risks and certain conflicts of interest and the Investor
has taken full cognizance of and understands all of the risk factors
related to the purchase of the Units and inherent in the business of the
Company, including, without limitation, those set forth under the caption
"Risk Factors" in the Memorandum. The Investor is able to bear the
economic risk of the Investor's investment in the Company. The Investor
has substantial investment experience in making investment decisions of the
type contemplated hereby, is experienced in evaluating companies such as
the Company and has such knowledge and experience in financial and business
matters that the Investor is capable of evaluating the merits and risks of
an investment in the Company.
11. The Investor is acquiring the Units without being furnished
any offering literature, prospectus or any other form of general
solicitation or general advertising other than the Memorandum, and the
Investor has not been given any oral or written representations or
assurances by the Company or any representative of the Company in
connection with this investment other than as set forth in the Memorandum
or as contained in any documents or answers to questions furnished to the
Investor by the Company.
12. The address set forth on the Investor's signature page is the
Investor's true and correct principal place of business and the Investor
has no present intention of relocating any other jurisdiction, and if there
<PAGE> 6
should be any change of address prior to the closing of the offering in
accordance with the Memorandum, the Investor will immediately provide such
information to the Company or the Administrator.
13. The Investor expressly acknowledges that: (a) no federal or
state agency has reviewed or passed upon the adequacy or accuracy of the
information made available to the Investor, or made any finding or
determination as to the fairness for investment, or any recommendation or
endorsement of the Units as an investment; (b) there are restrictions on
the transferability of the Units and there will be no public market for the
Units and, accordingly, it may not be possible for the Investor to
liquidate the investment in the Units; and (c) any anticipated federal
and/or state income tax benefits applicable to the Units may be lost
through changes in, or adverse interpretations of, existing laws and
regulations.
14. The Investor understands that the Administrator may have a
conflict of interest in making determinations as Administrator of the
Company.
15. The Investor understands and acknowledges that the
Administrator, has been represented in connection with the offering of the
Units and other matters by the law firm of McDermott, Will & Emery ("MW&E")
and that the Company has not been separately represented by counsel. The
Investor understands that MW&E has heretofore and may hereafter represent
the Administrator and/or its affiliates in various matters. The Investor
acknowledges that MW&E has not been engaged to represent the Investor and
is not representing the Investor in connection with the purchase by the
Investor of Units hereunder and the Investor has or, if deemed necessary by
the Investor, will obtain independent legal representation in connection
with the transactions contemplated hereby.
16. The Investor has carefully read the Memorandum. The Investor
hereby confirms that it has been granted the opportunity to ask questions
of, and receive answers from, representatives of the Company concerning the
terms and conditions of the Offering and to obtain any additional
information which it deems necessary to verify the accuracy of the
information contained in the Memorandum.
17. All information which the Investor has provided in the
Questionnaire annexed hereto concerning itself and its financial position
is complete and correct as of the date set forth above, and if there should
be any material change in such information prior to my having been admitted
as a Member, the Investor will immediately provide such information to the
Administrator.
<PAGE> 7
18. The undersigned hereby certifies that the undersigned is
organized under U.S. federal or state law (if a corporation or
partnership), or that the undersigned's income from all sources is subject
to U.S. federal income tax (if a trust or estate). The undersigned agrees
to notify the Company within 30 days of any change in status as certified
in the preceding sentence.
19. The Investor is a full voting member (U.S. local distribution
company) of the American Gas Association.
20. The Investor is a corporation, not formed for the specific
purpose of acquiring the Units, with total assets in excess of $5,000,000.
21. The Investor is an "accredited investor" within the meaning
of Rule 501 of Regulation D promulgated under the Act.
C. FOR ALABAMA INVESTORS ONLY:
THESE SECURITIES ARE OFFERED PURSUANT TO A CLAIM OF EXEMPTION UNDER THE
ALABAMA SECURITIES ACT. A REGISTRATION STATEMENT RELATING TO THESE
SECURITIES HAS NOT BEEN FILED WITH THE ALABAMA SECURITIES COMMISSION.
