<PAGE> 1
File Number 70-9203
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
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
Pittsburgh, Pennsylvania 15222-3199
(a registered holding company and
the parent of the other parties)
CNG ENERGY SERVICES CORPORATION
CNG POWER COMPANY
One Park Ridge Center
P.O. Box 15746
Pittsburgh, Pennsylvania 15244-0746
CNG RETAIL SERVICES CORPORATION
One Chatham Center
Pittsburgh, Pennsylvania 15219
CNG PRODUCTS AND SERVICES, INC.
CNG Tower
Pittsburgh, Pennsylvania 15222-3199
CNG PRODUCING COMPANY
CNG Tower
1450 Poydras Street
New Orleans, Louisiana 70112-6000
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
N. F. CHANDLER
General Attorney
Consolidated Natural Gas Service Company, Inc.
CNG Tower
625 Liberty Avenue
Pittsburgh, Pennsylvania 15222-3199
<PAGE> 2 File Number 70-9203
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
Form U-1
APPLICATION-DECLARATION UNDER THE PUBLIC UTILITY
HOLDING COMPANY ACT OF 1935
Item 1. Description of Proposed Transaction
I. INTRODUCTION
Consolidated Natural Gas Company ("CNG" or the "Company") is a public
utility holding company registered as such under the Public Utility Holding Co.
Act of 1935 ("Act" or "1935 Act"). It is engaged solely in the business of
owning and holding all of the outstanding securities of fourteen subsidiaries.
These subsidiary companies are primarily engaged in natural gas exploration,
production, purchasing, gathering, transmission, storage, distribution,
marketing and by-product operations. CNG and its subsidiaries are hereinafter
referred to as the "CNG System."
II. REORGANIZATION OF CNG ENERGY SERVICES CORPORATION GROUP
On April 21, 1998, CNG announced that it will discontinue wholesale
marketing and trading of natural gas and electricity, including integrated
energy management. This decision was based on the Company's perception that
these activities did not provide sufficient opportunities to build shareholder
value despite its determined efforts over the past five years. Wholesale
margins across the industry have been driven to virtually zero in many
instances. The Company does not believe that the time, cost and risk involved
in further scaling up a wholesale marketing and trading company at the current
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stage of market maturity are justified, given the potential rewards. CNG will,
however, continue to compete in the unregulated retail energy marketplace.
CNG Energy Services Corporation ("Energy Services"), a wholly-owned
subsidiary of Consolidated, was principally formed to be the subsidiary in the
CNG System to market at wholesale natural gas and other energy products and
services. CNG Power Services Corporation ("Power Services"), a wholly-owned
subsidiary of CNG and an exempt wholesale generator ("EWG") under Section 32 of
the Act, engages in wholesale electricity marketing.
In its exiting of the wholesale energy industry, CNG may sell its entire
equity ownership in Energy Services and Power Services. In order to prepare
these companies for disposition, a reorganization plan ("Plan") of the Energy
Services Group is proposed. The Plan consists of two phases. In the first
phase ("Phase I"), all of the subsidiaries of Energy Services and Power
Services would be transferred by Energy Services either through liquidating
distributions pursuant to a plan of liquidation under Section 332 of the
Internal Revenue Code ("Plan of Liquidation") or as dividend distributions to
CNG. In the second phase ("Phase II"), some of these former direct or
indirect subsidiaries of Energy Services would be retransferred by CNG to
become subsidiaries of other direct or indirect subsidiaries of CNG, and two of
these former subsidiaries of Energy Services would be consolidated. The form
of distributions to CNG in Phase I and the timing, manner and extent of the
redistributions in Phase II will depend on the business needs as well as the
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ultimate tax impact that results from such transactions. This application
seeks approval of the transactions contained in both phases of the Plan.
Organizational charts showing the positions of all of the companies in the
Energy Services group before after implementing Phase I and Phase II of the
Plan are filed as Exhibit G.
