UNITED STATES OF AMERICA
Before the
SECURITIES AND EXCHANGE COMMISSION
- ----------------------------------------------
In the Matter of
SIXTEENTH
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, 1999 is herein provided:
1a) Horizon's balance sheet at June 30, 1999 is attached as
Exhibit 1.
1b) National's balance sheet at June 30, 1999 is included in
National's Form 10-Q for the quarter ended June 30, 1999 which
was filed with the Commission on August 13, 1999 and is
incorporated herein by reference.
2a) Horizon's income statement for the quarter ended June 30, 1999
is attached as Exhibit 2.
2b) National's income statement for the quarter ended June, 1999
is included in National's Form 10-Q for the quarter ended June
1999, which was filed with the Commission on August 13, 1999
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, 1999.
None.
4) A general description of the activities of the Applicants for
the quarter ended June 30, 1999, 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,
1999, are as follows:
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 Telplarna 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, 1999, 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. SCT entered into an agreement
to acquire a majority interest in, and undertake the operations of, the
district heating assets of Jablonec nad Nisou. Closing of the
transaction took place in July, 1999.
As of June 30, 1999 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. PSZT is currently involved in a capital
construction project involving the construction of fluidized steam
generating boilers. A portion of the funds required for this project
will be provided by Horizon. None of the funds associated with these
transactions was borrowed through the National Fuel Gas System "Money
Pool".
HEDBV, as a shareholder of SCT, has received, and expects to receive in
the future, dividends from its investment in the SCT shares. HEDBV, as
a shareholder of PSZT, expects to receive, in the future, 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.
SCT and PSZT have filed a plan with the local Commercial Court in the
Czech Republic to merge the companies. The plan of merger is still
under review.
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, 1999:
Neither Horizon nor National engaged in any intercompany service
transactions with affiliated Intermediate Companies.
August 30, 1999 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
HORIZON ENERGY DEVELOPMENT, INC.
INCOME STATEMENT
(Unaudited)
Three Months Ended
June 30, 1999
------------------
Operating Revenues $16,088,712
-----------
Operating Expenses:
Fuel Used in Heat and Electric Generation 9,182,727
Operation Expense 5,486,375
Maintenance Expense 8,631
Property, Franchise and Other Taxes 797,398
Depreciation, Depletion and Amortization 2,554,822
-----------
Total Operating Expenses 18,029,953
-----------
Operating Income (Loss) (1,941,241)
-----------
Other Income 716,301
-----------
Interest Charges 2,661,219
-----------
Income (Loss) Before Income Taxes (3,886,159)
-----------
Income Taxes - Current 1,582,246
- Deferred (2,624,862)
-----------
(1,042,616)
-----------
Minority Interest in Foreign Subsidiaries 348,199
-----------
Net Income (Loss) $(2,495,344)
===========
HORIZON ENERGY DEVELOPMENT, INC.
BALANCE SHEET
(Unaudited)
At June 30, 1999
----------------
ASSETS
Current Assets:
Cash $ 19,969,603
Notes Receivable - Intercompany 500,000
Accounts Receivable - Net 8,896,990
Unbilled Utility Revenue 1,834,012
Accounts Receivable - Intercompany 8,571
Materials & Supplies 4,922,127
Prepaid Expenses 67,033
------------
Total Current Assets 36,198,336
------------
Property, Plant & Equipment 262,119,154
Less: Reserve for DDA 73,571,215
------------
188,547,939
------------
Other Assets: 15,894,762
------------
Total Assets $240,641,037
============
LIABILITIES AND STOCKHOLDERS EQUITY
Capital Stock $1 Par:
Shares Authorized, Issued and Outstanding: 4,750 4,750
Paid-in Capital 38,245,591
Retained Earnings (3,662,976)
Cumulative Translation Adjustment (9,453,677)
------------
Total Stockholders Equity 25,133,688
------------
Long-Term Debt, Net of Current Portion 48,508,351
Long-Term Debt - Intercompany 90,000,000
------------
Total Long-Term Debt 138,508,351
------------
Minority Interest in Foreign Subsidiaries 24,345,719
------------
Current and Accrued Liabilities:
Current Portion of Long-Term Debt 8,990,810
Notes Payable - Intercompany 25,700,000
Accounts Payable 8,273,876
Accounts Payable - Intercompany 2,044,538
Federal Income Taxes Payable (531,918)
Other Accrued Liabilities 6,301,649
------------
Total Current and Accrued Liabilities 50,778,955
------------
Deferred Credits:
Accumulated Deferred Income Taxes 1,607,616
Other Deferred Credits 266,708
------------
Total Deferred Credits 1,874,324
------------
Total Liabilities and Stockholders Equity $240,641,037
============
