UNITED STATES OF AMERICA
Before the
SECURITIES AND EXCHANGE COMMISSION
- ------------------------------------------------------
In the Matter of
AMENDED
NATIONAL FUEL GAS COMPANY SECOND
NATIONAL FUEL GAS DISTRIBUTION CORPORATION CERTIFICATE
NATIONAL FUEL GAS SUPPLY CORPORATION PURSUANT TO
SENECA RESOURCES CORPORATION RULE 24
UTILITY CONSTRUCTORS, INC.
HIGHLAND LAND & MINERALS, INC.
LEIDY HUB, INC.
DATA-TRACK ACCOUNT SERVICES, INC.
NATIONAL FUEL RESOURCES, INC.
HORIZON ENERGY DEVELOPMENT, INC.
SENECA INDEPENDENCE PIPELINE COMPANY
NIAGARA INDEPENDENCE MARKETING COMPANY
UPSTATE ENERGY INC., F/K/A NIAGARA ENERGY TRADING INC.
File No. 70-9153
(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 subsidiaries: National Fuel
Gas Distribution Corporation ("Distribution Corporation"), National Fuel Gas
Supply Corporation ("Supply Corporation"), Seneca Resources Corporation
("Seneca"), Utility Constructors, Inc. ("UCI"), Highland Land & Minerals, Inc.
("Highland"), Leidy Hub, Inc. ("Leidy"), Data-Track Account Services, Inc.
("Data-Track"), National Fuel Resources, Inc. ("NFR"), Horizon Energy
Development, Inc. ("Horizon Energy"), Seneca Independence Pipeline Company
("SIP"), Niagara Independence Marketing Company ("NIM"), and Upstate Energy Inc,
formerly known as Niagara Energy Trading Inc. ("Upstate") (collectively, the
"Subsidiaries"), in their Application-Declaration on Form U-1, as amended,
("Application-Declaration")in SEC File No. 70-9153, have been carried out in
accordance with the terms and conditions, and for the purposes as represented by
said Application-Declaration, and the Order of the Securities and Exchange
Commission ("Commission") (HCAR No. 35-26847 dated March 20, 1998) with respect
thereto.
<PAGE>
1. EXTERNAL FINANCING BY NFG
-------------------------
a. Short-term Debt
---------------
BORROWING BY NATIONAL
- ---------------------
National borrowed funds to be used for its own corporate purposes by
issuing commercial paper and/or short-term notes (in all cases having maturities
of no more than 270 days) to banks or other financial institutions during the
quarter ended June 30, 1998 ("Quarter"):
------------------------------------------------------------
Maximum Level Minimum Level
At Beginning At End of Such Short- of Such Short-
of Quarter of Quarter term Debt term Debt
---------- ---------- --------- ---------
$35,000,000 $35,000,000 $35,000,000 $35,000,000
b. Long-term Securities
--------------------
(1) Long-Term Debt Securities; Preferred Stock
During the Quarter, National sold long-term debt securities (i.e. debt with
maturities in excess of 270 days) on one occasion. On May 20, 1998, National
sold $200,000,000 principal amount of medium term notes ("MTNs"), through
underwriters. These MTNs were issued on May 26, 1998, and mature on May 27,
2008. They have a coupon of 6.303%.
(2) Stock Issuance Plans
During the Quarter, National issued the following shares of common stock
through the following plans ("Stock Issuance Plans"):
<PAGE>
Number of
Shares
Exchanged
as
Consideration
Number of For Share
Name of Plan Shares Issued Issuances
- ------------ ------------- ---------
Customer Stock 9,334 NA
Purchase Plan
Dividend Reinvestment
and Stock Purchase Plan 28,796 NA
Tax Deferred Savings
Plans [401(k)] 22,194 NA
Retainer Policy for
Outside Directors 700 NA
1997 Award & Option Plan 0 0
1993 Award and Option Plan 28,676 170
1984 Stock Plan 4,826 0
1983 Incentive Stock
Option Plan 3,000 0
Total Number of
Shares Issued/Exchanged 97,526 170
Net New Shares 97,356
Aggregate Consideration received upon issuance of 36,332 shares: $3,902,674.92.
The purpose of National's Customer Stock Purchase Plan and its Dividend
Reinvestment and Stock Purchase Plan is to promote the long-term ownership of
National's common stock by allowing for the purchase thereof directly from
National, through cash purchases and through reinvestment of cash dividends.
<PAGE>
The purpose of National's two Tax-Deferred Savings Plans is to encourage
employees of National and of its Subsidiaries to provide for their retirement
needs by providing opportunities for long-term capital accumulation, to promote
ownership of National's common stock among employees, to provide an attractive
employee benefit, and to keep National's employee benefit program competitive
with programs offered by other corporations.