THE COMMISSION DOES NOT RECOMM[END OR ENDORSE THE PURCHASE OF ANY
SECURITIES, NOR DOES IT PASS UPON THE ACCURACY OR COMPLETENESS OF THE
MEMORANDUM. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
FOR ARIZONA INVESTORS ONLY:
THESE SECURITIES ARE OFFERED PURSUANT TO AN EXEMPTION FROM REGISTRATION
WITH THE UNITED STATES SECURITIES AND EXCHANGE COMMISSION. THE
COMMISSION DOES NOT PASS UPON THE MERITS OF ANY SECURITIES NOR DOES IT
PASS UPON THE ACCURACY OR COMPLETENESS OF ANY OFFERING CIRCULAR OR
OTHER SELLING LITERATURE. THE UNITS HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF ARIZONA, AS AMENDED, AND ARE OFFERED PURSUANT TO AN
EXEMPTION RELATING TO TRANSACTIONS NOT INVOLVING ANY PUBLIC OFFERING.
THE UNITS CANNOT BE RESOLD OR TRANSFERRED UNLESS REGISTERED UNDER SUCH
ACT OR UNLESS AN EXEMPTION FROM REGISTRATION IS AVAILABLE.
THESE ARE SPECULATIVE SECURITIES.
<PAGE> 8
FOR CONNECTICUT INVESTORS ONLY:
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER SECTION 36-485 OF THE
CONNECTICUT SECURITIES ACT AND MAY NOT BE TRANSFERRED OR SOLD EXCEPT IN
TRANSACTIONS WHICH ARE EXEMPT UNDER THE CONNECTICUT SECURITIES ACT OR
PURSUANT TO AN EFFECTIVE REGISTRATION THEREUNDER.
FOR FLORIDA INVESTORS ONLY:
THE FLORIDA SECURITIES AND INVESTOR PROTECTION ACT REQUIRES AND THE
ISSUER HEREBY AGREES THAT IF SALES ARE MADE TO FIVE (5) OR MORE PERSONS
IN FLORIDA, ANY SALE IN FLORIDA IS VOIDABLE BY THE INVESTOR, AND THE
INVESTOR SHALL HAVE THE RIGHT TO WITHDRAW ITS ACCEPTANCE OF AN OFFER TO
ACQUIRE THESE SECURITIES FOR A PERIOD OF (i) THREE (3) BUSINESS DAYS
AFTER THE FIRST TENDER OF CONSIDERATION IS MADE BY THE INVESTOR TO THE
ISSUER RELATING TO THE ACQUISITION OF THESE SECURITIES AND PAYMENT
THEREFOR OR (ii) WITHIN THREE (3) BUSINESS DAYS AFTER THE AVAILABILITY
OF TIES RECISION PRIVILEGE IS COMMUNICATED TO THE INVESTOR, WHICHEVER
OCCURS LATER. IF THE UNDERSIGNED SHOULD DETERMINE TO WITHDRAW
ACCEPTANCE OF THE OFFER TO INVEST IN THESE SECURITIES UNDER SUCH
CIRCUMSTANCES, THE INVESTOR MAY DO SO WITHOUT ANY LIABILITY WHATSOEVER.
FOR GEORGIA INVESTORS ONLY:
THESE SECURITIES HAVE BEEN ISSUED OR SOLD IN RELIANCE ON PARAGRAPH (13)
OF CODE SECTION 10-5-9 OF THE GEORGIA SECURITIES ACT OF 1973 AND MAY
NOT BE SOLD OR TRANSFERRED EXCEPT IN A TRANSACTION WHICH IS EXEMPT
UNDER SUCH ACT OR PURSUANT TO AN EFFECTIVE REGISTRATION UNDER SUCH ACT.