III. DESCRIPTION OF THE SUBSIDIARIES OF ENERGY SERVICES AND POWER SERVICES
Energy Services has several wholly-owned subsidiaries engaged in the
energy business. The directly owned subsidiaries of Energy Services are: CNG
Products and Services, Inc. (Products and Services"), CNG Power Company ("Power
Company"), CNG Storage Services Company ("Storage Company"), CNG Main Pass Gas
Gathering Corporation ("Main Pass"), CNG Oil Gathering Corporation ("Oil
Gathering") and CNG Retail Services Corporation ("Retail Services"). Power
Services has one wholly-owned subsidiary, CNG Lakewood, Inc. ("CNG Lakewood").
The following table shows the capitalization, consisting only of common
stock, of each of the Energy Services subsidiaries.
Number of Shares Number of Shares Par Value
Subsidiary Authorized Outstanding Per Share
_______________ ________________ ________________ _________
Products and 1,000 399 $10,000
Services
Power Company 112,500 22,460 1,000
Storage Company 10,000 1,366 10,000
Main Pass 3,000 1 1
Oil Gathering 4,000 1 1
Retail Services 5,000 600 10,000
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The activities of the above several subsidiaries of Energy Services are
summarized as follows.
PRODUCTS AND SERVICES. Products and Services markets energy-related
services, such as gas line maintenance protection, primarily to utility
customers. Products and Services has a wholly-owned subsidiary, CNG
Technologies, Inc. ("CNG Technologies"). CNG Technologies is a special
purpose subsidiary owning a 20% limited partnership interest in Enertek
Partners, L.P. which operates a gas industry fund that invests in smaller
companies developing innovative products, processes and techniques that
enhance the supply, transportation and utilization of natural gas.
POWER COMPANY. Power Company owns (i) interests in two cogeneration
projects and three EWGs, (ii) all of the outstanding capital stock of CNG
Market Center Services, Inc., a special purpose subsidiary holding a 50%
interest in CNG/Sabine Center, a partnership offering gas hub services
along the 7,200 mile pipeline system of CNG Transmission Corporation, and
(iii) a liquids division.
STORAGE COMPANY. Storage Company provides base gas for a natural gas
storage field of CNG Transmission Corporation.
MAIN PASS. Main Pass is a special purpose subsidiary owning a 13.3%
interest in Dauphin Island Gathering Partners, a partnership owning and
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operating a gas gathering pipeline system in the Main Pass region of the
Gulf of Mexico.
OIL GATHERING. Oil Gathering is a special purpose subsidiary owning a 33-
1/3% interest in the Main Pass Oil Gathering Company, a partnership owning
and operating a gathering pipeline system for oil produced in association
with gas wells in the Main Pass region of the Gulf of Mexico.
RETAIL SERVICES. Retail Services markets natural gas and energy related
products primarily to utility customers at retail.
CNG Lakewood holds a 1% general partnership interest in Lakewood
Cogeneration, L.P., which owns and operates an EWG in Lakewood, New Jersey.
CNG Lakewood has 5,000 shares of common stock, $10,000 par value per share,
authorized, of which 52 shares are outstanding.
IV. PHASE I OF THE REORGANIZATION
Since CNG desires to retain Retail Services, Storage Services, Power
Company, Main Pass, Oil Gathering and Products and Services as part of the CNG
System after the disposal of Energy Services, it will be necessary to remove
each of these companies from being subsidiaries of Energy Services. It is
proposed that, in Phase I, all of the common stock of these subsidiaries be
transferred by Energy Services to CNG pursuant to the Plan of Liquidation or as
a dividend; each of the six transferred companies would thus initially be
direct subsidiaries of CNG. See Exhibit G.
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V. PHASE II OF THE REORGANIZATION.
Phase II consists of the following steps.
(A) PRODUCTS AND SERVICES MERGED INTO RETAIL SERVICES.
Retail Services was formed pursuant to Commission order dated January 15,
1997, HCAR No. 26647, ("January 1997 Order") which authorized Energy Services
to engage in all forms of energy brokering and marketing transactions,
including those involving electricity, natural gas, coal, oil, other
hydrocarbons, wood chips, wastes and other combustibles, at wholesale and
retail. These energy related activities could be engaged in without regard to
locations or identities of clients or sources of revenues. The January 1997
Order also allowed Energy Services to create subsidiaries through which it
would engage in such activities. Retail Services is, to date, the only
subsidiary formed under this order. Retail Services has so far limited its
activities to marketing to residential and commercial customers at retail as
energy deregulation occurs on a state-by-state basis.
