UNITED STATES OF AMERICA
Before the
SECURITIES AND EXCHANGE COMMISSION
- --------------------------------------------
In the Matter of
TWELFTH
NATIONAL FUEL GAS COMPANY CERTIFICATE
HORIZON ENERGY DEVELOPMENT, INC. PURSUANT TO
RULE 24
File No. 70-8649
(Public Utility Holding Company Act of 1935)
- --------------------------------------------
THIS IS TO CERTIFY, pursuant to Rule 24, that certain transactions
proposed by National Fuel Gas Company ("National") and its subsidiary, Horizon
Energy Development, Inc. ("Horizon") in its Application-Declaration on Form U-1,
as amended (File No. 70-8649), have been carried out in accordance with the
terms and conditions of said Application-Declaration and the Order (HCAR No.
35-26364, dated August 29, 1995) of the Securities and Exchange Commission (the
"Commission") with respect thereto, and that the following information for the
quarter ended June 30, 1998 is herein provided:
1a) Horizon's balance sheet at June 30, 1998 is attached as
Exhibit 1.
1b) National's balance sheet at June 30, 1998 is included in
National's Form 10-Q for the second quarter of fiscal 1998,
which has been filed with the Commission on August 14, 1998 and
is incorporated herein by reference.
2a) Horizon's income statement for the quarter ended June 30, 1998
is attached as Exhibit 2.
2b) National's income statement for the quarter ended June 30, 1998
is included in National's Form 10-Q for the second quarter of
fiscal 1998, which was filed with the Commission on August 14,
1998 and is incorporated herein by reference.
<PAGE>
3) Recourse and non-recourse debt securities issued to third parties
by Intermediate Companies during the quarter ended June 30, 1998.
None.
4) A general description of the activities of the Applicants for
the quarter ended June 30, 1998, and of the projects in which
they or their subsidiary companies have an ownership interest:
The Project Activities (as such term is defined in the aforesaid
Application-Declaration) that National and Horizon, and
subsidiaries of Horizon, were engaged in pursuant to File No.
70-8649, as of June 30, 1998, are as follows:
Horizon modified the structure of its direct and indirect
subsidiaries in one respect during the quarter. Horizon had, for
almost two years, been the direct owner of 100% of the capital
stock of Horizon Energy Development B.V. ("HEDBV"). However,
effective April 30, 1998, Horizon contributed its ownership
interests and current accounts in HEDBV to Horizon Energy
Holdings, Inc. ("Holdings") in return for 2,000 shares, (100%) of
the common stock of Holdings, and Holdings eliminated its current
accounts in HEDBV by making an additional contribution to the
share premium (share capital) of HEDBV.
Horizon, through its wholly owned indirect subsidiary, HEDBV,
continues to own 100% of the capital stock of each of Horizon
Energy Development s.r.o. ("HED") and Power Development s.r.o.
("PD"). PD in turn continues to own 100% of the capital stock of
Teplarna Kromeriz a.s. ("TK"). These entities continue to engage
in power development and related activities in the Czech Republic
and eastern Europe.
The only material asset of HED, PD and TK is the district heating
system of TK, which sells steam heat to its residential and
commercial customers in the city of Kromeriz, Czech Republic. TK
continues to investigate ways to convert the existing steam plant
into a cogeneration facility, or otherwise to generate
electricity at the site.
As of June 30, 1998, HEDBV owned approximately 83% of the capital
stock of Severoceske Teplarny, a.s. ("SCT"). SCT, directly and
through its subsidiaries, distributes heat in the northern part
of the Czech Republic. SCT, through one of its subsidiaries,
also generates and sells power at wholesale in that region.
<PAGE>
As of June 30, 1998 HEDBV owned approximately 86% of the capital
stock of Prvni Severozapadni Teplarenska, a.s. ("PSZT"). PSZT
distributes heat and also generates and sells power at wholesale
in the northern part of the Czech Republic.
HEDBV, as a shareholder of SCT, has received, and expects to
continue to receive, dividends from its investment in the SCT
shares. HEDBV, as a shareholder of PSZT, expects to receive
dividends from its investment in PSZT shares. Furthermore, in
the future, PSZT and SCT will pursue efforts by which PSZT and
SCT might directly or indirectly develop additional electrical
generation capacity.