FOR INDIANA INVESTORS ONLY:
THE SECURITIES OFFERED PURSUANT TO THIS CONFIDENTIAL OFFERING
MEMORANDUM HAVE NOT BEEN REGISTERED UNDER SECTION 3 OF THE INDIANA BLUE
SKY LAW, SECTION 23-2-1-3 OF THE INDIANA CODE, AS AMENDED, AND MAY NOT
BE SOLD OR TRANSFERRED EXCEPT IN A TRANSACTION WHICH IS EXEMPT UNDER
SUCH LAW OR PURSUANT TO AN EFFECTIVE REGISTRATION THEREUNDER.
INVESTORS SHOULD BE AWARE THAT THEY MAY BE REQUIRED TO BEAR THE
FINANCIAL RISKS OF THIS INVESTMENT FOR AN INDEFINITE PERIOD OF TIME.
FOR NEW JERSEY INVESTORS ONLY:
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE BUREAU OF
SECURITIES OF THE STATE OF NEW JERSEY, NOR HAS THE BUREAU PASSED ON OR
<PAGE> 9
ENDORSED THE MERITS OF THIS OFFERING. THE FILING OF THIS OFFERING DOES
NOT CONSTITUTE APPROVAL OF THE ISSUE OR THE SALE THEREOF BY THE BUREAU
OF SECURITIES. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
FOR PENNSYLVANIA INVESTORS ONLY:
EACH SUBSCRIBER WHO IS A PENNSYLVANIA RESIDENT HAS THE RIGHT TO CANCEL
AND WITHDRAW HIS SUBSCRIPTION AGREEMENT AND HIS PURCHASE OF SECURITIES
UPON WRITTEN NOTICE TO THE ISSUER GIVEN WITHIN TWOBUSINESS DAYS
FOLLOWING THE RECEIPT BY THE ISSUER OF THE SUBSCRIBER'S WRITTEN
AGREEMENT OR, IN THE CASE OF A TRANSACTION IN WHICH THERE IS NO WRITTEN
SUBSCRIPTION AGREEMENT, WITHIN TWO BUSINESS DAYS AFTER THE SUBSCRIBER
MAKES THE INITIAL PAYMENT FOR THE SECURITIES.
EACH PENNSYLVANIA RESIDENT WHO SUBSCRIBES FOR THE SECURITIES BEING
OFFERED HEREBY AGREES NOT TO SELL THESE SECURITIES FOR A PERIOD OF 12
MONTHS AFTER THE DATE OF PURCHASE.
FOR TEXAS INVESTORS ONLY:
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER APPLICABLE SECURITIES
LAWS OF TEXAS AND THEREFORE CANNOT BE RESOLD OR TRANSFERRED UNLESS THEY
ARE SUBSEQUENTLY REGISTERED OR UNLESS AN EXEMPTION FROM REGISTRATION IS
AVAILABLE.
FOR UTAH INVESTORS ONLY:
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE UTAH SECURITIES ACT
AND, THEREFORE, CANNOT BE RESOLD UNLESS THEY ARE REGISTERED UNDER SUCH
SECURITIES ACT OR UNLESS AN EXEMPTION FROM REGISTRATION IS AVAILABLE.
THIS MEMORANDUM DOES NOT CONSTITUTE AN OFFER OR SOLICITATION IN ANY
STATE OR OTHER JURISDICTION IN WHICH SUCH AN OFFER OR SOLICITATION IS
NOT AUTHORIZED.
FOR VERMONT INVESTORS ONLY:
EACH PERSON WHO ACCEPTS AN OFFER TO PURCHASE SECURITIES EXEMPTED FROM
REGISTRATION BY SECTION 4204 (A)(15) OF THE VERMONT SECURITIES ACT DIRECTLY
FROM THE ISSUER OR AN AFFILIATE OF THE ISSUER, SHALL HAVE THE RIGHT TO
WITHDRAW HIS ACCEPTANCE WITHOUT INCURRING ANY LIABILITY TO THE ISSUER, OR
ANY OTHER PERSON WITHIN THREE (3) CALENDAR DAYS AFTER THE FIRST
<PAGE> 10
TENDER OF CONSIDERATION IS MADE BY THE PURCHASER TO THE ISSUER, AN
AGENT OF THE ISSUER, OR AN ESCROW AGENT, OR WITHIN THREE (3) CALENDAR
DAYS AFTER THE AVAILABILITY OF THAT PRIVILEGE IS COMMUNICATED TO THE
PURCHASER, WHICHEVER OCCURS LATER.
