(As filed November 7, 2000)
File No. 70-9605
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
Amendment No. 4
on
FORM U-1/A
APPLICATION/DECLARATION
under
THE PUBLIC UTILITY HOLDING COMPANY ACT OF 1935
EASTERN ENTERPRISES
9 Riverside Road
Weston, Massachusetts 02493
ENERGYNORTH, INC.
1260 Elm Street
P.O Box 329
Manchester, New Hampshire 03105
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(Names of companies filing this statement and
addresses of principal executive offices)
NONE.
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(Name of top registered holding company parent of each applicant or declarant)
L. William Law, Jr., Esq. Michelle L. Chicoine
Senior Vice President and General Counsel Executive Vice President
Eastern Enterprises EnergyNorth, Inc.
9 Riverside Road 1260 Elm Street
Weston, Massachusetts 02493 Manchester, New Hampshire 03101
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(Names and addresses of agents for service)
The Commission is requested to send copies of all notices, orders and other
communications to:
Andrew F. MacDonald, Esq. Richard A. Samuels, Esq.
Thelen Reid & Priest LLP McLane, Graf, Raulerson & Middleton P.A.
701 Pennsylvania Ave., N.W. 900 Elm Street
Washington, D.C. 20004 P.O. Box 326
Manchester, New Hampshire 03105
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TABLE OF CONTENTS
Item 1. Description of Proposed Transaction....................................1
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1.1 Introduction......................................................1
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1.2 Proposed Acquisition of EnergyNorth...............................2
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1.3 Other Related Transaction.........................................2
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1.4 Description of Eastern and EnergyNorth and Their Respective
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Subsidiaries......................................................4
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a. Eastern Enterprises...........................................4
b. EnergyNorth...................................................7
1.5. Principal Terms of the Amended Merger Agreement...................9
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Item 2. Fees, Commissions and Expenses........................................12
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Item 3. Applicable Statutory Provisions.......................................12
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3.1. Compliance with Section 10.......................................13
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a. The Acquisition is Lawful Under Section 8 of the Act and Is
Not Detrimental to the Carrying Out of the Provisions of
Section 11...................................................13
b. The Acquisition Will Serve the Public Interest by Tending
Toward the Economical and Efficient Development of an
Integrated Public-Utility System.............................13
c. The Merger's Compliance with Relevant New Hampshire Law......15
d. The Acquisition Will Not Tend Toward Any Interlocking
Relations or Undue Concentration of Control of Public-Utility
Companies....................................................16
e. The Consideration To Be Paid Is Reasonable and Bears a Fair
Relation to the Value of the Utility Assets Underlying the
Securities To Be Acquired....................................17
f. The Acquisition Will Not Unduly Complicate the Capital
Structure of Eastern's Holding CompanySystem and Will Not Be
Detrimental to the Public Interest, the Interest of Investors
or Consumers, or the Proper Functioning of the Holding-Company
System.......................................................18
3.2 Exemption under Section 3(a)(1)..................................20
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a. Eastern Will Not Derive a Material Part of Its income from E
NGI..........................................................21
b. After the Acquisition of EnergyNorth, Eastern and its Utility
Subsidiaries Will Remain "Predominantly Intrastate In
Character and Carry On Their Business Substantially..........23
Item 4. Regulatory Approval...................................................24
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Item 5. Procedure.............................................................24
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Item 6. Exhibits and Financial Statements.....................................25
---------------------------------
a. Exhibits.....................................................25
b. Financial Statements.........................................26
Item 7. Information as to Environmental Effects...............................30
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-i-
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The Application/Declaration filed in this proceeding on January 5, 2000, as
amended by Amendment No.1, filed on February 3, 2000, Amendment No. 2, filed on
June 1, 2000, and Amendment No. 3, filed on July 17, 2000, is hereby amended and
restated in its entirety to read as follows:
ITEM 1. DESCRIPTION OF PROPOSED TRANSACTION
-----------------------------------
1.1 Introduction. Eastern Enterprises ("Eastern"), an exempt holding
------------
company pursuant to Section 3(a)(1) the Public Utility Holding Company Act of
1935 (the "Act"),1 herein requests authorization pursuant to Sections 9(a)(2)
and 10 of the Act to acquire all the issued and outstanding common stock of
EnergyNorth, Inc. ("EnergyNorth"), also an exempt holding company pursuant to
Section 3(a)(1).2 Eastern also requests that the Commission issue an order
under Section 3(a)(1) of the Act confirming that Eastern and its subsidiary
companies, as such, as well as EnergyNorth in its capacity as a holding company,
will continue to qualify for an exemption under Section 3(a)(1) following the
proposed transaction.
Eastern is a Massachusetts voluntary association.3 It currently owns all
of the issued and outstanding common stock of three gas utility companies:
Boston Gas Company ("Boston Gas"), Essex Gas Company ("Essex Gas"), and Colonial
Gas Company ("Colonial Gas"). Each of these companies is organized under the
laws of the Commonwealth of Massachusetts and operates as a gas utility company
exclusively within Massachusetts. EnergyNorth, a New Hampshire corporation, owns
all of the issued and outstanding common stock of one gas utility company:
EnergyNorth Natural Gas, Inc. ("ENGI"). ENGI, a New Hampshire corporation,
operates as a gas utility company exclusively within New Hampshire.
------------------------
1 See Eastern Enterprises, et al., Holding Co. Act Release No. 27059
(August 12, 1999).
2 EnergyNorth claims an exemption pursuant to Rule 2, 17 C.F.R.ss.250.2.
See File No. 69-273.
3 Reference is hereby made to the declaration of trust establishing Eastern
Enterprises (formerly Eastern Gas and Fuel Associates) dated July 18, 1929, as
amended, a copy of which is on file in the office of the Secretary of the
Commonwealth of Massachusetts. The name "Eastern Enterprises" refers to the
trustees under said declaration as trustees and not personally; and no trustee,
shareholder, officer or agent of Eastern Enterprises shall be held to any
personal liability in connection with the affairs of said Eastern Enterprises,
but the trust estate only is liable.
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1.2 Proposed Acquisition of EnergyNorth. Eastern and EnergyNorth have
-----------------------------------
entered into an Agreement and Plan of Reorganization ("Merger Agreement"), dated
as of July 14, 1999, as amended by Amendment No. 1 thereto, dated as of November
4, 1999, pursuant to which Eastern has agreed to acquire EnergyNorth through a
merger (the "Merger") of EnergyNorth with a newly-organized subsidiary of
Eastern ("Merger Sub") formed specifically for that purpose. Following the
Merger, Eastern will own all the outstanding common stock of EnergyNorth and
ENGI will remain a wholly-owned subsidiary of EnergyNorth. The Merger has been
approved by the shareholders of EnergyNorth and by the New Hampshire Public
Utilities Commission ("NHPUC"). It does not require approval by Eastern's
shareholders. In addition, the pre-merger notification filing requirements under
the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended ("H-S-R
Act") have been satisfied and the required waiting period under the H-S-R Act
has expired.
The Merger Agreement and Amendment No. 1 thereto are incorporated by
reference as Exhibits B-1 and B-2, respectively, hereto. A copy of the
Registration Statement on Form S-4 filed by Eastern pursuant to the Securities
Act of 1933, as amended, is incorporated by reference as Exhibit C-1 hereto. The
definitive proxy statement of EnergyNorth (the "Proxy Statement") filed by
EnergyNorth on Schedule 14A pursuant to the Securities Exchange Act of 1934, as
amended, is incorporated by reference as Exhibit C-2 hereto.