Commission order dated August 28, 1995, HCAR No. 26363 ("August 1995
Order"), authorized Energy Services to form Products and Services to engage in
the business of certain energy related services. The August 1995 Order
approved ten categories of energy-related services that could be offered: (i) a
service line maintenance program; (ii) Appliance Guard, which is an extended
service warranty program; (iii) Payment Power, which is a bill payment
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protection plan; (iv) routine furnace servicing; (v) a one-package appliance
inspection and replacement plan; (vi) operation of a community bill payment
center; (vii) the providing of energy audits and services; (viii) propane
service; (ix) installation of gas fired electric generators; and (x) pipeline
maintenance, construction, and managerial support services for nonaffiliated
utilities.
By Commission order dated August 27, 1997, HCAR No. 26757 ("August 1997
Order"), Products and Services was allowed to offer seven additional categories
of energy related services. These are: (i) sale and installation of energy-
related equipment, such as electric and gas appliances, and products promoting
safe energy use; (ii) safety inspection and repair services; (iii) electronic
measurement services; (iv) marketing and consulting services, such as providing
nonassociate utility companies and other third parties with bill insert and
automated meter-reading services; (v) an expanded service line maintenance
program; (vi) energy equipment customer financing; and (vii) products and
services incidental to the foregoing.
It is proposed to merge Retail Services with Products and Services for the
following reasons. The products and services being offered by both companies
overlap in that they are all energy-related. The customer base is essentially
the same, i.e. customers of affiliated and nonaffiliated utilities. The sales
techniques are the same, with marketing efforts for Products and Services
currently being conducted through the personnel and facilities of Retail
Services pursuant to a service agreement. The focus of CNG's retail marketing
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efforts would be greatly enhanced by combining the two companies, resulting in
reduced marketing and administrative costs. Management's attention would be
concentrated on operating the similar businesses through one company instead of
two. Regulatory reporting would also be simplified, with reduced compilation
and review time spent by the CNG System and by the Commission staff due to
having to deal with only one set of periodic reports, rather than two.
The merger would occur by merging Products and Services into Retail
Services, with the outstanding common stock of Products and Services being
cancelled and Retail Services being the surviving corporation. Thus the
surviving corporation would continue to have 5,000 shares of common stock, par
value $10,000 per share, authorized, and 600 shares of common stock
outstanding.
(B) RETAIL SERVICES SUCCEEDS TO CERTAIN AUTHORIZATIONS
Upon merger of Products and Services into Retail Services, Retail Services
would succeed to the prior 1935 Act authorizations granted to Products and
Services under the August 1995 and August 1997 Orders. However, request is
made for the elimination of one restriction in such orders. Both such orders
state that Products and Services will provide its categories of services both
within and outside of the four states of Virginia, West Virginia, Pennsylvania
and Ohio where the utility-company subsidiaries of CNG are located
(collectively the "LDC States"). Both orders required that during the twelve-
month period beginning on the first day of the month following the commencement
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of Products and Services' business, and for each subsequent calendar year
thereafter, total revenues derived by Products and Services in LDC States will
exceed total revenues similarly derived from customers in all other states.
Due to the trend of energy markets in a deregulation environment to become
integrated national markets, it is requested that this "50% limit" be
eliminated with respect to all future revenues of Retail Services as the
successor to Products and Services after the merger.
In view of the proposed disposal of Energy Services by CNG, it is proposed
that Retail Services also succeed to the authorizations granted to Energy
Services under the January 1997 Order. Specifically, Retail Services would be
authorized to engage in energy marketing in the same breadth as that allowed
Energy Services, and Retail Services would be permitted to form subsidiaries
through which to engage in marketing activities to the same extent permitted
Energy Services. CNG would provide financing to Retail Services pursuant to
Rule 52 under the Act. Reporting of activities of Retail Services would
continue to be in the Rule 24 Master Certificate filed under File No. 70-8667.