D. Indemnification. The Investor shall indemnify and hold harmless
the Company and the Administrator and each officer, director or control
person of the Company and/or the Administrator, who is or may be a party or
is or may be threatened to be made a party to any threatened, pending or
completed action, suit or proceeding, whether civil, criminal,
administrative or investigative, against any and all losses, liabilities
and expenses (including reasonable attorney's fees, judgments, fines and
amounts paid in settlement) incurred by the Company, the Administrator or
any officer, director or control person of the Company and/or the
Administrator by reason of or arising from any actual or alleged
misrepresentation or misstatement of facts or omission to represent or
state facts made or alleged to have been made by the Investor to the
Company or the Administrator (or any agent or representative of the Company
or the Administrator), or omitted or alleged to have been omitted by the
Investor, concerning the Investor or the Investor's authority to invest or
financial position in connection with the offering, including, without
limitation, any such misrepresentation, misstatement or omission contained
in any documents submitted by the Investor, to the extent the Company, the
Administrator or such officer, director or control person has not otherwise
been reimbursed in connection with such action, suit or proceeding.
E. LIMITATION ON TRANSFER OF UNITS.
1. The Investor covenants, warrants and represents that the Investor will
not transfer, assign, sell, hypothecate, pledge, alienate, encumber or in
any way transfer or dispose of any of the Investor's Units (whether now
owned or hereafter acquired) or any interest therein (including, but not
limited to, any proxy to vote the same to a person who is not a member of
the Company) or any right under this Agreement (including, but not limited
to, the right to receive payment for such Units), except as provided for by
the terms contained in this Agreement or in the Operating Agreement. The
limitations in the foregoing sentence include, but are not limited to, any
disposition occurring upon or by virtue of the bankruptcy or insolvency of
the Investor, the appointment of a receiver, trustee, conservator or
guardian for the Investor or the Investor's property, a transfer pursuant
to court order in the event of divorce, marital dissolution, legal
separation or similar proceedings, or a transfer pursuant to any loan or
security agreement whether or not permitted hereby. Any transferee of the
Investor shall, by acceptance
<PAGE> 11
of such Units, be bound by all of the terms and conditions of this
Agreement to the same extent as if such transferee were the Investor.
2. If any Units are disposed of in whole or in part, voluntarily
or involuntarily, by operation of law or otherwise, by reason of the
insolvency or bankruptcy of the Investor, or otherwise in violation of the
provisions of this Agreement or the Operating Agreement, the recipient of
any such Units shall not be registered on the books of the Company and the
transferee thereof shall not be recognized as the holder of such Units by
the Company, and shall not acquire any voting, dividend or other rights in
respect thereof. Every transferee of Units under this Agreement, by
accepting transfer of the Units, agrees to be bound by all provisions of
this Agreement. For purposes of this Agreement, the term "Units" shall
also include any warrants, options or rights issued in payment or
distribution of any unit reclassification, dividend or split with respect
to the units of membership interest of the Company or any shares, warrants,
options or rights of another company into which the Units are exchanged.
3. The Investor agrees that neither the Company nor any other
holder of units of the Company shall be obligated to make any payments to
any non-permitted transferee notwithstanding notice of a purported
transfer.
