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File Number 70-7258
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
Post Effective Amendment No. 6
to
FORM U-1
APPLICATION-DECLARATION UNDER THE
PUBLIC UTILITY HOLDING COMPANY ACT OF 1935
By
CONSOLIDATED NATURAL GAS COMPANY
CNG Tower
Pittsburgh, Pennsylvania 15222-3199
(a registered holding company and
the parent of the other parties)
CNG COAL COMPANY
CNG ENERGY SERVICES CORPORATION
CNG FINANCIAL SERVICES, INC.
CNG INTERNATIONAL CORPORATION
CNG IROQUOIS, INC.
CNG MARKET CENTER SERVICES, INC.
CNG PIPELINE COMPANY
CNG POWER COMPANY
CNG POWER SERVICES CORPORATION
CNG PRODUCING COMPANY
CNG PRODUCTS AND SERVICES, INC.
CNG RESEARCH COMPANY
CNG RETAIL SERVICES CORPORATION
CNG STORAGE SERVICE COMPANY
CNG TELECOM, INC.
CNG TRANSMISSION CORPORATION
CONSOLIDATED NATURAL GAS
SERVICE COMPANY, INC.
CONSOLIDATED SYSTEM LNG COMPANY
THE EAST OHIO GAS COMPANY
(FOR ITSELF AND AS SUCCESSOR IN INTEREST TO
THE RIVER GAS COMPANY AND
WEST OHIO GAS COMPANY)
HOPE GAS, INC.
THE PEOPLES NATURAL GAS COMPANY
VIRGINIA NATURAL GAS, INC.
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File Number 70-7258
Names and addresses of agents for service:
S. E. WILLIAMS, Senior Vice President
and General Counsel
Consolidated Natural Gas Company
CNG Tower
625 Liberty Avenue
Pittsburgh, Pennsylvania 15222-3199
J. M. HOSTETLER, JR., Attorney
CNG Tower
625 Liberty Avenue
Pittsburgh, Pennsylvania 15222-3199
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File Number 70-7258
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Post Effective Amendment No. 5
to
FORM U-1
APPLICATION-DECLARATION UNDER THE PUBLIC UTILITY
HOLDING COMPANY ACT OF 1935
Item 1. DESCRIPTION OF PROPOSED TRANSACTION
BACKGROUND
_________________________
Consolidated Natural Gas Company ("CNG") is a Delaware corporation
and a public utility holding company registered as such 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 the captioned companies. These
subsidiary companies are primarily engaged in natural gas exploration,
production, purchasing, gathering, transmission, storage, distribution,
by-product operation, research, marketing of energy commodities and energy-
related products and services.
PREVIOUS MONEY POOL ORDERS
__________________________
By Securities and Exchange Commission ("Commission") orders dated June 12
and July 16, 1986, HCAR No. 24128 and 24150, respectively, (collectively
referred to as "Original Orders") under this file number, CNG and most of the
captioned companies were authorized to establish the Consolidated System Money
Pool ("Money Pool"). (1) By order dated May 27, 1987, HCAR No. 24399 under
this file number, CNG Pipeline Company and CNG Energy
__________________
(1) By Commission orders dated April 29, 1994 (HCAR No. 26038) and December
10, 1996 (HCAR No. 26619), respectively, the Commission approved the merger of
The River Gas Company and West Ohio Gas Company into The East Ohio Gas
Company.
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Services Corporation (formerly, CNG Trading Company) were authorized to be
participants in the Money Pool. By order dated February 14, 1990, HCAR No.
25040, under File No. 70-7667, Virginia Natural Gas, Inc. was authorized to be
a participant in the Money Pool. By order dated May 13, 1991, HCAR No. 25311,
under File No. 70-7729, CNG Storage Service Company was authorized to be a
participant in the Money Pool. By order dated April 8, 1994, HCAR No. 26021,
under this file number, CNG Iroquois, Inc. was authorized to be a participant.
By Order dated October 21, 1994, HCAR No. 26148, under File No. 70-8447, CNG
Market Center Services, Inc. was authorized to be a participant.
The Original Orders established that funds from the money pool be
administrated by Consolidated Natural Gas Service Company, Inc. ("Service
Company") and loaned on a short-term basis to each participant company which
has a need for short-term funds, other than CNG. (CNG is a participant but
not a borrower.) After satisfaction of borrowing needs of the participant
companies and after any possible prepayment of outstanding indebtedness,
Service Company, as agent for the pool, invests excess funds and allocates the
earnings among those participant companies providing such excess funds.