(C) CNG TECHNOLOGIES BECOMES A SUBSIDIARY OF POWER COMPANY.
By Commission order dated December 21, 1990, HCAR No. 25224 ("December
1990 Order"), CNG through Power Company was authorized to form CNG Technologies
as a vehicle through which to invest up to $2,000,000 in limited partnership
interests in Enertek Partners, L.P. Pursuant to authorization in Commission
order dated April 22, 1996, HCAR No. 26509 ("April 1996 Order"), Products and
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Services purchased all of the outstanding common stock of CNG Technologies from
Power Company. At the time of the April 1996 Order, it was thought by
management of Energy Services that the ownership of the investment in the gas
industry fund more appropriately belonged with the retail operations of
Products and Services. It is now thought that CNG Technologies, as a passive
investment company, does not belong under an active retail marketing company,
but would more appropriately be placed back under Power Company which holds
other limited purpose investments. Accordingly, it is proposed that the
outstanding common stock of CNG Technologies be declared as a dividend by
Retail Services or Products and Services (depending as to whether these two
companies have been merged) to CNG, and subsequently be transferred by CNG as a
capital contribution to Power Company after it becomes a direct subsidiary of
CNG.
(D) MAIN PASS AND OIL GATHERING EACH BECOME A SUBSIDIARY OF CNG PRODUCING.
CNG Producing Company ("Producing Company") is a wholly-owned subsidiary
of Consolidated which engages in gas and oil exploration and production
primarily in the Gulf of Mexico, the southern and western United States, the
Appalachian region and in Canada.
By Order dated July 26, 1995, HCAR No. 26341 ("July 1995 Order") Energy
Services was authorized, without further Commission approval, through December
31, 1997, to invest an aggregate amount up to at least $150 million to acquire:
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(i) an ownership interest, which may be up to 50% of the voting or nonvoting
stock, in one or more corporations established for the sole purpose of
engaging in Gas Related Activities(1); (ii) either in its own name or through
a wholly owned special purpose subsidiary company, up to 50% of the general
partnership interests in one or more partnerships, or up to 50% voting equity
interest in one or more other joint business entities such as joint ventures
or limited liability companies, which are established for the sole purpose of
engaging in Gas Related Activities; and/or (iii) up to 100% of the limited
partnership
interests in one or more partnerships established for the sole purpose of
engaging in Gas Related Activities. None of the projects in which Energy
Services may invest can be a public-utility company. The July 1995 Order
also authorized Consolidated and Energy Services to guarantee their
obligations incurred as a result of equity investments made in the joint
entities up to an aggregate amount of $150 million. No such guarantees have
been made to date.
As of December 31, 1997, Energy Services had invested pursuant to the July
1995 Order $24,235,000 and $14,323,000 in the Main Pass Gathering Company and
the Main Pass Oil Gathering Company, respectively. These partnerships were
formed to transport the gas and oil jointly produced from the gas fields in the
Main Pass region near the Alabama coast of the Gulf of Mexico. Energy Services
____________
(1) "Gas Related Activities" is defined in the July 1995 and December 1997
Orders as the purchasing, pooling, transporting, exchanging, storage and
sale of gas supplies from competitively priced sources.
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owns the interests in these partnerships through Main Pass and Oil Gathering,
respectively. On December 31, 1996, the Main Pass Gathering Company was merged
into Dauphin Island Gathering Partners, in which Energy Services now indirectly
owns a 13.6% general partnership interest. Energy Services owns indirectly a
33-1/3% general partnership in Main Pass Oil Gathering Company.
The July 1995 Order was extended through December 31, 2002 through
Commission order dated December 30, 1997, HCAR No. 26807 ("December 1997
Order"). The December 1997 Order also increased the amount Energy Services may
invest and the amount of guarantees which could be made to $200 million in each
case. The amount that could be financed by Energy Services for "partnering"
investments through selling shares of its common stock to CNG, open account
advances from CNG and long-term loans from CNG was also increased by the
December 1997 Order to $200 million.