F. POWER OF ATTORNEY. The undersigned does hereby irrevocably
constitute and appoint the Administrator and its successors in interest,
the undersigned's true and lawful attorney-in-fact and agent, to execute,
acknowledge, verify, swear to, deliver, record and file, in the
undersigned's name, place and stead, (i) the Articles of Formation and the
Company Operating Agreement and any amendment or modification thereof made
in accordance with their terms, (ii) all conveyances and other instruments
which the Administrator deems appropriate to reflect the dissolution and
termination of the Company pursuant to the terms of the Operating
Agreement, (iii) all instruments relating to the admission of any
additional or substituted Members, (iv) a certificate of assumed name and
such other certificates and instruments as may be necessary, and (v) all
instruments, documents and certificates which may from time to time be
required by the laws of the United States of America, or any state or
political subdivision or agency thereof, to effectuate, implement and
continue the valid existence and purposes of the Company. The power of
attorney granted herein shall be deemed to be coupled with an interest,
shall be irrevocable, shall survive the death, dissolution, bankruptcy,
incompetency or legal disability of the undersigned and shall extend to the
undersigned's heirs, successors and assigns. The undersigned hereby agrees
to be bound by any representations made by said agent and attorney-in-fact
acting in good faith pursuant to such power of attorney, and the
undersigned hereby waives any and all defenses which may be available to
contest, negate or disaffirm any action of the Administrator taken in good
faith under such power of attorney.
<PAGE> 12
G. GENERAL.
1. Upon the execution of this Agreement and closing of the
offering in accordance with the Memorandum, the Company shall cause the
certificates representing the Units to be endorsed with a restrictive
legend as follows:
Notice is hereby given that the sale, assignment, transfer, pledge
or other disposition or encumbrance of the Units represented by
this certificate is prohibited by the terms of a Subscription
Agreement dated as of ______________, 1996, and the Operating
Agreement, dated as of ______________, 1996, a copy of which is on
file at the Company's principal office.
2. This Agreement shall inure to the benefit of and be binding
upon the Company, the Investor and, to the extent applicable, the other
members of the Company and their respective heirs, executors,
administrators, personal representatives, legatees, successors and
permitted assigns.
3. The parties hereto agree to sign all necessary documents and
take all other actions necessary to carry out the provisions of this
Agreement.
4. All notices required or permitted to be given by any party to
another party hereunder shall be deemed to have been duly given if
delivered to such other party or if mailed by registered or certified mail,
in the case of the Company, to its principal office, or, in the case of the
Investor, to the last address which appears in the books of the Company.
Any party to this Agreement shall have the right, from time to time, to
specify as its address for purposes of this Agreement any other address in
the United States upon giving fifteen (15) days notice thereof to the other
party.
5. This Agreement and the legal relations between the parties
shall be governed by and construed and enforced in accordance with the
internal laws of the State of Delaware without giving effect to choice of
law principles.
6. This Agreement embodies the entire agreement and
understanding of the parties hereto with respect to the subject matter
contained herein, and supersedes all prior written or oral agreements and
understandings between the parties with respect to such subject matter.
There are no contrary agreements, understandings, undertakings, covenants
or representations with respect to the Units other than as expressly set
forth herein.
<PAGE> 13
7. The provisions of this Agreement are severable and if any one
or more provisions may be determined to be illegal or otherwise
unenforceable, in whole or in part, the remaining provisions, and any
partially enforceable provisions to the extent enforceable, shall
nevertheless be binding and enforceable.
8. This Agreement may be executed in one or more counterparts,
each of which will be deemed an original but all of which together shall
constitute one and the same instrument.
IF THE UNDERSIGNED AGREES WITH THE FOREGOING, SIGN THE SIGNATURE
PAGES TO THIS SUBSCRIPTION AGREEMENT LOCATED IN THE SUBSCRIPTION DOCUMENTS
PROVIDED AND RETURN THEM TO THE ADMINISTRATOR, AND THIS SUBSCRIPTION
AGREEMENT SHALL THEN BECOME A BINDING AGREEMENT BETWEEN THE UNDERSIGNED AND
THE ADMINISTRATOR IN ACCORDANCE WITH ITS TERMS.