Contributions to and borrowings from the pool are documented on the books of
each participant company. Loans are payable on demand, may be prepaid without
premium or penalty, and bear interest, payable monthly. The April 8, 1994
order changed the rate charged to borrowers from "the rate equal to the
effective short-term borrowing costs of CNG" to "a rate equal to the effective
weighted average rate of interest on CNG's commercial paper and/or revolving
credit borrowings." In the event no such loans are outstanding, the federal
funds effective rate as quoted daily by the Federal Reserve Bank of New York
applies. These rates are adjusted monthly to reflect the opportunity cost of
investments to the extent borrowings are obtained from contributions that
otherwise would be invested as surplus by the lending participant company. In
addition, any participant may withdraw funds contributed to the money pool at
any time.
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NEW COMPANIES TO JOIN MONEY POOL
___________________________________
CNG Financial Services, Inc. ("Financial Services"), CNG Power Services
Corporation ("Power Services"), CNG Products and Services, Inc. ("Products and
Services"), CNG Retail Services Corporation ("Retail Services"), CNG Telecom,
Inc. ("Telecom") and CNG International Corporation ("International")
(collectively, the "New Companies") now propose to be full participants in the
Money Pool.
By order dated February 23, 1995, HCAR No. 26234, the Commission
authorized Financial Services to finances the purchase of certain gas
utilizing equipment by creditworthy customers who purchase or maybe expected
to purchase gas directly or indirectly from the local distribution companies,
gas marketing or gas pipeline subsidiaries of the CNG system. Financial
Services may obtain funds from CNG through purchasing stock, making open
account advances or long-term loans, in any combination thereof.
Power Services is the Consolidated system's ("CNG System") national power
marketing entity and has exempt wholesale generator ("EWG") status under
Section 32 of the Act. In 1995, Power Services became a leading power
marketer in the U. S. -- in terms of mega-watt hour sales of electricity.
By order dated August 28, 1995, HCAR No. 26363, the Commission authorized
CNG and Energy Services to engage in the business of providing certain energy-
related services ("Customer Services") to customers of CNG's local
distribution companies and to others, primarily customers of utilities not
affiliated with CNG.
CNG formed a new special-purpose subsidiary -- CNG Products and Services
- -- to engage in the new business. (Originally CNG Special Products and
Services, Inc., the name was changed to CNG Products and Services, Inc.,
effective November 20, 1995.) The Customer Services (e.g., the Service Line
Maintenance Program) are offered as a convenience to utility customers.
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Financing can done through purchasing stock, making open account advances or
long-term loans, in any combination thereof.
Retail Services is the new CNG company to market energy commodities of
all types at retail. As authorized by Commission order dated January 15, 1997
(HCAR No. 26647), Retail Services is a subsidiary of Energy Services.
Telecom is an "exempt telecommunications company" within the meaning of
Section 34(a)(1) of the Act, as added by Section 103 of the Telecommunications
Act of 1996. The Federal Communications Commission issued its order granting
such status on January 29, 1997 (File No. ETC-96-19).
International is the CNG company that invests in energy-related
businesses outside the United States. Commission orders authorizing such have
been issued May 30 (HCAR No. 26523), October 25 (HCAR No. 26595) and November
16, 1996 (HCAR No. 26608).
A number of orders for CNG companies in recent years include blanket
authorization to incorporate additional subsidiaries to engage in the newly
authorized line of business. See Consolidated Natural Gas Company, et al.,
HCAR Nos. 26341 (Energy Services Partnering), 26500 (Omnibus Financing),
26523, 26595 and 26608 (International) and 26647 (Energy Services' Retail
Marketing of Energy Commodities). Applicants request that such additional
subsidiaries -- created under the above and similar blanket authorizations
- -- be allow to participate in the Money Pool, under the same terms and
conditions a currently authorized, without additional Commission
authorization.
The New Companies' participation in the Money Pool would allow their
available cash and/or short-term borrowing requirements to be matched on a
daily basis with those of other participants in the pool, thereby minimizing
the need for short-term borrowing. If the New Companies' participation in the
pool is authorized, funds will be loaned from the Money Pool in the form of
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open account advances under the same terms and limitations as currently
authorized. Any borrowings by the New Companies from the Money Pool would be
limited to each companies authorized aggregate amount of financing less the
amount of financing obtained from sources other than open account advances and
previous open account advances outstanding at the date of the order issued in
this proceeding.