Authority is requested to transfer ownership of all of the outstanding
common stock of Main Pass and Oil Gathering to be held by CNG after
consummation of Phase I to Producing Company. The transfer would occur through
a capital contribution by CNG of all of such stock to Producing Company.
Main Pass and Oil Gathering were originally made subsidiaries of Energy
Services consistent with the strategic business plan then in effect. That plan
called for Producing Company to dramatically reduce its costs and to
restructure its exploration and development activities. At the same time, it
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was contemplated that Energy Services would become a "full service" energy
marketing firm, whose activities would include the ownership of production
area pipelines and the provision of gathering and other field services to
producers. Accordingly, Energy Services was designated to be the shareholder
of both special purpose entities, Main Pass and Oil Gathering, whose functions
were anticipated to resemble and potentially complement Energy Services' field
service activities.
Since this structure was implemented, the focus of CNG System energy
marketing has changed significantly. Wholesale markets for gas and
electricity, Energy Services' former core lines of business, have become
primarily low-margin commodity markets which Energy Services is now exiting.
Second, the marketing efforts of the CNG System in the future will be
concentrated on entering retail markets for gas and electricity as these
markets open up in accordance with utility restructuring plans approved by
state regulatory commissions. Third, the market for field services has become
increasingly complex and differentiated as producers have sought from providers
not only the gas nomination and balancing services traditionally associated
with gas supply management, but also more specialized production management,
measurement and handling services.
Because of the priorities assigned to the wholesale and retail energy
marketing and the increasingly complexity of the field service market, Energy
Services had not acquired production area assets beyond ownership of Main Pass
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and Oil Gathering. During the same period, Producing Company has enjoyed
notable success in exploration and production activities. Since 1995,
Producing Company has added significant proved reserves. As these reserves
have been developed, Producing Company has committed substantial resources to
managing and handling production. Further, in order to minimize the cost of
shipping its gas and oil to market centers, Producing Company has also acquired
considerable knowledge regarding production area pipelines and other assets,
including the systems and activities of Dauphin Island Gathering Partners and
Main Pass Oil Gathering Company which move very significant volumes of
Producing Company's production.
The proposed transfer of stock from Energy Services to Producing Company
will permit investments in Main Pass and Oil Gathering to be placed under cost-
effective management and control with the other pipelines and assets in the
same producing region that Producing Company already owns and operates.
(E) PRODUCING COMPANY SUCCEEDS TO CERTAIN AUTHORIZATIONS
As indicated above, it is proposed that Producing Company be authorized to
succeed to Energy Services' interests in Main Pass and Oil Gathering, which
were acquired by Energy Services pursuant to the July 1995 Order. CNG
Producing will also continue to engage in all aspects of the business of a gas
producing company which substantially encompasses all of the activities defined
as "Gas Related Activities" in the July 1995 Order. Also as noted above, CNG
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has decided that Energy Services is no longer to engage in the business of
being the CNG System wholesale marketing component. Accordingly it is
requested that CNG Producing succeed to and be substituted for Energy Services
as the authorized party under the July 1995 and December 1997 Orders.
(F) CNG LAKEWOOD BECOMES A SUBSIDIARY OF POWER COMPANY
Power Services and CNG Lakewood are EWGs and therefore currently exempt
from all provisions of the Act pursuant to Section 32(e) thereof. Power
Company holds all the interests in power generating entities in the CNG System
with the exception of CNG Lakewood. CNG Lakewood was originally a subsidiary
of Power Company but was transferred to Power Services in 1995. In view of the
probable sale of Power Services, CNG desires to transfer ownership of CNG
Lakewood so that all power generating assets in the system will again be under
the management of a single subsidiary of CNG. Prior to its disposition, Power
Services will transfer to CNG its ownership of all of the outstanding common
stock of CNG Lakewood. CNG subsequently will transfer such shares to Power
Company as a contribution to capital.
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V. AUTHORIZATIONS REQUESTED
The following authorizations are hereby requested.