<PAGE> 14
ADDENDUM
________________
Subscription Contingent Upon SEC Approval. The consummation of
the transaction contemplated in the Agreement is contingent upon Investor's
obtaining approval from the Securities and Exchange Commission ("SEC") of a
Form U-1, Application or Declaration under the Public Utility Holding
Company Act of 1935 (the "Application"), which Investor shall file as soon
as practicable with the SEC.
Escrow of Subscription Purchase Price. With the execution of the
Agreement, Investor shall deposit the amount of Two Hundred and Fifty
Thousand Dollars ($250,000) in an escrow account with Chase Manhattan Bank
("Chase"). If the SEC approves the Application, then Investor will direct
Chase to wire transfer the funds from the escrow account to Company and the
Agreement will be legally binding. If the SEC denies the Application, then
the funds in the escrow account will be returned to Investor and the
Agreement will be null and void.
<PAGE> 15
SUBSCRIPTION AGREEMENT AND OPERATING AGREEMENT
SIGNATURE PAGE
Dated: October 18, 1996
Number of Units subscribed for: 250
Aggregate purchase price ($1,000 per
Unit with a minimum of $100,000 and a $250,000
maximum of $500,000):
SUBSCRIBER: s/R. E. Wright
(signature) R. E. Wright, President
(if signing in capacity of officer or trustee, please indicate)
CNG Products and Services, Inc. 25-1781718
(print exact name in which (Tax Identification Number)
Units will be held)
CNG Tower
625 Liberty Avenue
(address)
Pittsburgh, PA 15222-3199
SUBSCRIPTION ACCEPTED:
AMERICAN GAS FINANCE COMPANY,
L.L.C.
By: American Gas Association, its
Administrator
By:
Its:
<PAGE> 1
EXHIBIT O
Proposed Notice Pursuant to Rule 22f)
(Release No. 35-__________)
FILINGS UNDER THE PUBLIC UTILITY HOLDING COMPANY ACT OF 1935 ("ACT")
November ____, 1996
Notice is hereby given that the following filing(s) has/have been made with
the Commission pursuant to provisions of the Act and rules promulgated
thereunder. All interested persons are referred to the application(s)
and/or declaration(s) for complete statements of the proposed
transaction(s) summarized below. The application(s) and/or declaration(s)
and any amendments thereto is/are available for public inspection through
the Commission's Office of Public Reference. Interested persons wishing to
comment or request a hearing on the application(s) and/or declaration(s)
should submit their views in writing by December ___, 1996 to the
Secretary, Securities and Exchange Commission, Washington, DC 20549, and
serve a copy on the relevant applicant(s) and/or declarant(s) at the
address(es) specified below. Proof of service (by affidavit or, in case of
an attorney at law, by certificate) should be filed with the request. Any
request for 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 the matter. After said date, the application(s) and/or declaration(s),
as filed or as amended, may be granted and/or permitted to become
effective.
<PAGE> 2
Consolidated Natural Gas Company, et al. (70-8577)
__________________________________________________
Consolidated Natural Gas Company ("Consolidated"), CNG Tower,
Pittsburgh, Pennsylvania 15222-3199, a registered holding company, and its
wholly-owned non-utility subsidiary, CNG Products and Services, Inc.
("Products and Services"), 625 Liberty Avenue, Pittsburgh, Pennsylvania
15222, have filed a post effective amendment to their Application-
Declaration under Sections 6, 7, 9(a), 10, 12(b), and 13(b) of the Act.
Products and Services is engaged in the business of providing energy-
related services ("Customer Services") to customers of the local
distribution companies ("LDCs") in the Consolidated System and to others,
primarily customers of non-affiliated utilities. The Customer Services are
offered by Products and Services as a convenience to utility customers, are
related to energy services being provided to such customers.
Products and Services now requests authorization to offer the following
additional categories of Customer Services: Energy-Related Equipment,
Safety Inspection/Electronic Measurement Services, Marketing Services, and
Risk Management Products.
