File No. 70-8769
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
POST EFFECTIVE AMENDMENT NO. 1
TO
FORM U-1
APPLICATION-DECLARATION WITH RESPECT TO
THE ACQUISITION OF A SUBSIDIARY IN CONNECTION WITH
THE PROVISION OF POWER MARKETING AND OTHER SERVICES
UNDER
THE PUBLIC UTILITY HOLDING COMPANY ACT OF 1935
EASTERN UTILITIES ASSOCIATES
P.O. Box 2333, Boston, Massachusetts 02107
(Name of company 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, P.C.
McDermott, Will & Emery
75 State Street
Boston, MA 02109
ITEM 1. DESCRIPTION OF THE PROPOSED TRANSACTION.
Introduction.
(a) Pursuant to an order issued by the Securities and Exchange
Commission (the "Commission") in this proceeding on March 14, 1996 (Release
No. 35-26493), the applicant, Eastern Utilities Associates ("EUA"), a
Massachusetts business trust and a registered holding company under the
Public Utility Holding Company Act of 1935 (the "Act") was authorized to
acquire a new subsidiary, EUA Energy Services, Inc. ("Energy Services")
which has a 30% ownership interest in Duke/Louis Dreyfus (New England) LLC
("D/LD"), a limited liability company formed to provide energy services to
customers in Connecticut, Maine, Massachusetts, New Hampshire, Rhode Island
and Vermont (the "Territory"). The remaining interest in D/LD is owned by
Duke/Louis Dreyfus LLC, a Nevada limited liability company.
(b) D/LD's business includes buying, selling and brokering electric
power and fuel. D/LD's initial plans were to conduct its power marketing
activities in wholesale energy markets within the Territory. D/LD intends
to sell energy to wholesale and retail customers to the extent permitted
without becoming an "electric utility company" or "gas utility company"
within the meaning of the definition of such terms in Sections 2(a)(3) and
(4) of the Act. In its initial application, EUA requested that the
Commission reserve jurisdiction over possible future retail sales of
electricity and fuel by D/LD. EUA stated in its application that various
initiatives with respect to competition in retail electric markets were
moving rapidly and that D/LD may be in a position to pursue opportunities
in the retail markets within the Territory. D/LD now has the opportunity
to participate in the retail electric markets in Massachusetts and New
Hampshire.
The Massachusetts Pilot Programs.
(c) On March 4, 1996, Massachusetts Electric Company ("MECo")
submitted two retail access pilot programs to the Massachusetts Department
of Public Utilities ("MDPU") for review. In the first pilot program, MECo
proposes to implement retail choice to residential and small commercial and
industrial customers in the communities of Lawrence, Lynn, Northampton and
Worcester (the "MA R&C Pilot"). Total participation in the MA R&C Pilot
Program will be limited to 100 million KWh per year with 50 million KWh
specifically set aside for residential customers. The second pilot program
extends retail choice to members of the Massachusetts High Technology
Council ("MHTC") who are currently served under the Company's G-3 rate (the
"MHTC Pilot"; the MA R&C Pilot and the MHTC Pilot are referred together
hereinafter as the "MA Pilot Programs"). MECo proposes to commence the MA
R&C Pilot effective September 1, 1996, and the MHTC Pilot effective July 1,
1996. MECo has provided unbundled rates for each pilot program that tie
directly to its February 16, 1996 industry restructuring proposal.
(d) MECo has stated in its submission to the MDPU that the MA Pilot
Programs will allow MECo to test the metering and billing protocols that
will be used to develop broader programs. The MA Pilot Programs will also
allow suppliers to aggregate loads, transfer capability responsibilities,
and provide a test of the market. In addition, MECo stated that, because
participation is voluntary and participants may return to MECo's filed
rates at any time, customers will not be harmed by the MA Pilot Programs.
MECo also stated that, because New England Power Company will bear the risk
of any under-recovery, non-participants will not be harmed by the programs.
(e) An administrator will solicit bids from alternative power
suppliers on behalf of customers participating in the MA R&C Pilot and the
MHTC will be required to solicit bids from alternate power suppliers on
behalf of its members participating in the MHTC Pilot. All bids in the MA
R&C Pilot must specify a price or pricing schedule for all requirements
with firm power for an initial term of 12 months. All bids in the MHTC
Pilot must specify a price for all requirements with firm power to be
delivered for an initial period of 18 months. MECo's affiliate, New
England Power Company ("NEP") may enter into contracts with the winning
bidders to buy and resell power to participating customers if it is not
practicable to conduct such transactions under appropriate wheeling
tariffs. Among other things, each RFP will require that winning bidders be
a member of NEPOOL or, if not, have an agreement with a NEPOOL member to
include the load served in the NEPOOL member's own-load despatch. Copies
of the MA Pilot Programs are filed with this application on Exhibit D-1.
(f) In its Letter of Approval dated April 3, 1996 (a copy of which is
filed with this application as Exhibit D-2), the MDPU stated that, in the
transition to a competitive market structure, the MA Pilot Programs will
provide valuable experience to MECo, its customers, and the other
participants that will be active in a competitive market. With the
understanding that MECo's customers that do not participate in the programs
are not harmed by the implementation of the MA Pilot Programs, the MDPU
approved the MA Pilot Programs. EUA hereby requests that the Commission
authorize D/LD to participate in the MA Pilot Programs.