1.3 Other Related Transaction. On November 4, 1999, subsequent to
--------------------------
entering into the Merger Agreement with EnergyNorth, Eastern, KeySpan
Corporation ("KeySpan"), an exempt holding company pursuant to Section 3(a)(1)
of the Act,4 and ACJ Acquisition LLC, a wholly-owned subsidiary of KeySpan,
entered into an Agreement and Plan of Merger ("KeySpan Merger Agreement"),
pursuant to which KeySpan has agreed to acquire all of the issued and
------------------------
4 See BL Holding Corp., Holding Co. Act Release No. 26875 (May 15, 1998).
2
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outstanding common stock of Eastern in an all-cash transaction (the "KeySpan
Merger").5 Concurrently, Eastern and EnergyNorth entered into Amendment No. 1
to the Merger Agreement (as so amended, the "Amended Merger Agreement"). As
explained in Item 1.5, below, under the Amended Merger Agreement, the
consideration to be paid by Eastern for the shares of EnergyNorth's common stock
will vary depending upon whether the KeySpan Merger Agreement is terminated for
any reason prior to the Effective Time (as defined in the Amended Merger
Agreement).
The indirect acquisition of ENGI by KeySpan as a result of the KeySpan
Merger has also been approved by the NHPUC and is subject to approval by this
Commission. KeySpan has filed a separate application under the Act for approval
of the KeySpan Merger (see File No. 70-9641), and has stated that, following its
acquisition of Eastern, it intends to register as a holding company pursuant to
Section 5 of the Act.
The obligation of Eastern under the Amended Merger Agreement to acquire
EnergyNorth is not conditioned upon KeySpan's acquisition of Eastern, although
the Amended Merger Agreement contemplates that the Merger will close
contemporaneously with the KeySpan Merger. If closing on the KeySpan Merger is
delayed beyond March 31, 2001, EnergyNorth would have the option to terminate
the Merger Agreement or to extend the closing date to be coterminous with the
closing of the KeySpan Merger.
1.4 Description of Eastern and EnergyNorth and Their Respective
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Subsidiaries.
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a. Eastern Enterprises. Eastern conducts all of its business
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through its operating subsidiaries. As indicated above, its gas utility
subsidiaries are:
o Boston Gas Company, which distributes natural gas to
approximately 541,000 customers in Boston and 73 other cities and
towns throughout eastern and central Massachusetts. Boston Gas
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5 See Current Report on Form 8-K of Eastern Enterprises, dated November 8,
1999, in File No. 1-2297, and Current Report on Form 8-K of KeySpan Corporation,
dated November 4, 1999, in File No. 1-14161.
3
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has been wholly-owned by Eastern since 1929 and has been in the
gas business for 177 years, making it the second oldest gas
company in the United States.
o Essex Gas Company, a regulated utility which distributes natural
gas to approximately 44,000 customers in 17 cities and towns in
an area of eastern Massachusetts that is contiguous to Boston
Gas's service territory. Essex Gas has been in business for 147
years and was purchased by Eastern in September 1998.6
o Colonial Gas Company, a regulated utility that distributes
natural gas to approximately 161,000 customers in 24 communities
located in northeastern Massachusetts (contiguous to Boston Gas's
service territory) and on Cape Cod. Colonial Gas has been in
business for 151 years. Eastern completed its acquisition of
Colonial Gas on August 31, 1999.7
The facilities of Boston Gas, Essex Gas and Colonial Gas together include
approximately 10,000 miles of mains and 598,000 service connections, all in
Massachusetts, and liquefied natural gas (LNG) storage facilities located in
Dorchester, Lynn, Salem, Haverhill, Tewksbury and South Yarmouth, Massachusetts.
In the twelve months ended June 30, 2000, the three companies delivered a total
of 157 billion cubic feet ("Bcf") of gas, including gas sold on a "bundled"
basis to retail customers and gas delivered to transportation-only customers.
Most of the gas delivered on the Eastern system is derived from sources outside
of New England, primarily the producing areas of Texas and Louisiana. Gas is
delivered to the Eastern system by interstate pipelines pursuant to long-term
contracts at rates approved by the Federal Energy Regulatory Commission
("FERC"). The Eastern companies currently have firm transportation agreements
------------------------
6 See Eastern Enterprises, Holding Co. Act Release No. 26923 (September 30,
1998).
7 See Eastern Enterprises, et al., supra n 1.
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with Tennessee Gas Pipeline Company ("Tennessee"), Texas Eastern Transmission
Corp. ("Texas Eastern"), Algonquin Gas Transmission Company ("Algonquin") and
several other upstream interstate pipelines. Boston Gas, Essex Gas and Colonial
Gas are subject to regulation by the Massachusetts Department of
Telecommunications and Energy ("MDTE") as to retail rates, transportation rates,
affiliate transactions, securities issuances and other matters.
The following table sets forth key financial information for Boston Gas,
Colonial Gas and Essex Gas as of June 30, 2000 and for the twelve months then
ended:
<TABLE>
<CAPTION>
------------------ ---------------- ------------------ ------------------ ------------------
Company Total Assets Net Utility Plant Operating Revs. Net Income
$mm $mm $mm $mm
------------------ ---------------- ------------------ ------------------ ------------------
<S> <C> <C> <C> <C>
Boston Gas 849.9 587.5 579.6 34.3
------------------ ---------------- ------------------ ------------------ ------------------
Colonial Gas 569.9 281.5 166.9 14.8
------------------ ---------------- ------------------ ------------------ ------------------
Essex Gas 96.6 82.9 46.3 7.7
------------------ ---------------- ------------------ ------------------ ------------------
</TABLE>
Eastern's principal non-utility subsidiaries are:
o Midland Enterprises Inc. ("Midland"), which is primarily engaged,
through wholly-owned subsidiaries, in the operation of a fleet of
towboats, tugboats and barges, principally on the Ohio River and
Mississippi River and their tributaries, the Gulf Intracoastal
Waterway and the Gulf of Mexico. Midland has been operating on the
nation's inland waterways since 1925 and transports dry bulk
commodities, a major portion of which is coal. Its principal barge
line subsidiaries are The Ohio River Company, Orgulf Transport Co.,
Red Circle Transport Co. and Orsouth Transport Co. Approximately 87%
of Midland's total operating revenues are derived from barge
operations. Through other subsidiaries, Midland also performs repair
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work on marine equipment, operates coal dumping terminals and a
phosphate chemical fertilizer terminal, and provides refueling and
barge fleeting services.
o Transgas Inc., an unregulated energy trucking company, which provides
over-the-road transportation of liquefied natural gas, propane and
other commodities. Transgas is the nation's largest over-the-road
transporter of liquefied natural gas.
o ServicEdge Partners, Inc., which offers heating, ventilation and air
conditioning services, primarily to residential customers in eastern
Massachusetts.
o AMR Data Corporation, which sells automated meter reading equipment
and provides related services and support, primarily to municipal
utilities in New England.
For the twelve months ended June 30, 2000, Eastern reported consolidated
gross revenues of $1,101,835,000, of which $792,816,000 (or 72%) were derived
from regulated sales of gas and gas transportation, $281,836,000 (or 25.5%) from
marine transportation (barge and river terminal operations) and $27,182,000
(2.5%) from other operations (primarily heating, ventilation and air
conditioning services), and net income of $62,942,000. At June 30, 2000, Eastern
had $1,945,331,000 in total assets, including net utility plant of $951,938,000,
net property, plant and equipment associated with marine operations of
$313,144,000, and current assets of $268,115,000. At July 20, 2000, Eastern had
issued and outstanding 27,156,450 shares of common stock, par value $1.00 per
share. Eastern's shares are listed for trading on the New York, Boston and
Pacific Stock Exchanges.
b. EnergyNorth. EnergyNorth, a New Hampshire corporation, was
-----------
incorporated in 1982. Its predominant subsidiary, ENGI, distributes natural gas
to approximately 73,000 residential, commercial and industrial customers in 27
cities and towns in southern and central New Hampshire, including Nashua,
Manchester, Concord and Laconia. This area encompasses approximately 922 square
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miles and has a total population of approximately 470,000. ENGI's service area
in southern and central New Hampshire is contiguous to Colonial Gas's service
area in Massachusetts and is within 30 to 85 miles of the greater Boston area.