COMPLIANCE WITH RULE 53
Any direct or indirect investment by Consolidated in any EWG would be
consummated only if, at the time thereof, and giving effect thereto,
Consolidated's "aggregate investment" determined in accordance with Rule
53(a)(1)(i) in all EWGs and FUCOs would not exceed 50% of CNG's consolidated
retained earnings as defined in Rule 53(a)(1)(ii). As of March 31, 1997, one-
half of the Company's consolidated retained earnings was $775,026,000; the
Company's investment in EWGs as of the same date is approximately
$14,566,000.
The books and records of Consolidated's EWGs are kept in conformity with
United States generally accepted accounting principles ("GAAP"), the financial
statements are prepared according to GAAP, and Consolidated undertakes to
provide the Commission access to such books and records and financial
statements as it may request. It is anticipated that a minimal number of
employees of Consolidated's LDCs will render services, directly or indirectly,
to EWGs and FUCOs in the Consolidated system, and the number of such employees
shall not in any event exceed two percent of the total number of employees of
such LDCs.
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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.
Item 5. Procedure
Applicants respectfully request that an order be issued approving
this Post Effective Amendment by May 15, 1997.
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
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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 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
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.
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SIGNATURES
___________
Pursuant to the requirements of the Public Utility Holding Company Act of
1935, the undersigned Company has duly caused this statement to be signed on
its behalf by the undersigned thereunto duly authorized.
CONSOLIDATED NATURAL GAS COMPANY
By D. M. Westfall
Senior Vice President
and Chief Financial Officer
CNG COAL COMPANY
CNG ENERGY SERVICES CORPORATION
CNG FINANCIAL SERVICES, INC.
CNG INTERNATIONAL CORPORATION
CNG IROQUOIS, INC.
CNG MARKET CENTER SERVICES, INC.
CNG PIPELINE COMPANY
CNG POWER COMPANY
CNG POWER SERVICES CORPORATION
CNG PRODUCING COMPANY
CNG PRODUCTS AND SERVICES, INC.
CNG RESEARCH COMPANY
CNG RETAIL SERVICES CORPORATION
CNG STORAGE SERVICE COMPANY
CNG TELECOM, INC.
CNG TRANSMISSION CORPORATION
CONSOLIDATED NATURAL GAS
SERVICE COMPANY, INC.
CONSOLIDATED SYSTEM LNG COMPANY
THE EAST OHIO GAS COMPANY
(FOR ITSELF AND AS SUCCESSOR
IN INTEREST TO THE RIVER GAS COMPANY
AND WEST OHIO GAS COMPANY)
HOPE GAS, INC.
THE PEOPLES NATURAL GAS COMPANY
VIRGINIA NATURAL GAS, INC.
By J. M. Hostetler, Jr.
Their Attorney
Dated: May 29, 1997
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EXHIBIT O
Proposed Notice Pursuant to Rule 22f)
(Release No. 35-__________)
FILINGS UNDER THE PUBLIC UTILITY HOLDING COMPANY ACT OF 1935 ("ACT")
May ____, 1997
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 June ___, 1997 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.
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Consolidated Natural Gas Company, et al. (70-7258)
__________________________________________________
Consolidated Natural Gas Company ("Consolidated"), CNG Tower, Pittsburgh,
Pennsylvania 15222-3199, a registered holding company, and a number of its
wholly-owned subsidiaries, have filed a post effective amendment to their
Application-Declaration under Sections 6, 7, 9(a), 10, and 12(b) of the Act.
The Applicants propose to admit several new CNG companies as full
participants in the Consolidated System Money Pool ("Money Pool") which is
administered by Service Company and authorized by Commission Order dated
January 12, 1986 HCAR Mo. 24150, under this file number.
The Money Pool consists of funds that may be available day to day, and
loaned on a short-term basis to those participants, other than Consolidated
and CNG Pipeline Company, which have a need for short-term funds.
Consolidated and CNG Pipeline Company are participants in the Money Pool but
not borrowers. After satisfaction of the borrowing needs of the Applicants,
Service Company, as agent of the Money Pool, invests excess funds and
allocates the earnings among those participants providing such excess funds.
____________________________
For the Commission, by the Division of Investment Management, pursuant to
delegated authority.
Jonathan G. Katz
Secretary
