File No. 70-7426
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
POST-EFFECTIVE AMENDMENT NO. 6 TO
FORM U-1
APPLICATION-DECLARATION WITH RESPECT TO ORGANIZATION AND
FINANCING OF A WHOLLY-OWNED SUBSIDIARY
UNDER
THE PUBLIC UTILITY HOLDING COMPANY ACT OF 1935
EUA ENERGY INVESTMENT CORPORATION
P.O. Box 2333, Boston, Massachusetts 02107
(Name of companies filing this statement
and address of principal executive office)
EASTERN UTILITIES ASSOCIATES
(Name of top registered holding company
parent of applicant or declarant)
CLIFFORD J. HEBERT, JR., TREASURER
EASTERN UTILITIES ASSOCIATES
P.O. Box 2333, Boston, Massachusetts 02107
(Name and address of agent for service)
The Commission is requested to mail signed copies
of all orders, notices and communications to:
ARTHUR I. ANDERSON, ESQ.
McDermott, Will & Emery
75 State Street
Boston, MA 02109
The application-declaration on Form U-1 dated August 7, 1987, as amended by
Amendment No. 1 dated September 9, 1987, Amendment No. 2 dated September 14,
1987, Amendment No. 3 dated September 24, 1987, Amendment No. 4 dated November
24, 1987, Post-Effective Amendment No. 1 dated November 7, 1988, Post-Effective
Amendment No. 2 dated December 1, 1988, Post-Effective Amendment No. 3 dated
December 22, 1988, Post-Effective Amendment No. 4 dated January 24, 1990 and
Post-Effective Amendment No. 5 dated February 4, 1994, is hereby amended by
adding the following to the end of Item 1:
Exhibit B-5 attached hereto contains a summary by specific project of the
cumulative total costs incurred by EUA Energy through December 31, 1993.
Existing Research & Development ("R&D") Projects. In 1993, EUA Energy was
actively involved in an R&D project with TransCapacity L.P., a Massachusetts
limited partnership, to develop an automated system for the collection,
compilation and distribution of information on capacity rights from gas
transmission lines. EUA Service Corporation time and expense required to
develop the TransCapacity project was minimal. As shown in Exhibit B-6
attached hereto, only $107,421 out of a total of $2,185,937 of expense incurred
in 1993 by EUA Energy in connection with the TransCapacity project was for EUA
Service Corporation's labor, overhead and expenses. The major portion of EUA
Energy's expenses incurred were for R&D costs of $1,850,000 paid directly to
TransCapacity L.P. In addition, $266,073 was expensed for outside services
which were primarily legal and there was $2,443 of miscellaneous general
expense. Upon successful initial testing of the TransCapacity system and upon
Commission authorization (File No. 70-8283), EUA Energy formed a wholly-owned
subsidiary, EUA TransCapacity, Inc., to invest and to become a partner in
TransCapacity L.P.
Basis for Requested Increase in R&D Funds. An additional $5,000,000 made
available for energy and energy conservation research generally will allow EUA
Energy the financial flexibility to respond in a timely manner to developing
opportunities in the electric industry. Energy conservation and research is an
important first step in developing new products and services which benefit both
utility customers and shareholders.
The ability to develop projects through an R&D fund rather than through
individual investment filings is important for the following reasons:
(1) R&D projects often are not initially as well defined as
investment projects;
(2) R&D projects have a higher risk and do not necessarily lead to
direct project involvement;
(3) R&D projects could end up being a source of investment by
EUA core business;
(4) R&D projects usually require more flexibility to make funding
decisions on a timely basis; and
(5) R&D funding commitment typically is less than a project
investment.
Potential R&D Projects for EUA Energy. EUA Energy has signed a letter of
intent to acquire a 9.9% interest in Quality Power Systems, Inc. ("QPS") and is
currently awaiting Commission approval of the investment. See File No. 70-
8351. QPS will manufacture and sell a power line quality control system
designed for large commercial and industrial customers. EUA Energy has
recently purchased from QPS two existing HA 6000 power line
conditioner/uninterruptible power supply systems at a cost of $25,000 per unit
in order to establish two beta sites for field research, development and
testing.
EUA Energy has no current commitments for specific R&D projects other than QPS.
The types of projects EUA Energy is interested in and would pursue given the
additional R&D funding allowance would include, without limitation, the
following: (a) new generation technology; (b) new transformer efficiency and
design; (c) electric vehicles; and (d) air quality management.
EUA Energy has not established any preference or priority ranking among the
four aforementioned types of proposed R&D projects, which project types reflect
current industry trends regarding potential technological advances. Each
potential technology will be evaluated so that R&D funding will be used to
develop the technology that provides the greatest combination of potential
benefits to both the customers and shareholders of EUA. The intent of the R&D
fund is to provide EUA Energy with the financial flexibility necessary to
respond to opportunities for development of new technologies in a constantly
evolving energy industry.