On May 29, 1998, National filed a Form U-57 with the Commission,
through which it designated the following four indirect
subsidiaries of Horizon (all of which are incorporated and doing
business in the Czech Republic) as "foreign utility companies":
Severoceske Teplarny, a.s. ("SCT")
Prvni Severozapadni Teplarenska, a.s. ("PSZT")
Teplarna Liberec, a.s.
Teplarna Kromeriz, a.s.
The aggregate investment of National and its subsidiaries in
electric wholesale generators and foreign utility companies does
not exceed the limits set forth in the Commission's Rule 53.
5) Information on intercompany service transactions (including
those provided at cost and at market rates) involving affiliated
Intermediate Companies during the quarter ended June 30, 1998:
Neither Horizon nor National engaged in any intercompany
service transactions with affiliated Intermediate Companies.
<PAGE>
August 28, 1998 NATIONAL FUEL GAS COMPANY
By: /s/ Philip C. Ackerman
-------------------------------
Philip C. Ackerman
Senior Vice President
HORIZON ENERGY DEVELOPMENT,
INC.
By: /s/ Ronald J. Tanski
-------------------------------
Ronald J. Tanski
Secretary and Treasurer
EXHIBIT 1
HORIZON ENERGY DEVELOPMENT, INC.
BALANCE SHEET
(Unaudited)
At June 30, 1998
----------------
ASSETS
Current Assets:
Cash $ 12,962,707
Accounts Receivable - Net 15,015,702
Unbilled Utility Revenue 2,080,599
Intercompany Receivables 307,592
Materials & Supplies 4,625,151
Prepaid Expenses 155,890
------------
Total Current Assets 35,147,641
------------
Property, Plant & Equipment 246,184,744
Less: Reserve for DDA 70,281,058
------------
175,903,686
------------
Other Assets: 22,894,391
------------
Total Assets $233,945,718
============
LIABILITIES AND STOCKHOLDERS EQUITY Capital Stock $1 Par:
Shares Authorized, Issued and Outstanding: 4,750 $ 4,750
Paid-in Capital 38,245,250
Retained Earnings (8,450,539)
Cumulative Translation Adjustment (1,058,855)
------------
Total Stockholders Equity 28,740,606
------------
Long-Term Debt, Net of Current Portion 63,829,812
Long-Term Debt - Intercompany 90,000,000
------------
Total Long-Term Debt 153,829,812
------------
Minority Interest in Foreign Subsidiaries 23,902,457
------------
Current and Accrued Liabilities:
Current Portion of Long-Term Debt 484,262
Accounts Payable 8,170,356
Accounts Payable - Intercompany 2,137,903
Federal Income Taxes Payable (476,939)
Other Accrued Liabilities 14,266,533
------------
Total Current and Accrued Liabilities 24,582,115
------------
Deferred Credits:
Accumulated Deferred Income Taxes 2,737,923
Other Deferred Credits 152,805
------------
Total Deferred Credits 2,890,728
------------
Total Liabilities and Stockholders Equity $233,945,718
============
EXHIBIT 2
HORIZON ENERGY DEVELOPMENT, INC.
INCOME STATEMENT
(Unaudited)
Three Months Ended
June 30, 1998
------------------
Operating Revenues $18,639,319
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Operating Expenses:
Fuel Used in Heat and Electric Generation 8,788,991
Operation Expense 5,856,109
Maintenance Expense 7,383
Property, Franchise and Other Taxes 755,868
Depreciation, Depletion and Amortization 2,436,517
-----------
Total Operating Expenses 17,844,868
-----------
Operating Income 794,451
-----------
Other Income 2,269,846
-----------
Interest Charges 2,646,367
-----------
Income Before Income Taxes 417,930
-----------
Income Taxes - Current 246,018
- Deferred 13,551
-----------
259,569
-----------
Minority Interest in Foreign Subsidiaries (207,061)
-----------
Net Loss $ (48,700)
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