The purpose of National's Retainer Policy for Outside Directors is to pay
outside directors a portion of their annual retainer in common stock of
National. This promotes the long-term ownership of National's common stock by
outside directors.
National adopted its four award and option plans in order to attract,
retain and motivate key employees of outstanding ability. These plans were
intended to provide an incentive to key employees to maximize the long-range
profits, revenues, and financial integrity of National by increasing the
personal stake of those employees in the continued success and growth of
National, and by providing significant incentives to their continuation of
employment at National and its Subsidiaries.
(3) On June 18, 1998, the Compensation Committee of the Board of Directors of
National Fuel Gas Company awarded stock options pertaining to 7,746 shares of
National's common stock pursuant to the National Fuel Gas Company 1993 Award and
Option Plan and options pertaining to 103,754 shares of common stock pursuant to
the National Fuel Gas Company 1997 Award and Option Plan.
(4) Compliance With Parameters Concerning Long-Term Securities
During the Quarter, all long-term debt of National had bond ratings of
"investment grade", and National's common equity (as reflected in its Form 10-Q)
did not fall below 30% of National's consolidated capitalization.
c. Hedging Transactions
--------------------
During the Quarter, National did not enter into any hedges or other
derivative transactions either pursuant to a Hedge Program or an Anticipatory
Hedge Program.
<PAGE>
d. Other Securities
----------------
During the Quarter, National did not issue other types of securities
("Other Securities").
2. MONEY POOL
----------
During the Quarter, National coordinated the borrowing requirements of
Subsidiaries through the system money pool ("Money Pool"). Money Pool activities
included:
a. National sold commercial paper during the Quarter, through Merrill
Lynch Money Markets, Inc. and/or Chase Securities, Inc. The proceeds were loaned
by National to certain Subsidiaries that borrowed through the Money Pool during
the Quarter.
Commercial Paper Outstanding
------------------------------------------------------------
Maximum Amount Minimum Amount
At Beginning At End Outstanding Outstanding
of Quarter of Quarter During Quarter During Quarter
---------- ---------- -------------- --------------
$130,000,000 $93,000,000 $130,000,000 $70,000,000
b. National issued short-term notes to banks or other financial
institutions during the Quarter. The proceeds thereof were loaned by National to
certain Subsidiaries that borrowed through the Money Pool during the Quarter.
National's External Bank/Financial Institution Borrowings
Outstanding (Money Pool)
-------------------------------------------------------------
Maximum Amount Minimum Amount
At Beginning At End Outstanding Outstanding
of Quarter of Quarter During Quarter During Quarter
------------ ---------- -------------- --------------
$230,500,000 $108,900,000 $246,000,000 $57,900,000
c. The maximum aggregate amount of external short-term debt borrowed by
National (for its own use and for the Money Pool) at any time during the Quarter
was $396,900,000, and the maximum aggregate amount that National and its
Subsidiaries lent to other Subsidiaries participating in the Money Pool at any
time during the Quarter was $426,000,000.
<PAGE>
d. The following table lists cash balances that National and certain
Subsidiaries (i.e., Subsidiaries with surplus funds) loaned to other
Subsidiaries that borrowed through the Money Pool during the Quarter:
Cash Balances Loaned Through the Money Pool
------------------------------------------------------
At Beginning At End
of Quarter of Quarter Maximum Minimum
---------- ---------- ------- -------
National $14,300,000 $17,900,000 $34,700,000 $14,300,000
Distribution 0 0 41,200,000 0
Supply 0 0 0 0
Seneca 8,100,000 8,900,000 10,000,000 7,300,000
UCI 900,000 700,000 900,000 700,000
Highland 0 300,000 1,000,000 0
Leidy 700,000 700,000 700,000 0
Data-Track 500,000 600,000 600,000 500,000
NFR 2,800,000 800,000 5,100,000 0
Horizon Energy 0 300,000 5,400,000 0
SIP 0 0 0 0
NIM 0 0 0 0
Upstate 0 0 0 0
e. The following table lists cash balances that certain Subsidiaries
borrowed through the Money Pool during the Quarter. National does not borrow
from its Subsidiaries through the Money Pool or otherwise.