The New Hampshire Pilot Program
(g) The New Hampshire Public Utilities Commission (the "NHPUC")
adopted final guidelines for a pilot retail wheeling program (NHPUC Order
No. 22033 dated February 28, 1996, a copy of which is attached hereto on
Exhibit D-3) which will commence on May 28, 1996 and last for a period of
two years (the "New Hampshire Pilot Program"). The purpose of the New
Hampshire Pilot Program is to determine whether retail competition in
electric service will promote lower retail rates for all customers without
compromising reliability or safety. The program will encompass three
percent of the electric load in New Hampshire (approximately 60 Megawatts).
Customers of all rate classes, who will be selected randomly among
interested customers of each utility, will be permitted to negotiate power
supplies with New Hampshire utilities, power marketers, power brokers,
generators and other suppliers of electric service. Once customers are
selected for participation in the New Hampshire Pilot Program, energy
suppliers will be provided with access to load and use data for the
customers to formulate pricing and service proposals. In addition to
providing load and use data, New Hampshire utilities will be required to
provide non-discriminatory access to their transmission and distribution
systems through unbundled tariffs to assure that competing suppliers have
equal access to pilot customers. Pilot customers will bear the risks
associated with procuring alternative energy supplies.
(h) Out-of-state energy suppliers may participate in the New
Hampshire Pilot Program by registering with the NHPUC. To register,
suppliers must provide the NHPUC with (1) information about their
organization, (2) evidence of eligibility to conduct business in New
Hampshire, and (3) evidence that they are NEPOOL members or have contracted
with a NEPOOL member for back-up power supply service.
(i) Franchised New Hampshire utilities were required to make
compliance filings by March 15, 1996, which include unbundled tariffs. The
NHPUC conducted technical sessions from March 18 through March 29 and
hearings were held on the implementation of the New Hampshire Pilot Program
from April 1 through April 5. The Program will begin on May 28.
(j) EUA hereby requests that the Commission authorize D/LD to
participate in the New Hampshire Pilot Program.
(k) As required by rule 54, all applicable conditions contained in
rule 53(a) are, and assuming the consummation of the proposed transactions,
will be, satisfied and none of the conditions contained in rule 53(b) exist
or will exist as a result of the proposed transactions, making rule 53(c)
inapplicable.
ITEM 2. FEES, COMMISSIONS, AND EXPENSES.
The fees, Commissions and expenses of the Applicant expected to be
paid or incurred, directly or indirectly, in connection with the
transactions described will be filed by amendment.
ITEM 3. APPLICABLE STATUTORY PROVISIONS.
The sections of the Act and rules or exemptions thereunder that the
Applicant believes are or may be applicable to the transactions proposed
are set forth below:
Participation in the MA Pilot Sections 9(a)(1); 10 and 11
Programs and the New Hampshire
Pilot Program
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 rules thereunder, other than those specifically
referred to above, request for such authorization, approval or exemption is
hereby made.
ITEM 4. REGULATORY APPROVALS.
No state Commission and no Federal Commission, other than the MDPU,
the NHPUC and the Commission, has jurisdiction over the proposed
transactions.
ITEM 5. PROCEDURE.
(a) In order to be in a position to carry out the proposed
transactions at the most advantageous time, the Applicant requests that the
Commission issue its order hereon on the earliest practical date.
(b) It is not considered necessary that there be a recommended
decision by a hearing officer or by any other responsible officer of the
Commission. The Office of Public Utility Regulation may assist in the
preparation of the decision of the Commission, and it is believed that a
thirty (30) day waiting period between the issuance of the order of the
Commission and the day on which the order is to become effective would not
be appropriate.
(c) In lieu of any other certificates pursuant to Rule 24 previously
prescribed by the Commission, Energy Services will file certificates with
the Commission pursuant to Rule 24 within 60 days after the end of each
calendar quarter to report transactions authorized under the Act in this
proceeding, and setting forth;
(1) a balance sheet as of the end of such quarter, and
statements of income and expense and cash flow for such quarter and
the twelve-months concluding as of the end of such quarter, for D/LD;
(2) a statement for such quarter of the amount of revenues of
D/LD attributable to (i) buying, selling and brokering electric power,
(ii) buying, selling and brokering fuel, and (iii) engineering,
consulting, leasing and maintenance services (each stated separately);
(3) a statement for such quarter for D/LD of the Kilowatt hour
sales by customer class;
(4) a statement as to whether the D/LD has engaged in any
derivative transactions during the quarter; and
(5) a description of the types and dollar amounts of services
provided by EUA affiliates to Energy Services or D/LD during the
period, identifying the type of services, goods or construction
contract, the parties involved, and, if such transactions are not in
compliance with Rules 90 and 91 under the Act, the basis for the
pricing of such transactions.
ITEM 6. EXHIBITS AND FINANCIAL STATEMENTS (* To be filed by amendment)
(a) Exhibits.
*D-1 Massachusetts Electric Company Retail Access Pilot Programs
*D-2 MDPU Letter of Approval dated April 3, 1996.
*D-3 NHPUC Order No. 22,033 Retail Competition Pilot Program Order
Establishing Fund Guidelines and Requiring Compliance Filings.
ITEM 7. INFORMATION AS TO ENVIRONMENTAL EFFECTS.
The transactions described in Item 1. do not involve major federal
actions significantly affecting the quality of the human environment. No
Federal agency has prepared or is preparing an environmental impact
statement with respect to the proposed transactions.
SIGNATURE
Pursuant to the requirements of the Public Utility Holding Company Act
of 1935, the undersigned Applicants have duly caused this statement to be
signed on their behalf by the undersigned duly authorized individuals.
EASTERN UTILITIES ASSOCIATES
By: /s/ Clifford J. Hebert, Jr.
Clifford J. Hebert, Jr.
Treasurer
Dated May 8, 1996