ENGI owns approximately 1,113 miles of distribution mains and 702 miles of
service connections in this area. In September1999, ENGI was awarded the
franchise to serve the city of Berlin, New Hampshire, a community of about
12,000 inhabitants which is located in the northern part of the state
approximately 100 miles from the rest of ENGI's service area. ENGI has commenced
service to a state-owned correctional institution and anticipates developing the
system to serve other customers in Berlin and surrounding areas.
Like Eastern's gas utility subsidiaries, ENGI purchases most of its gas
from sources outside New England (chiefly the producing areas of Texas and
Louisiana). All of the pipeline gas delivered to ENGI's principal system in
southern and central New Hampshire is transported on the Tennnessee pipeline
system. ENGI also purchases gas from Canadian sources, which is delivered by
TransCanada PipeLines Ltd., Iroquois Gas Transmission System and Portland
Natural Gas Transmission System. ENGI is subject to the regulatory supervision
of the NHPUC as to gas sales and transportation rates, securities issuances and
other matters.
ENGI is also engaged directly in equipment rental and appliance and jobbing
sales, all of which take place entirely within the state of New Hampshire.
For the twelve months ended June 30, 2000, ENGI reported consolidated
operating revenues of $92,530,000, and net income of $3,470,000. At June 30,
2000, ENGI had total assets of $153,811,000, including net utility plant of
$118,312,000.
EnergyNorth's principal non-utility subsidiaries are:
o EnergyNorth Propane, Inc. ("ENPI"), which sells propane to over 15,300
customers in more than 150 communities located primarily within a
50-mile radius of Concord, New Hampshire. Propane distribution does
7
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not require a regulatory franchise. ENPI operates from separate
headquarters and plant facilities that it owns in Concord, New
Hampshire and has distribution centers in Bedford and Gilford, New
Hampshire. Propane is transported in bulk supply by trucks to and from
ENPI's distribution centers. ENPI owns a 49% interest in VGS Propane,
LLC ("VGSP"), a joint venture with Northern New England Gas
Corporation, which owns the other 51%. VGSP is a Vermont limited
liability company that provides propane service to approximately
10,000 customers in the state of Vermont.
o ENI Mechanicals, Inc., which owns all of the outstanding stock of
Northern Peabody, Inc. (NPI) and Granite State Plumbing and Heating,
Inc. (GSPH). NPI and GSPH are mechanical contractors engaged in the
design, construction and service of plumbing, heating, ventilation,
air conditioning and process piping systems. They serve commercial,
industrial and institutional customers in northern and central New
England. NPI and GSPH operate from separate headquarters and
facilities located in Manchester, New Hampshire and Goffstown, New
Hampshire, respectively.
o EnergyNorth Realty, Inc., which is engaged primarily in owning and
leasing land and a building located at 1260 Elm Street in Manchester,
New Hampshire, where EnergyNorth and all of its subsidiaries, except
ENPI and ENMI, maintain corporate offices.
o Broken Bridge Corp., which owns undeveloped land located in Concord,
New Hampshire, that was acquired for utility purposes.
For the twelve months ended June 30, 2000, EnergyNorth reported
consolidated operating revenues of $146,624,000, of which $92,530,000 (or 63.1%)
represented revenues from utility operations, $14,450,000 (9.9%) revenues from
propane sales, and $39,644,000 (27.0%) revenues from mechanical contracting
8
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services. Net income for the twelve months ended June 30, 2000 was $2,888,000.
At June 30, 2000, EnergyNorth had $171,064,000 in total assets, including net
utility plant of $118,312,000, net non-utility property of $8,349,000, and
current assets of $28,275,000. As of August 3, 2000, EnergyNorth had issued and
outstanding 3,322,903 shares of common stock, par value $1.00 per share. Its
shares are listed and traded on the New York Stock Exchange.
1.5. Principal Terms of the Amended Merger Agreement. As indicated,
-----------------------------------------------
under the terms of the Amended Merger Agreement, Merger Sub, a wholly-owned
subsidiary of Eastern, will merge with EnergyNorth, as a result of which
EnergyNorth will become a wholly-owned subsidiary of Eastern. The Amended Merger
Agreement sets forth the terms of two different merger structures that would
apply depending upon whether the KeySpan Merger Agreement is terminated prior to
the Effective Time of the Merger. The Effective Time is the date upon which the
Merger is consummated by filing articles of merger with the Secretary of State
of the State of New Hampshire following closing of the transaction. Either
Eastern or EnergyNorth may terminate the Amended Merger Agreement if, among
other things, the Merger has not been consummated by March 31, 2001 (subject to
extension to September 30, 2001 if specified conditions precedent remain
unsatisfied).
If, as is expected, the Merger and the KeySpan Merger close
contemporaneously, then Merger Sub will be merged with and into EnergyNorth,
with EnergyNorth as the surviving corporation. In such case, each share of
common stock of EnergyNorth issued and outstanding immediately prior to the
Effective Time (other than treasury shares), will be canceled and extinguished
and automatically converted into the right to receive $61.13 in cash, without
interest. This amount is subject to increase if, for any reason, the
consideration to be paid for each share of Eastern common stock in the KeySpan
Merger is increased above $64.00 per share. Based on the number of shares of
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EnergyNorth common stock outstanding on June 30, 2000, the total consideration
paid in the Merger (assuming no increase) would be approximately $203.1 million.
The transaction would be fully taxable to EnergyNorth's shareholders in this
case.
If, on the other hand, the KeySpan Merger Agreement is terminated prior to
the Effective Time, EnergyNorth will be merged with and into Merger Sub, with
Merger Sub as the surviving corporation having all the rights, interests, and
obligations of EnergyNorth. Merger Sub will change its name to "EnergyNorth,
Inc." and remain a wholly-owned subsidiary of Eastern. ENGI will remain a
wholly-owned subsidiary of "new" EnergyNorth.
Under this merger structure, holders of EnergyNorth common stock will
receive cash and common stock of Eastern having an expected aggregate value of
approximately $182.7 million based on the number of shares of EnergyNorth common
stock outstanding on March 20, 2000 and the reported share price of Eastern
common stock on the NYSE on such date ($58.9375). The actual value will depend
on the market price of Eastern common stock and the number of shares of
EnergyNorth common stock outstanding on the date the Merger is completed. A
total of 49.9% of the outstanding shares of EnergyNorth common stock will be
exchanged for cash and the remainder will be exchanged for shares of Eastern
common stock. Each share of EnergyNorth common stock exchanged for cash will
entitle the holder to receive $47.00. Each share which is not exchanged for cash
will entitle the holder to receive that number of shares of Eastern common stock
having a value of $47.00 based on the average of the daily per share weighted
averages of the trading prices of the Eastern common stock reported in the NYSE
Composite Transactions over the ten trading day period ending on the third
trading day before the effective date of the Merger, so long as that weighted
average price is not less than $36.00 or higher than $44.00. If this average is
less than $36.00, each share of EnergyNorth common stock not exchanged for cash
will entitle the holder to receive approximately 1.3056 shares of Eastern common
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stock. On the other hand, if this average is higher than $44.00, each share of
EnergyNorth common stock not exchanged for cash will entitle the holder thereof
to receive approximately 1.0682 shares of Eastern common stock. Accordingly, if
this average is below $36.00 or above $44.00, the actual value of the number of
Eastern shares received for an EnergyNorth share would be less than or more than
$47.00.
Based on the average of the daily weighted average price per share of
Eastern common stock on the NYSE for the ten trading day period ended on January
24, 2000 (which was above $44.00) and the number of shares of EnergyNorth common
stock outstanding on March 20, 2000, Eastern would issue approximately 1,778,000
shares of its common stock in the Merger. The cash portion of the consideration
would equal approximately $78 million. Based upon the number of shares of the
two companies outstanding on March 20, 2000, EnergyNorth's shareholders would
hold approximately 6.1% of Eastern's outstanding common stock following the
Merger.