1. For Retail Services, Storage Services, Power Company, Main Pass,
Oil Gathering and Products and Services to become direct subsidiaries of
CNG through a dividend or a distribution pursuant to the Plan of
Distribution by Energy Services of all of the outstanding common stock of
each of the six subsidiaries to CNG.
2. For Products and Services to merge into Retail Services.
3. For Retail Services to succeed to certain 1935 Act authorizations
of Products and Services and Energy Services as explained in more detail
above.
4. For CNG Technologies to become a subsidiary of Power Company
through a dividend by Retail Services or Products and Services, as the
case may be, of all of the outstanding commons stock of CNG Technologies
to CNG, and a subsequent transfer of such stock by CNG to Power Company as
a contribution to capital.
5. For Main Pass and Oil Gathering to become subsidiaries of
Producing Company through a transfer of such stock by CNG to Producing
Company as a contribution to capital.
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6. For Producing Company to be authorized to succeed to certain 1935
Act authorizations of Energy Services as explained in more detail above.
CNG Lakewood is to become a subsidiary of Power Company through a dividend
by Power Services of all of the outstanding common stock of CNG Lakewood to
CNG, and a subsequent transfer of such stock by CNG to Power Company as a
contribution to capital. Since CNG Lakewood is an EWG, no authority is
required to effect these transfers.
It is proposed that dividends declared and paid in connection with the
restructuring be paid out of capital or unearned surplus, to the extent
permitted under applicable corporate law, in the event the payer does not have
sufficient earned surplus on its books to cover the amount of the dividend.
The payment of dividends out of capital or unearned surplus in connection with
the restructuring would not in any way adversely affect the financial integrity
of any company in the CNG System or the working capital of any public-utility
company in the CNG System.
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RULE 53 SATISFIED
Rule 54 promulgated under the Act states that in determining whether to
approve the issue or sale of a security by a registered holding company for
purposes other than the acquisition of an exempt wholesale generator ("EWG") or
a foreign utility company ("FUCO"), or other transactions by such registered
holding company or its subsidiaries other than with respect to EWGs or FUCOs,
the Commission shall not consider the effect of the capitalization or earnings
of any subsidiary which is an EWG or a FUCO upon the registered holding company
system if Rules 53(a), (b) or (c) are satisfied. Consolidated believes that
Rule 53(a), (b) and (c) are satisfied in its case as follows.
Rule 53 requires that the aggregate investment in EWGs and FUCOs not
exceed 50% of a system's consolidated retained earnings. Consolidated's
present investments in EWGs and FUCOs satisfies the 50% limitation, and the
Consolidated system will not make any additional investments in EWGs and FUCOs
if such were to cause it to exceed that limitation, unless the Commission
otherwise authorizes.
Consolidated and its subsidiaries maintain books and records to identify
the investments in and earnings from its EWGs in which they directly or
indirectly hold an interest, thereby satisfying Rule 53(a)(2). In addition,
the books and records of each such entity 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 SEC access to such books and records and financial statements as it
may request.
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It is anticipated that a minimal number of employees of Consolidated's
domestic public-utility companies 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 utility companies, thereby satisfying Rule 53(a)(3).
All Form U-1 filings seeking authority to finance EWGs, together with
related filings of Rule 24 and Item 9 of Form U5S, have been, or will be,
submitted to the public utility commissions of the states having jurisdiction
over the rates of the public-utility companies in the CNG System, thereby
satisfying Rule 53(a)(4).
None of the conditions described in Rule 53(b) exist with respect to
Consolidated, thereby satisfying Rule 53(b) and making Rule 53(c) inapplicable.
Item 2. Fees, Commissions and Expenses
It is estimated that the fees, commissions and expenses ascertainable at
this time to be incurred by Consolidated and Energy Services in connection with
the herein proposed transactions will consist of $15,000 payable to
Consolidated Natural Gas Service Company, Inc. for services on a cost basis
(including regularly employed counsel) for the preparation of this Application
and other documents, and $2,000 for miscellaneous other expenses.
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Item 3. Applicable Statutory Provisions
The following statutory and rule provisions under the 1935 Act are deemed
applicable to the category of proposed transactions as indicated below.