Energy-Related Equipment. Products and Services would sell and
install energy-related appliances and products of all types (collectively,
referred to as "Energy-Related Equipment"). Examples are (but not limited
to) furnaces, air conditioning, hot water heaters, heat pumps, gas grills,
gas lights and logs, natural gas vehicle ("NGV") conversion equipment (to
convert a vehicle to "dual-fuel" capability) and the NGV refueling
equipment necessary to allow customers to refuel their NGVs at home.
Products and Services would also sell products that enhance safety,
increase energy efficiency, or provide
<PAGE> 3
energy-related information. Examples of safety devices are (but not
limited to) home security systems which include carbon monoxide/smoke and
fire detectors, and fire extinguishers. Energy consumption monitoring
devices, including software programs, may be offered, along with "demand
side management" devices to increase energy efficiency or reduce energy
consumption.
Products and Services currently has authorization to arrange third-
party financing for customers in connection with the Customer Services.
Products and Services now proposes to expand this authorization to allow
third party financing for the additional Customer Services contemplated in
this Post-Effective Amendment.
Although Applicants expect that third-party financing will continue
to be the preferred financial offering, Products and Services also proposes
to offer financing to customers by (1) making short-term loans to cover the
period of installation of the energy-related appliances until permanent
financing can be obtained by the customer or (2) making long-term loans for
a period of time not to exceed the lesser of 10 years or the expected
useful life of the equipment. The aggregate amount of energy-related
appliance equipment financing loans by Products and Services outstanding at
any one time will not exceed $50,000,000, with an individual customer
financing limit of $5,000,000 at any one time. This type of activity was
previously approved by the Commission in Consolidated Natural Gas Company,
HCAR No. 26234 (February 23, 1995) (approving financing of gas utilizing
equipment for customers of the affiliated LDCs and gas marketing companies
of the CNG system) and Columbia Gas Systems, Inc., HCAR No. 26498 (March
25, 1996).
Products and Services also may make available to third-party
contractors who independently sell and/or install Energy-Related Equipment
<PAGE> 4
certain options to offer their customers assistance in financing the
purchase (including installation) of Energy-Related Equipment. Such
financing options may be in the form of third-party financing or through
Products and Services' financing offering consistent with the terms
authorized herein.
Safety Inspection/Repair and Electronic Measurement Services.
Products and Services would offer a safety inspection/repair service to
check for carbon monoxide, faulty equipment/wiring, among other things.
Repair services may also be offered to correct any problems discovered by
the inspection. As to electronic measurement services, Products and
Services would offer residential, commercial and industrial customers a
variety of enhanced measurement and billing services that enable the
customer to better estimate and control energy expenditures. Examples are
(but not limited to) enabling consumers using their phone or computer to
find out what their gas or energy bill is at any point during the month, or
with a large commercial consumer, to continuously monitor energy
consumption, prices, and fuel-switching opportunities.
Marketing Services. Products and Services would offer intellectual
property products and marketing services to non-affiliated businesses.
This could involve (but is not limited to) selling CNG inventions and
software to others, selling customer lists, providing a bill-insert service
to third parties, providing automated meter reading services to non-
affiliated LDCs, as well as other consulting services, such as (but not
limited to) how to set up a billing mechanism or marketing program.
Risk Management Products. A variety of programs may be made
available to gas customers interested in hedging energy price or
consumption fluctuations.
<PAGE> 5
Applicants also propose expansion of its Service Line Maintenance
Program to cover any type of service line -- wire or pipe -- owned by the
customer. Products and Services would pay for the repairs in exchange for
a nominal monthly fee. The customer would choose what was covered and then
pays just one monthly fee to Products and Services, instead of separate
monthly fees to the telephone, cable or water utilities. This may be more
convenience and cost effective for the customer.
Applicants state that the additional Customer Services are closely
related to Customer Services already being provided by Products and
Services.
____________________________
For the Commission, by the Division of Investment Management, pursuant
to delegated authority.
Jonathan G. Katz
Secretary