The Merger of Eastern and EnergyNorth on a stand-alone basis (that is,
assuming the KeySpan Merger Agreement is terminated before the Effective Time)
has been structured to qualify as a reorganization under Section 368(a) of the
Internal Revenue Code. Accordingly, an EnergyNorth stockholder who exchanges his
or her shares solely for Eastern common stock will not recognize any gain or
loss. An EnergyNorth stockholder who receives a combination of cash and Eastern
common stock in the Merger will not recognize any loss but will recognize gain,
if any, in an amount equal to the lesser of the amount of the cash received and
the total gain realized by such stockholder in the Merger. An EnergyNorth
stockholder who receives only cash will recognize the full amount of any gain or
loss. Under either Merger structure, the transaction will be accounted for by
Eastern using the purchase method of accounting for a business combination in
accordance with generally accepted accounting rules. Under this method of
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accounting, the assets and liabilities of EnergyNorth, including intangible
assets, will be recorded at their fair values, and the excess of the
consideration paid over those amounts will be recorded as goodwill and amortized
over 40 years. Consistent with the Commission's Staff Accounting Bulletin No.
54, Topic 5J, such goodwill will be "push downed" to EnergyNorth's subsidiaries.
Assuming that the Merger and the KeySpan Merger close contemporaneously, it is
currently estimated that $124 million of goodwill created in the transaction
would be allocated to ENGI.
ITEM 2. FEES, COMMISSIONS AND EXPENSES.
------------------------------
The estimated fees and expenses in connection with the proposed transaction
are set forth in Exhibit J hereto.
ITEM 3. APPLICABLE STATUTORY PROVISIONS.
-------------------------------
Sections 9(a) and 10 of the Act are applicable to the acquisition by
Eastern of the voting securities of EnergyNorth. Section 3(a)(1) of the Act is
applicable to Eastern's and EnergyNorth's exemption from registration under the
Act.
3.1. Compliance with Section 10.
--------------------------
The proposed transaction meets all the substantive requirements of Section
10 of the Act. Specifically, the Commission should find that the acquisition
complies with subsections (c) and (f) of Section 10 on the basis of the
following:
a. The Acquisition is Lawful Under Section 8 of the Act and Is Not
---------------------------------------------------------------
Detrimental to the Carrying Out of the Provisions of Section 11.
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ENGI, Boston Gas, Colonial Gas and Essex Gas are all retail gas
distribution companies, with no electric utility assets or operations. Further,
the transaction will not be detrimental to the carrying out of the provisions of
Section 11 which, by its terms, applies only to registered holding companies. In
this case, as discussed below, both Eastern and EnergyNorth will be exempt from
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registration under the Act pursuant to the "intrastate" exemption provided in
Section 3(a)(1).
b. The Acquisition Will Serve the Public Interest by Tending Toward the
--------------------------------------------------------------------
Economical and Efficient Development of an Integrated Public-Utility
--------------------------------------------------------------------
System.
------
Under Section 10(c)(2), the Commission must affirmatively find that the
acquisition of EnergyNorth by Eastern "will serve the public interest by tending
towards the economical and the efficient development of an integrated
public-utility system . . . ." An "integrated public-utility system" is defined
in Section 2(a)(29), to mean:
(B) As applied to gas utility companies, a system consisting of one or more
gas utility companies which are so located and related that substantial
economies may be effectuated by being operated as a single coordinated
system confined in its operations to a single area or region, in one or
more States, not so large as to impair (considering the state of the art
and the area or region affected) the advantages of localized management,
efficient operation, and the effectiveness of regulation: Provided, That
gas utility companies deriving natural gas from a common source of supply
may be deemed to be included in a single area or region.
The gas utility operations of ENGI, when combined with those of Boston Gas,
Colonial Gas and Essex Gas, will constitute an integrated gas utility system
within the meaning of Section 2(a)(29)(B) of the Act. As the map attached as
Exhibit E shows, the service areas of ENGI, Colonial Gas, Boston Gas and Essex
Gas are contiguous (with the exception of a small portion of ENGI's service area
in northern New Hampshire) and confined to a single area or region. Moreover,
all four companies receive their natural gas supplies from substantially the
same sources.
As a result of the Merger, ENGI will be able to achieve cost reductions in
the corporate and administrative areas through the elimination of redundant job
functions. Specifically, the proposed Merger will provide an opportunity to
consolidate finance, accounting, information services, marketing, human
resources, public and shareholder relations and gas supply activities. Eastern
and ENGI estimate the consolidation of the two companies will result in the
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reduction of 62 positions, including 47 management and 15 non-management
positions. The direct wage and salary cost reductions associated with these
positions is approximately $3.3 million annually. It is also estimated that the
elimination of employee benefits associated with these positions would produce
approximately $900,000 of additional annual cost savings.
Moreover, the integration of corporate and administrative functions of
Eastern and EnergyNorth is expected to reduce non-labor costs by approximately
$1.5 million annually through the consolidation of overlapping or duplicative
programs and expenditures relating to insurance, employee benefits
administration, audit and consulting fees, shareholder services,
information-systems expenses, advertising, vehicle expense, legal fees and
banking and financing costs. Such cost savings will be available only because of
the Merger and the resulting ability to coordinate certain corporate governance
activities that are common to the operations of ENGI and Eastern's gas
distribution operations. In total, therefore, it is estimated that operations
and maintenance ("O&M") expense savings of $5.7 million annually are potentially
attainable in the near term as a result of the Merger.
In addition, the information technology employed by Eastern will provide an
important tool for increasing the efficiency of ENGI's operations. Eastern has
made significant investments in information technology, including software
applications, hardware and infrastructure, which will be extended to the
operations of ENGI as a result of the Merger. These investments have enhanced
customer service, improved productivity and enabled the implementation of
comprehensive customer-choice programs. Combining the information processing
needs of ENGI with the gas distribution operations of Eastern will enable
EnergyNorth to avoid incurring duplicate expenditures. ENGI will be able to
avoid planned development and/or modification of a number of systems, including:
(1) software to automate the dispatch function; (2) an enterprise level
reporting and data warehousing system to enhance management reporting; (3) an
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upgrade of the telephone system and call center; (4) an upgrade of the
infrastructure to accommodate internet/intranet applications; (5) software for
payroll/human resource functions; (6) software and conversion costs to automate
the mapping functions; (7) development and implementation of disaster-recovery
capability; (8) modifications to existing customer information-system and
gas-supply systems to expand the customer choice program; and (9) replacement of
the customer-information system. It is estimated that ENGI would have to incur
costs of approximately $4.3 million on a stand-alone basis to implement and/or
modify these necessary systems.
c. The Merger's Compliance with Relevant New Hampshire Law.
-------------------------------------------------------
As indicated, the Merger has been approved by the NHPUC under applicable
provisions of the New Hampshire public utility code. A copy of the NHPUC's order
approving the Merger, dated May 8, 2000, is filed herewith as Exhibit D-2.
Under applicable New Hampshire corporation laws, the Merger requires
approval by the Board of Directors, which has been given, and by the holders of
a majority of all of the outstanding common stock of EnergyNorth. EnergyNorth's
shareholders approved the Merger at EnergyNorth's annual meeting held on April
27, 2000.
In addition, there is no basis for making any of the negative findings that
would prevent approval of the proposed acquisition under subsection (b) of
section 10, for the following reasons:
d. The Acquisition Will Not Tend Toward Any Interlocking Relations or
------------------------------------------------------------------
Undue Concentration of Control of Public-Utility Companies.