Dividend or Liquidation Distribution of Securities to a Parent
__________________________________
Sections 9(a), 10, 12(c) and (f) and Rule 46 are deemed to apply to the
(i) acquisition of securities resulting from the following dividend or
liquidation distribution transactions and (ii) possible credit to other than an
earned surplus account to effect any dividends.
Dividend or liquidation distribution by Energy Services to CNG of all of
the outstanding common stocks of Retail Services, Storage Services, Power
Company, Main Pass, Oil Gathering and Products and Services.
Dividend by Retail Services or Products and Services, as the case may be,
to CNG of all of the outstanding common stock of CNG Technologies.
The acquisition by CNG of all of the outstanding common stock of CNG
Lakewood would be pursuant to Section 32(f) of the Act.
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Merger of Products and Services into Retail Services
____________________________________________________
Sections 9, 10(a) and 12(f) and Rules 43, 44 and 45 are deemed applicable
to the acquisition by Retail Services of the properties and assets of Products
and Services. Section 12 and Rules 42 and 45 are deemed applicable to the
cancellation and extinguishing of the common stock of Products and Services.
Sections 6, 7 and 12(f) and Rule 42 may be deemed applicable to the assumption
of the obligations of Products and Services by Retail Services.
Capital Contributions to a Subsidiary
_____________________________________
Sections 9(a), 10(a) and 12(f) and Rule 45 are deemed to apply to the
acquisition of securities resulting from the following capital contribution
transactions.
Capital contribution by CNG to Power Company of all of the
outstanding common stock of CNG Technologies.
Capital contribution by CNG to Producing Company of all of the common
stock of each of Main Pass and Oil Gathering.
<PAGE> 23
The acquisition by Power Company from CNG of all of the outstanding common
stock of CNG Lakewood would be pursuant to Section 32(f) of the Act.
To the extent that the proposed transactions are considered by the
Commission to require authorization, approval or exemption under any section of
the Act or provision of the rules or regulations other than those specifically
referred to herein, request for such authorization, approval or exemption is
hereby made.
Item 4. Regulatory Approval
No state commission or Federal commission (other than the Securities and
Exchange Commission) has jurisdiction over the proposed transaction.
Item 5. Procedure
It is hereby requested that the Commission issue its order with respect
to the transactions proposed herein on or before June 30, 1998. Since CNG is
currently negotiating to sell Energy Services to nonaffiliated parties, time is
of the essence.
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 transaction. The 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.
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Item 6. Exhibits and Financial Statements
The following exhibits and financial statements are made a part of this
statement:
(a) Exhibits
A All the common stock issued by subsidiaries of CNG that are parties
to the proceeding are in forms previously authorized for each such
subsidiary.
F Opinion of Counsel for Consolidated and the other parties to the
Application.
(To be filed by amendment)
G Charts showing organization of Energy Services Group before and
after implementing the Plan.
O Proposed Notice pursuant to Rule 22(f).
(b) Financial Statements
Financial statements are not submitted with respect to the authorizations
requested herein due to the immaterial effect thereof on the Company's
financial statements on a consolidated basis. However, Consolidated will
furnish any financial information that the Commission shall request.
Item 7. Information as to Environmental Effects
As more fully described in Item 1, the proposed transactions subject to
the jurisdiction of this Commission relate only to the purchase and sale
of securities and involve no major federal action significantly affecting the
human environment.
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SIGNATURE
Pursuant to the requirements of the Public Utility Holding Co. Act of
1935, the undersigned companies have duly caused this amendment to be signed on
their respective behalf by the undersigned thereunto duly authorized.
CONSOLIDATED NATURAL GAS COMPANY
By D. M. Westfall
Senior Vice President and
Chief Financial Officer
CNG ENERGY SERVICES CORPORATION
CNG POWER COMPANY
CNG RETAIL SERVICES CORPORATION
CNG PRODUCTS AND SERVICES, INC.
CNG PRODUCING COMPANY
By N. F. Chandler
Their Attorney
Date: June 5, 1998