Each of the project types being considered by EUA Energy deals with technology
that contains potential benefits for EUA's core business.
For example:
(a) New generation technology includes the development of energy
efficient turbines and combined cycle units that can produce power
that is both economically and environmentally superior to existing
generating units;
(b) High efficiency transformers provide the benefits of lower energy
losses through more efficient transformer design;
(c) Electric vehicles provide air quality benefits while taking advantage
of off-peak generating capacity for recharging; and
(d) Air quality management involves bringing together end users and
suppliers of advanced technologies, clean fuel and efficiency
measures in order to finance cost-effective matches and to create
emission reduction credits.
Based on its general knowledge of the industry, EUA Energy anticipates being
able to develop three or four projects with a $5,000,000 R&D Fund. This
estimate assumes a $1,000,000 - $3,000,000 investment by EUA Energy in R&D for
new generation technology, which is highly capital-intensive, and up to
$1,000,000 each in R&D investments to develop high transformer efficiency,
electric vehicles and/or air quality management technologies. EUA Energy
hereby requests authorization through 1999 to invest an additional $5,000,000
R&D funding without need for further Commission authorization in R&D projects
of the types discussed hereinabove. EUA Energy agrees that any acquisition of
securities by it or any subsidiary or affiliate of it using any or all of the
R&D funds requested herein will remain subject to Commission jurisdiction.
Estimated 1994 Budget. EUA Energy anticipates making up to $1,000,000 in
equity contributions to TransCapacity L.P. in 1994. Pursuant to Release No.
35-25976, EUA Energy is authorized to make up to $1,000,000 in capital
contributions and $2,000,000 in loans for working capital for TransCapacity
L.P. Upon Commission approval, EUA Energy plans to use an additional $275,000
to acquire a 9.9% interest in QPS. Additional 1994 expenditures will be
contingent upon EUA Energy's receipt of Commission approval for incremental R&D
funding and EUA Energy's identification of viable projects.
Item 6 is hereby amended by adding the following two exhibits to part (a):
Exhibit B-5 EUA Energy Analysis of Project Costs Through 1993.
Exhibit B-6 EUA Energy 1993 Operating Expenses.
SIGNATURE
Pursuant to the requirements of the Public Utility Holding Company Act of
1935, the undersigned Applicant has duly caused this statement to be signed on
its behalf by the undersigned duly authorized individual.
EUA ENERGY INVESTMENT CORPORATION
/s/ Clifford J. Hebert, Jr.
By: ___________________________
Clifford J. Hebert, Jr.
Treasurer
Date: March 11, 1994
Exhibit B-5
<TABLE>
EUA ENERGY INVESTMENT CORPORATION
ANALYSIS OF PROJECT COSTS THROUGH 1993
<S> <C> <C>
PROJECT NAME DESCRIPTION COST
EUA ENERGY INVESTMENT FORMATION COSTS 184,404
PROVIDENCE GAS/ALLIANCE COGEN/NUG 86,638
AMERICAN RESEARCH & DEVELOPMENT COGEN/NUG 15,003
ULTRA SYSTEMS DEVELOPMENT CORP COGEN/NUG 147,877
LEWISTON STEAM PROJECT WOOD FIRED POWER PLANT 109,509
EASTERN UNICORD CORPORATION WOOD FIRED POWER PLANT 1,490,968
COMMERCIAL UNION ENERGY FUND POOLED ENERGY INVEST FUND 36,544
MAKOWSKI PEAKER PROJECT NUG 225,662
COASTAL REVERE PEAKER NUG 157,989
TRANSCAPACITY PROJECT GAS INDUSTRY SOFTWARE 2,076,073
---------
SUBTOTAL 4,530,667
EUA SERVICE CORPORATION LABOR, OVERHEAD & EXPENSE 821,422
EUA ENERGY INVESTMENT TAX CREDITS (638,162)
---------
CUMULATIVE AMOUNT THROUGH 12/31/93 4,713,927
=========
</TABLE>
Exhibit B-6
EUA ENERGY INVESTMENT CORPORATION
1993 OPERATING EXPENSES
EUA SERVICE CORPORATION EXPENSES:
Labor and Overhead 105,301
Employee Expenses 2,120
-------
TOTAL EUA SERVICE CORPORATION EXPENSES 107,421
OUTSIDE SERVICES 226,073
MISCELLANEOUS EXPENSES 2,443
TRANSCAPACITY R&D FUNDING 1,850,000
---------
TOTAL 1993 OPERATING EXPENSES 2,185,937
=========