----------------------------------------------------------
Following the Merger, ENGI will be an indirect wholly-owned subsidiary of
Eastern. As usual in holding company systems, Eastern and ENGI may have officers
and directors in common, but that mode of common management of the integrated
system of subsidiaries is not the sort of "interlocking relationship" that the
Act is intended to prevent.
15
<PAGE>
The combined operations of ENGI, Boston Gas, Colonial Gas, and Essex Gas
will operate in Massachusetts and a mostly contiguous area of New Hampshire and
will be subject to effective regulation by the MDTE and NHPUC. Boston Gas,
Colonial Gas, and Essex Gas together currently serve approximately 746,000
retail gas customers in 115 cities and towns in eastern and central
Massachusetts. The acquisition of ENGI will add only 73,000 customers to
Eastern's existing system, representing a 10% increase in terms of the number of
customers served. Eastern and its subsidiaries had total assets of
$1,945,331,000 at June 30, 2000 and consolidated revenues of $1,101,835,000 for
the twelve-month period then ended. The acquisition of EnergyNorth will
represent an increase in size of Eastern of 13.3% or less based on such
financial comparisons.
e. The Consideration To Be Paid Is Reasonable and Bears a Fair Relation
--------------------------------------------------------------------
to the Value of the Utility Assets Underlying the Securities To Be
------------------------------------------------------------------
Acquired.
--------
As described in Item 1.5, above, the total consideration to be paid by
Eastern for EnergyNorth will depend upon whether the KeySpan Merger Agreement is
terminated prior to the Effective Time. In the stand-alone Merger structure
(i.e., assuming the KeySpan Merger is terminated), EnergyNorth's shareholders
will receive cash and common stock of Eastern having an expected aggregate value
of approximately $182.7 million, based on the number of shares of EnergyNorth
common stock outstanding on March 20, 2000 and a closing share price of Eastern
common stock on such date of $58.9375. In the aggregate, this would represent a
premium of approximately $84.1 million (or 85%) to EnergyNorth's shareholders,
based on the closing price for EnergyNorth's shares on July 14, 1999, the day
before the Merger was announced. If, on the other hand, the Merger and the
KeySpan Merger close contemporaneously, the aggregate cash consideration
received by EnergyNorth's shareholders, assuming no adjustments, would be
approximately $203.1 million, representing a premium to EnergyNorth's
shareholders of about $104.5 million (or 106%), based on the closing price for
EnergyNorth's shares on July 14, 1999.
16
<PAGE>
The purchase price resulted from arms-length negotiation and was deemed
acceptable by EnergyNorth after EnergyNorth had had discussions with other
potentially interested parties. In addition, the investment banking firm of
Salomon Smith Barney has delivered an opinion to the Board of Directors of
EnergyNorth stating that, based on various financial comparisons, the
consideration in the Merger will be fair to the stockholders of EnergyNorth from
a financial point of view. Salomon Smith Barney's fairness opinion is appended
to the Proxy Statement as Annex B.
In addition, Eastern expects that ENGI's customers will benefit from an
approximate 2.2% savings in their burner tip cost of gas as of the date of the
Merger as a result of the combination of the operations of ENGI, Colonial Gas,
Boston Gas, and Essex Gas. These gas cost savings will be passed through to ENGI
customers through the regular semi-annual cost of gas adjustment that is
reviewed and approved by the NHPUC. Under New Hampshire law, retail gas rates
are regulated by the NHPUC, which has full power to examine transactions with
affiliates and to allow or disallow intercompany costs and charges in the
rate-setting process.8 Thus, the financial effect of the Merger on customers of
ENGI is subject to effective regulation by the NHPUC.
f. The Acquisition Will Not Unduly Complicate the Capital Structure of
--------------------------------------------------------------------
Eastern's Holding-Company System and Will Not Be Detrimental to the
-------------------------------------------------------------------
Public Interest, the Interest of Investors or Consumers, or the Proper
----------------------------------------------------------------------
Functioning of the Holding-Company System.
-----------------------------------------
In the stand-alone Merger, the consideration paid will consist of either
all cash or a combination of cash and shares of Eastern's single class of common
stock, which is publicly-traded on the New York, Pacific, and Boston Stock
Exchanges. There will be no preferred or senior securities of Eastern issued in
the transaction. Following the Merger, EnergyNorth will be a wholly-owned
subsidiary of Eastern, as Boston Gas, Colonial Gas and Essex Gas already are.
------------------------
8 See N.H. REV. STAT. ANN. CH.ss.ss.378:27 and 366:3 - 7 (1998).
17
<PAGE>
Moreover, the transaction will be earnings neutral to Eastern's shareholders to
the extent that cost savings related to Merger synergies are retained. The
interests of gas consumers are protected by the jurisdiction of the NHPUC.
Finally, as stated above, the acquisition will serve the public interest by
promoting the economical and efficient development of an integrated gas utility
system.
Set forth below are summaries of the capital structures of Eastern and
EnergyNorth as of December 31, 1999, and the pro forma consolidated capital
structure of Eastern (assuming the Merger had occurred on December 31, 1999):
Eastern and EnergyNorth Historical Consolidated Capital Structures
(dollars in millions)
Eastern EnergyNorth
----------- --------------
Common stock equity $754.6 53.2% $52.6 43.2%
Preferred stock of 26.5 1.8 -- 0
subsidiary
Long-term debt 515.2 36.3 45.6 37.4
Short-term debt */ 123.3 8.7 23.6 19.4
- ----- ----- ----- -----
Total $1,419.6 100.0% $121.8 100.0%
Eastern Pro Forma Consolidated Capital Structure
(dollars in millions) (unaudited)
Common stock equity $832.9 51.9%
Preferred stock of subsidiary 26.5 1.6
Long-term debt 597.7 37.3
Short-term debt */ 146.9 9.2
- ----- ----
Total $1,604.0 100.0%
*/ Includes current portion of long-term debt.
-
18
<PAGE>
As the foregoing shows, if the stand-alone Merger were implemented,
Eastern's pro forma consolidated common equity to total capitalization ratio of
51.9% will comfortably exceed the "traditionally acceptable 30% level."9 See
Northeast Utilities, 50 S.E.C. at 440, n. 47. Reference is made to File No.
70-9641 for a presentation of the pro forma capitalization of KeySpan, Eastern
and EnergyNorth in the event that the Merger and the KeySpan Merger close
contemporaneously.
In addition, the long-term debt securities of Boston Gas and Colonial Gas
are currently rated at the investment grade level, as established by a
nationally recognized statistical rating organization, as that term is used in
paragraphs (c)(2)(vi)(E), (F) and (H) of Rule 15c3-1 under the Securities
Exchange Act of 1934.10
3.2 Exemption under Section 3(a)(1). Section 3(a)(1) provides that
-------------------------------
"unless and except insofar as it finds the exemption detrimental to the public
interest or the interests of investors or consumers" the Commission shall exempt
from registration any holding company and every subsidiary thereof, if:
such holding company, and every subsidiary company thereof which is a
public-utility company from which such holding company derives, directly,
or indirectly, any material part of its income, are predominantly
intrastate in character and carry on their business substantially in a
single State in which such holding company and every such subsidiary
company thereof are organized.11
Following the Merger, EnergyNorth will continue to be a holding company
incorporated in New Hampshire, the same state in which its sole public utility
subsidiary, ENGI, is incorporated and in which ENGI conducts all of its public
------------------------
9 Under section 7(d)(1) of the Act, the Commission generally has required a
registered holding company system and its public-utility subsidiaries to
maintain a 65/30 debt/common equity ratio, the balance generally being preferred
equity. Such debt/equity capitalization requirement was included in Rule 52, as
originally adopted, as applied to securities issued by public-utility
subsidiaries, but was eliminated in 1992.
10 The long-term debt securities of Boston Gas and Colonial Gas are
currently A-rated by Moody's and Standard & Poor's. Essex Gas and ENGI do not
have any long-term debt ratings. Eastern cannot assess the likely impact of the
KeySpan Merger on the Boston Gas and Colonial Gas debt ratings.
