UNITED STATES OF AMERICA
Before the
SECURITIES AND EXCHANGE COMMISSION
- --------------------------------------------
In the Matter of
NATIONAL FUEL GAS COMPANY FIFTH
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.
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 March 31, 1999 ("Quarter"):
---------------------------------------------------------------------------
At Beginning At End Maximum Level Minimum Level
of Quarter of Quarter of Such Short-term Debt of Such Short-term Debt
$11,000,000 $16,100,000 $16,100,000 $11,000,000
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 February 23, 1999 National
sold $100,000,000 principal amount of medium term notes ("MTNs") through
underwriters. These MTNs were issued on February 26, 1999 and will mature on
March 1, 2009 (or the first business day thereafter). The MTNs have a coupon
rate of 6.00%. The proceeds were used to refund $100,000,000 of MTNs that
matured on March 1, 1999.
(2) Stock Issuance Plans
During the Quarter, National issued the following shares of common stock
through the following plans ("Stock Issuance Plans"):
Number of Number of Shares Exchanged as
Name Of Plan Shares Issued Consideration for Share Issuances
- ------------ ------------- ---------------------------------
Customer Stock Purchase 9,748 N/A
Plan
Dividend Reinvestment and 29,234 N/A
Stock Purchase Plan
Tax Deferred Savings 31,670 N/A
Plans [401(k)]
Retainer Policy for 700 N/A
Outside Directors
1997 Award and Option - 0 - - 0 -
Plan
1993 Award and Option 4,162 - 0 -
Plan
1984 Stock Plan 10,174 - 0 -
1983 Incentive Stock Option 6,039 - 0 -
Plan
Total Number of N/A - 0 -
Shares Issued/Exchanged
Net New Shares 91,027
Aggregate Consideration received upon issuance of 91,027 shares: $3,642,596.10.
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.
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) 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.
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 either directly or through the Money Pool
during the Quarter.
Commercial Paper Outstanding
--------------------------------------------------------------------------
Maximum Amount Minimum Amount
At Beginning At End Oustanding During Outstanding During
of Quarter of Quarter Quarter Quarter
---------- ---------- ------- -------
$150,000,000 $150,000,000 $150,000,000 $150,000,000
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 Oustanding During Outstanding During
of Quarter of Quarter Quarter Quarter
---------- ---------- ------- -------
$231,200,000 $196,000,000 $236,500,000 $158,100,000
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 $399,700,000, 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 $448,500,000.
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 $43,600,000 $36,700,000 $46,200,000 $36,700,000
Distribution 0 0 0 0
Supply 0 0 0 0
Seneca 13,900,000 14,300,000 15,600,000 13,400,000
UCI 400,000 400,000 400,000 400,000
Highland 0 0 0 0
Leidy 700,000 700,000 700,000 700,000
Data-Track 700,000 700,000 700,000 700,000
NFR 0 0 0 0
Horizon Energy 300,000 100,000 700,000 100,000
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 Borowed
---------- ---------- -------- -------
Distribution $ 80,700,000 $ 53,700,000 $ 80,700,000 $ 6,200,000
Supply 58,300,000 57,700,000 68,100,000 51,500,000
Seneca 280,600,000 263,500,000 299,000,000 247,000,000
UCI 0 0 0 0
Highland 2,000,000 3,600,000 4,000,000 1,900,000
Leidy 0 0 0 0
Data-Track 0 0 0 0
NFR 9,700,000 9,700,000 14,000,000 6,900,000
Horizon Energy 0 0 0 0
SIP 7,500,000 9,300,000 9,300,000 7,500,000
NIM 0 0 0 0
Upstate 2,000,000 1,400,000 2,000,000 900,000
3. USE OF PROCEEDS
---------------
National has used the proceeds of the aforementioned issuances of
short-term debt, and the borrowing Subsidiaries have used the proceeds of their
Money Pool 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 $23,500,000. The maximum amount of guarantees or
credit support that National had outstanding to its Subsidiaries at any time
during the quarter was $166,560,000.
All guarantees relate to gas transportation, purchases or sales, or other
credit support agreements relating to the Subsidiaries' existing businesses.
7. ACQUISITIONS OF EWG'S, FUCO'S AND RULE 58 COMPANIES
---------------------------------------------------
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 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.
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 First 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/ James A. Beck
------------------------------------
James A. Beck
President
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 & MINERAL, INC.
By: /s/ James A. Beck
------------------------------------
James A. Beck
President
DATA-TRACK ACCOUNT SERVICES, INC.
By: /s/ Philip C. Ackerman
------------------------------------
Philip C. Ackerman
President
LEIDY HUB, INC.
By: /s/ Walter E. DeForest
------------------------------------
Walter E. DeForest
President
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: May 18, 1999