Borrowings from the Money Pool
----------------------------------------------------------
At Beginning At End Maximum Minimum
of Quarter of Quarter Borrowed Borrowed
---------- ---------- -------- --------
Distribution $ 27,900,000 $ 4,700,000 $ 27,900,000 $ 0
Supply 22,600,000 23,200,000 34,200,000 8,500,000
Seneca 224,200,000 177,400,000 281,300,000 153,700,000
UCI 0 0 0 0
Highland 500,000 0 500,000 0
Leidy 0 0 0 0
Data-Track 0 0 0 0
NFR 0 0 1,900,000 0
Horizon Energy 72,300,000 0 74,600,000 0
SIP 4,000,000 5,200,000 5,200,000 4,000,000
NIM 0 0 0 0
Upstate 500,000 200,000 500,000 200,000
3. USE OF PROCEEDS
---------------
National has used the proceeds of the aforementioned issuance's of
short-term debt and long-term securities, and the
<PAGE>
borrowing Subsidiaries have used the proceeds of their Money Pool and long-term
borrowings, for acquisitions, capital expenditures, working capital needs, for
the retirement or redemption of securities, or for other general corporate
purposes.
4. EXTERNAL FINANCING BY DISTRIBUTION
----------------------------------
During the Quarter, Distribution did not engage in external financing.
5. FINANCING ENTITIES
------------------
During the Quarter, National and its nonutility Subsidiaries did not
organize new corporations, trusts, partnerships or other entities created for
the purpose of facilitating financing.
6. GUARANTEES BY NATIONAL
----------------------
During the Quarter, National made guarantees on behalf of its Subsidiaries
in the aggregate amount of $31,300,000. The maximum amount of guarantees or
credit support that National had outstanding to its Subsidiaries at any time
during the quarter was $106,293,233.
All guarantees relate to gas transportation, purchases or sales, or other
agreements relating to the Subsidiaries' existing businesses.
7. ACQUISITIONS OF EWG'S, FUCO'S AND RULE 58 COMPANIES
---------------------------------------------------
On May 29, 1998, National filed a Form U-57 with the Commission, through
which it designated the following four indirect subsidiaries (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.
During the Quarter, neither National nor any of its Subsidiaries made any
investments in entities that had been designated as electric wholesale
generators (EWG's) or
<PAGE>
foreign utility companies (FUCO's) at such time, and did not make any
investments in energy-related companies and gas-related companies under Rule 58,
except as follows: On June 11, 1998, Horizon withdrew $3,900,000 of its surplus
funds that it had deposited in the Money Pool and advanced such amount to
Horizon Energy Development B.V. ("B.V."). B.V. used a combination of its own
funds and most of the aforementioned advance to purchase 99,884 shares of PSZT,
between May 29 and June 15, 1998, for a total consideration equivalent to
$3,748,348.
On June 27, 1998, B.V. paid the equivalent of $17,298 to purchase 890
shares of SCT.
The aggregate investment of National and its subsidiaries in EWG'S and
FUCO's does not exceed the limits set forth in the Commission's Rule 53.
SIGNATURES
----------
Pursuant to the requirements of the Public Utility Holding Company Act
of 1935, the undersigned companies have duly caused this Second Certificate
Pursuant to Rule 24 to be signed on their behalf by the undersigned
thereunto duly authorized.
NATIONAL FUEL GAS COMPANY
By /s/ Philip C. Ackerman
-------------------------------------
Philip C. Ackerman
Senior Vice President
NATIONAL FUEL GAS DISTRIBUTION
CORPORATION
By /s/ Philip C. Ackerman
-------------------------------------
Philip C. Ackerman
President
SENECA RESOURCES CORPORATION
By /s/ G. T. Wehrlin
-------------------------------------
G. T. Wehrlin
Controller
<PAGE>
NATIONAL FUEL GAS SUPPLY CORPORATION
By /s/ Richard Hare
-------------------------------------
Richard Hare
President
NATIONAL FUEL RESOURCES, INC.
By /s/ Robert J. Kreppel
-------------------------------------
Robert J. Kreppel
President
UTILITY CONSTRUCTORS, INC.
By /s/ James A. Beck
-------------------------------------
James A. Beck
President
HORIZON ENERGY DEVELOPMENT INC.,
By /s/ Philip C. Ackerman
-------------------------------------
Philip C. Ackerman
President
HIGHLAND LAND & MINERALS, INC.
By /s/ Philip C. Ackerman
-------------------------------------
Philip C. Ackerman
President
DATA-TRACK ACCOUNT SERVICES, INC.
By /s/ Philip C. Ackerman
-------------------------------------
Philip C. Ackerman
President
LEIDY HUB, INC.
By /s/ G. T. Wehrlin
-------------------------------------
G. T. Wehrlin
Secretary/Treasurer
<PAGE>
SENECA INDEPENDENCE PIPELINE COMPANY
By /s/ Richard Hare
-------------------------------------
Richard Hare
President
NIAGARA INDEPENDENCE MARKETING COMPANY
By /s/ C. H. Friedrich
-------------------------------------
C. H. Friedrich
Treasurer
UPSTATE ENERGY INC.
By /s/ C. H. Friedrich
-------------------------------------
C. H Friedrich
Treasurer
Dated: March 1, 1999