11 The interstate character of an applicant's non-utility businesses is not
considered in determining whether a holding company is entitled to an exemption
under Section 3(a)(1). See Eastern Gas and Fuel Associates, 30 S.E.C. 834, 848
(n. 19) (1950).
19
<PAGE>
utility operations. Accordingly, in its capacity as a holding company,
EnergyNorth will be entitled to an exemption under Section 3(a)(1) of the Act.
Following the Merger, ENGI will also be an indirect subsidiary of Eastern,
a holding company organized in Massachusetts, which is the same state in which
Eastern's current public utility subsidiaries are incorporated and in which they
conduct all of their public utility operations. Nevertheless, based on the
information presented below, the Commission should find that: (1) ENGI will not
constitute a "material" public utility subsidiary of Eastern; and, (2) following
the Merger, Eastern and its public utility subsidiaries will be "predominantly
intrastate in character and carry on their business substantially in a single
State," namely, Massachusetts.
a. Eastern Will Not Derive a Material Part of its Income from ENGI.
----------------------------------------------------------------
In recent cases, the Commission has interpreted Section 3(a)(1) of the Act
flexibly in order to permit exempt "intrastate" holding companies to acquire
small out-of-state utilities without loss of their exemptions.12 In determining
whether an out-of-state utility subsidiary is "material" for purposes of Section
3(a)(1), the Commission looks at all sources of a parent holding company's
income.13 Thus, the Commission may determine a public utility subsidiary
company's "materiality" for purposes of Section 3(a)(1) based on various
criteria, including gross revenues, net operating revenue, utility assets,
number of customers and volume of gas or electricity distributed or sold.
Provided in the table below are the gross revenues, net operating revenues,
net income, assets and numbers of customers of Eastern's current public utility
subsidiaries (Boston Gas, Colonial Gas and Essex Gas) and ENGI, showing the
------------------------
12 See NIPSCO Industries, Inc., Holding Co. Act Release No. 26975, 69 SEC
Docket 245 (February 11, 1999) (hereinafter referred to as "NIPSCO").
13 69 SEC Docket at 255.
20
<PAGE>
contribution of ENGI to each category on a pro forma combined basis (before
intercompany eliminations) for the years 1997, 1998, and 1999.
21
<PAGE>
COMPARISON OF ENGI TO COMBINED EASTERN GAS DISTRIBUTION UTILITIES
(IN THOUSANDS)
<TABLE>
<CAPTION>
------------ ----------------- ----------------- ----------------- ----------------------- ----------------- -----------------------
Boston Gas Colonial Gas Essex Gas Total Eastern Gas ENGI Pro Forma Combined
Distribution
------------ ----------------- ----------------- ----------------- ----------------------- ----------------- -----------------------
1999 1998 1997 1999 1998 1997 1999 1998 1997 1999 1998 1997 1999 1998 1997 1999 1998 1997
------------ ----- ----- ----- ----- ----- ----- ----- ----- ----- ------- ------- ------- ----- ----- ----- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Revenues 592.7 610.3 700.9 176.7 168.0 187.1 44.1 56.8 53.5 813.5 835.1 941.5 79.3 80.2 94.8 892.8 915.3 1,036.3
($mm)
------------ ----- ----- ----- ----- ----- ----- ----- ----- ----- ------- ------- ------- ----- ----- ----- ------- ------- -------
% of Pro 66% 67% 68% 20% 18% 18% 5% 6% 5% 91% 91% 91% 9% 9% 9% 100% 100% 100%
Forma
------------ ----- ----- ----- ----- ----- ----- ----- ----- ----- ------- ------- ------- ----- ----- ----- ------- ------- -------
Net 297.7 285.8 302.4 85.3 79.9 84.7 25.9 26.2 26.3 408.9 391.9 413.4 40.7 37.7 39.4 449.6 429.6 452.8
Operating
Revenues
($mm)
------------ ----- ----- ----- ----- ----- ----- ----- ----- ----- ------- ------- ------- ----- ----- ----- ------- ------- -------
% of Pro 66% 66% 67% 19% 19% 19% 6% 6% 6% 91% 91% 91% 9% 9% 9% 100% 100% 100%
Forma
------------ ----- ----- ----- ----- ----- ----- ----- ----- ----- ------- ------- ------- ----- ----- ----- ------- ------- -------
Net Income 37.9 36.2 36.6 11.1 13.4 15.7 5.9 5.4 4.0 54.9 55.0 56.3 3.8 4.1 6.4 58.7 59.1 62.7
($mm)
------------ ----- ----- ----- ----- ----- ----- ----- ----- ----- ------- ------- ------- ----- ----- ----- ------- ------- -------
% of Pro 65% 61% 58% 19% 23% 25% 10% 9% 6% 94% 93% 90% 6% 7% 10% 100% 100% 100%
Forma
------------ ----- ----- ----- ----- ----- ----- ----- ----- ----- ------- ------- ------- ----- ----- ----- ------- ------- -------
Assets ($mm) 902.8 859.2 878.2 345.0 385.1 373.5 97.2 97.9 92.7 1,345.0 1,342.2 1,344.4 158.0 142.6 136.4 1,503.0 1,484.8 1,480.8
------------ ----- ----- ----- ----- ----- ----- ----- ----- ----- ------- ------- ------- ----- ----- ----- ------- ------- -------
% of Pro 60% 57% 59% 23% 26% 26% 6% 7% 6% 89% 90% 91% 11% 10% 9% 100% 100% 100%
Forma
------------ ----- ----- ----- ----- ----- ----- ----- ----- ----- ------- ------- ------- ----- ----- ----- ------- ------- -------
Customers 541 535 530 158 155 150 43 44 42 742 734 722 73 70 68 815 804 790
(000s)
------------ ----- ----- ----- ----- ----- ----- ----- ----- ----- ------- ------- ------- ----- ----- ----- ------- ------- -------
% of Pro 67% 67% 67% 19% 19% 19% 5% 5% 5% 91% 91% 91% 9% 9% 9% 100% 100% 100%
Forma
------------ ----- ----- ----- ----- ----- ----- ----- ----- ----- ------- ------- ------- ----- ----- ----- ------- ------- -------
</TABLE>
NOTES:
o Boston Gas, Colonial Gas, and ENGI as of 12/31. Essex Gas as of 12/31/99;
period 12/1/97 to 12/31/98, excluding the month ending 9/30/98; and
8/31/97.
o Colonial Gas income excludes Transgas earnings and merger expenses, and
Colonial Gas assets excludes non-utility capital assets, Transgas total
assets (1998 and 1997) and net goodwill on Colonial Gas's books (1999).
o Boston Gas net earnings exclude unbilled revenue adoption in 1998.
o ENGI excludes propane gas customers of EN Propane.
22
<PAGE>
Eastern will not derive a "material" part of its income from ENGI
regardless of the financial yardstick used to compare size. ENGI's net operating
revenues (the financial measurement which the Commission found to be
"particularly appropriate" in NIPSCO) represents, on a pro forma basis, 9% of
the combined net operating revenues of Eastern's utility subsidiaries in each of
the three-years 1997 - 1999. In NIPSCO, the Commission considered pro forma
percentages of 11.2%, 10.8%, and 10.8% over a three-year period not to be
"material."14 Moreover, in this case, the other financial and operating
comparisons of size are in the same range as the percentage based on net
operating revenue (generally 9% or lower on average for the three years). In
NIPSCO, these percentages were in some cases substantially higher.
In NIPSCO, the Commission also considered the existence of affirmative
state regulation to be a significant factor in its decision to grant an
exemption under Section 3(a)(1) to a holding company seeking to acquire an
out-of-state subsidiary.15 In this case, Eastern's agreement to acquire
EnergyNorth has been approved by the NHPUC.
b. After the Acquisition of EnergyNorth, Eastern and its Utility
-------------------------------------------------------------
Subsidiaries Will Remain "Predominantly Intrastate In Character and
-------------------------------------------------------------------
Carry On Their Business Substantially" in Massachusetts.
-------------------------------------------------------------
After the Merger, Eastern and its public utility subsidiaries will remain
"predominantly intrastate in character and carry on their business substantially
in a single State," namely, Massachusetts. The only out-of-state (i.e.,
non-Massachusetts) utility operations will be those conducted by ENGI. As the
table above shows, Eastern will derive about 9%, on average, of its pro forma
net utility operating revenues from operations outside of Massachusetts, which
is substantially lower than the 13.2% that the Commission found acceptable in
NIPSCO.
------------------------
14 69 SEC Docket at 256.
15 Id.
23
<PAGE>
ITEM 4. REGULATORY APPROVAL.
-------------------
The NHPUC has approved the Merger and certain other matters in connection
therewith. Included with this Application/Declaration as Exhibit D-1 is a copy
of the joint Petition filed by ENGI, Eastern and KeySpan, dated December 3,
1999, with the NHPUC. The NHPUC order approving the Merger, dated May 8, 2000,
is filed as Exhibit D-2.16 The applicable notification and waiting period
requirements under the H-S-R Act have also been satisfied. No other state
regulatory commission and no other federal commission (other than this
Commission) has jurisdiction over the proposed transaction.
ITEM 5. PROCEDURE.
---------
Eastern requests that the Commission issue an order approving the Merger as
soon as its rules allow. It is also requested that the Commission's order
confirm that Eastern will continue to be exempt from registration under the Act
pursuant to Section 3(a)(1) of the Act following the Merger, and, as well, that
EnergyNorth will continue to be entitled to exemption under Section 3(a)(1) in
its capacity as a holding company, subject to the acknowledgement that neither
company will be exempt from any provision of the Act the will apply to them as
subsidiary companies of KeySpan.
The applicants (i) waive a recommended decision by an administrative law
judge or other responsible officer of the Commission, (ii) hereby specify that
the Division of Investment Management may assist in the preparation of the
Commission's decision, unless such Division opposes the matters proposed herein,
and (iii) hereby request that there be no 30-day waiting period between the date
of issuance of the Commission's order and the date on which it is to become
effective.
------------------------
16 The NHPUC order approved Eastern's acquisition of ENGI, as well as
KeySpan's indirect acquisition of ENGI.
24
<PAGE>
ITEM 6. EXHIBITS AND FINANCIAL STATEMENTS.
---------------------------------
a. EXHIBITS.
A-1 Declaration of Trust of Eastern, dated as of July 18, 1929,
as amended through April 27, 1989 (Incorporated herein by
reference to Exhibit 3.1 to Eastern's Quarterly Report on
Form 10-Q for the quarter ended June 30, 1989 in File No.
1-2297) (Previously filed).
A-2 By-laws of Eastern, as amended through February 24, 1999
(Incorporated herein by reference to Exhibit 2.3 to
Eastern's Annual Report on Form 10-K for the year ended
December 31, 1998 in File No. 1-2297) (Previously filed).
A-3 Articles of Incorporation of EnergyNorth, as amended
February 22, 1996 (Incorporated herein by reference to
Exhibit 3.1 to EnergyNorth's Quarterly Report on Form 10-Q
for the quarter ended March 31, 1996 in File No. 1-11441)
(Previously filed).
A-4 By-Laws of EnergyNorth, as amended February 3, 1999
(Incorporated herein by reference to Exhibit 4 to
EnergyNorth's Post-Effective Amendment No. 2 to Registration
Statement on Form S-3, dated November 21, 1996 in File No.
33-58127) (Previously filed).
B-1 Agreement and Plan of Reorganization, dated as of July 14,
1999 (Incorporated herein by reference to Exhibit 2.0 to
EnergyNorth's Annual Report on Form 10-K for the fiscal year
ended September 30, 1999 in File No. 1-11441) (Previously
filed).
B-2 Amendment No. 1 to Agreement and Plan of Reorganization,
dated as of November 4, 1999 (Incorporated herein by
reference to Exhibit 2.1 to EnergyNorth's Annual Report on
Form 10-K for the fiscal year ended September 30, 1999 in
File No. 1-11441) (Previously filed).
C-1 Registration Statement on Form S-4, including all financial
statements and exhibits thereto, with respect to common
stock of Eastern (including the Preliminary Proxy Statement
of EnergyNorth) (Incorporated by reference to File No.
333-95693) (Previously filed).
C-2 Definitive Proxy Statement of EnergyNorth on Schedule 14A
(Incorporated by reference to File No. 001-11441).
D-1 Joint Petition of ENGI, Eastern and KeySpan filed with the
New Hampshire Public Utilities Commission, dated December 3,
1999. (Previously filed).
D-2 Copy of order of New Hampshire Public Utilities Commission,
dated May 8, 2000. (Previously filed).
25
<PAGE>
E Map of service territories of ENGI, Colonial Gas, Boston
Gas, and Essex Gas. (Paper format filing) (Previously
filed).
F Opinion of Counsel.
G-1 Financial Data Schedule, per book., of Eastern.
(Incorporated herein by reference to Exhibit 27.1 of
Eastern's Quarterly Report on Form 10-Q for the quarter
ended June 30, 2000 in File No. 1-2297).
G-2 Financial Data Schedule, per book., of EnergyNorth.
(Incorporated herein by reference to Exhibit 27 of
EnergyNorth's Quarterly Report on Form 10-Q for the quarter
ended June 30, 2000 in File No. 1-11441).
H Proposed Form of Federal Register Notice. (Previously
filed).
I-1 Organizational Chart of Eastern and Subsidiaries.
(Previously filed).
I-2 Organizational Chart of EnergyNorth and Subsidiaries.
(Previously filed).
J Schedule of Estimated Fees, Commissions and Expenses.
(Previously filed).
K Non-Utility Subsidiaries of Eastern and EnergyNorth.
(Previously filed).
b. FINANCIAL STATEMENTS.
--------------------
FS-1 Consolidated Balance Sheet of Eastern and Subsidiaries as of
December 31, 1999 (Incorporated herein by reference to
Eastern's Annual Report on Form 10-K for the year ended
December 31, 1999 in File No. 1-2297).
FS-2 Consolidated Statement of Operations of Eastern and
Subsidiaries for the year ended December 31, 1999
(Incorporated herein by reference to Eastern's Annual Report
on Form 10-K for the year ended December 31, 1999 in File
No. 1-2297).
FS-3 Consolidated Balance Sheet of Eastern and Subsidiaries as of
June 30, 2000 (Incorporated herein by reference to Eastern's
Quarterly Report on Form 10-Q for the period ended June 30,
2000 in File No. 1-2297).
FS-4 Consolidated Statement of Operations of Eastern and
Subsidiaries for the twelve months ended June 30, 2000
(Filed herewith).
FS-5 Consolidated Balance Sheet of Boston Gas and Subsidiaries as
of December 31, 1999 (Incorporated herein by reference to
Boston Gas' Annual Report on Form 10-K for the year ended
December 31, 1999 in File No. 2-23416).
26
<PAGE>
FS-6 Consolidated Statement of Earnings of Boston Gas and
Subsidiaries for the year ended December 31, 1999
(Incorporated herein by reference to Boston Gas' Annual
Report on Form 10-K for the year ended December 31, 1999 in
File No. 2-23416).
FS-7 Consolidated Balance Sheet of Boston Gas and Subsidiaries as
of June 30, 2000 (Incorporated herein by reference to Boston
Gas' Quarterly Report on Form 10-Q for the period ended June
30, 2000 in File No. 2-23416).
FS-8 Consolidated Statement of Earnings of Boston Gas and
Subsidiaries for the twelve months ended June 30, 2000
(Filed herewith).
FS-9 Consolidated Balance Sheet of Colonial Gas and Subsidiaries
as of December 31, 1999 (Incorporated herein by reference to
Colonial Gas' Annual Report on Form 10-K for the year ended
December 31, 1999 in File No. 0-10007).
FS-10 Consolidated Statement of Earnings of Colonial Gas and
Subsidiaries for the year ended December 31, 1999
(Incorporated herein by reference to Colonial Gas' Annual
Report on Form 10-K for the year ended December 31, 1999 in
File No. 0-10007).
FS-11 Consolidated Balance Sheet of Colonial Gas and Subsidiaries
as of June 30, 2000 (Incorporated herein by reference to
Colonial Gas' Quarterly Report on Form 10-Q for the period
ended June 30, 2000 in File No. 0-10007).
FS-12 Consolidated Statement of Earnings of Colonial Gas and
Subsidiaries for the twelve months ended June 30, 2000
(Filed herewith).
FS-13 Consolidated Balance Sheet of Essex Gas and Subsidiaries as
of December 31, 1999 (Incorporated herein by reference to
Essex Gas' Annual Report on Form 10-K for the year ended
December 31, 1999 in File No. 1-8154).
FS-14 Consolidated Statement of Earnings of Essex Gas and
Subsidiaries for the year ended December 31, 1999
(Incorporated herein by reference to Essex Gas' Annual
Report on Form 10-K for the year ended December 31, 1999 in
File No. 1-8154).
FS-15 Consolidated Balance Sheet of Essex Gas and Subsidiaries as
of June 30, 2000 (Filed herewith).
FS-16 Consolidated Statement of Earnings of Essex Gas and
Subsidiaries for the twelve months ended June 30, 2000
(Filed herewith).
27
<PAGE>
FS-17 Consolidated Balance Sheet of Midland and Subsidiaries as of
December 31, 1999 (Incorporated by reference to Midland's
Annual Report on Form 10-K for the year ended December 31,
1999 in File No.2-39895).
FS-18 Consolidated Statement of Earnings of Midland and
Subsidiaries for the year ended December 31, 1999
(Incorporated by reference to Midland's Annual Report on
Form 10-K for the year ended December 31, 1999 in File No.
2-39895).
FS-19 Consolidated Balance Sheet of Midland and Subsidiaries as of
June 30, 2000 (Incorporated by reference to Midland's
Quarterly Report on Form 10-Q for the period ended June 30,
2000 in File No.2-39895).
FS-20 Consolidated Statement of Earnings of Midland and
Subsidiaries for the twelve months ended June 30, 2000
(Filed herewith).
FS-21 Balance Sheet of ServicEdge Partners, Inc. as of June 30,
2000. (Filed confidentially pursuant to Rule 104).
FS-22 Income Statement of ServicEdge Partners, Inc. for the twelve
months ended June 30, 2000. (Filed confidentially pursuant
to Rule 104).
FS-23 Balance Sheet of Transgas Inc. as of June 30, 2000. (Filed
confidentially pursuant to Rule 104).
FS-24 Income Statement of Transgas Inc. for the twelve months
ended June 30, 2000. (Filed confidentially pursuant to Rule
104).
FS-25 Consolidated Balance Sheet of EnergyNorth and Subsidiaries
as of September 30,1999 (Incorporated herein by reference to
EnergyNorth's Annual Report on Form 10-K for the fiscal year
ended September 30, 1999 in File No. 1-11441).
FS-26 Consolidated Statement of Income of EnergyNorth and
Subsidiaries for the fiscal year ended September 30, 1999
(Incorporated herein by reference to EnergyNorth's Annual
Report on Form 10-K for the fiscal year ended September 30,
1999 in File No. 1-11441).
FS-27 Consolidated Balance Sheet of EnergyNorth and Subsidiaries
as of June 30, 2000 (Incorporated herein by reference to
EnergyNorth's Quarterly Report on Form 10-Q for the period
ended June 30, 2000 in File No. 1-11441).
FS-28 Consolidated Statement of Income of EnergyNorth and
Subsidiaries for the twelve months ended June 30, 2000
(Incorporated herein by reference to EnergyNorth's Quarterly
Report on Form 10-Q for the period ended June 30, 2000 in
File No. 1-11441).
28
<PAGE>
FS-29 Balance Sheet of ENGI as of September 30,1999 (Incorporated
herein by reference to ENGI's Annual Report on Form 10-K for
the fiscal year ended September 30, 1999 in File No.
000-25305).
FS-30 Statement of Income of ENGI for the fiscal year ended
September 30, 1999 (Incorporated herein by reference to
ENGI's Annual Report on Form 10-K for the fiscal year ended
September 30, 1999 in File No. 000-25305).
FS-31 Balance Sheet of ENGI as of June 30, 2000 (Incorporated
herein by reference to ENGI's Quarterly Report on Form 10-Q
for the period ended June 30, 2000 in File No. 000-25305).
FS-32 Statement of Income of ENGI for the twelve months ended June
30, 2000 (Incorporated herein by reference to ENGI's
Quarterly Report on Form 10-Q for the period ended June 30,
2000 in File No. 000-25305).
FS-33 Consolidated Balance Sheet of ENI Mechanicals, Inc. as of
June 30, 2000. (Filed confidentially pursuant to Rule 104).
FS-34 Consolidated Statement of Income of ENI Mechanicals, Inc.
for the twelve months ended June 30, 2000. (Filed
confidentially pursuant to Rule 104).
FS-35 Balance Sheet of ENPI as of June 30, 2000. (Filed
confidentially pursuant to Rule 104).
FS-36 Statement of Income of ENPI for the twelve months ended June
30, 2000. (Filed confidentially pursuant to Rule 104).
FS-37 Form U-3A-2 Statements filed by EnergyNorth for the years
ended December 31, 1999, December 31, 1998 and December 31,
1997 (Incorporated herein by reference to File No. 69-273).
FS-38 Unaudited Pro Forma Combined Balance Sheets of Eastern and
EnergyNorth as of December 31, 1999. (Included in Exhibit
C-2 hereto).
FS-39 Unaudited Pro Forma Combined Statements of Operations of
Eastern and EnergyNorth for the twelve months ended December
31, 1999 and December 31, 1998. (Included in Exhibit C-2
hereto).
FS-40 Unaudited Pro Forma Combined Balance Sheets of KeySpan,
Eastern and EnergyNorth as of June 30, 2000. (Incorporated
by reference to Exhibit FS-1 to KeySpan's
Application/Declaration on Form U-1 in File No. 70-9641).
FS-41 Unaudited Pro Forma Combined Statements of Operations of
KeySpan, Eastern and EnergyNorth for the twelve months ended
June 30, 2000. (Incorporated by reference to Exhibit FS-1 to
KeySpan's Application/Declaration on Form U-1 in File No.
70-9641).
29
<PAGE>
ITEM 7. INFORMATION AS TO ENVIRONMENTAL EFFECTS.
---------------------------------------
The proposed transaction does not involve a "major federal action" nor
will it "significantly affect the quality of the human environment" as those
terms are used in section 102(2)(C) of the National Environmental Policy Act.
The proposed transaction will not result in changes in the operation of the
applicant or its subsidiaries that will have an impact on the environment.
Eastern is not aware of any federal agency that has prepared or is preparing an
environmental impact statement with respect to the proposed transaction.
SIGNATURE
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 officer thereunto duly authorized.
EASTERN ENTERPRISES
By: /s/ Walter J. Flaherty
------------------------------------
Name: Walter J. Flaherty
Title: Executive Vice President and
Chief Financial Officer
ENERGYNORTH, INC.
By: /s/ Michelle L. Chicoine
------------------------------------
Name: Michelle L. Chicoine
Title: Executive Vice President
Date: November 7, 2000
30
