UNITED STATES OF AMERICA
Before the
SECURITIES AND EXCHANGE COMMISSION
- --------------------------------------------
In the Matter of
FIFTEENTH
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 March 31, 1999 is herein provided:
1a) Horizon's balance sheet at March 31, 1999 is attached as Exhibit 1.
1b) National's balance sheet at March 31, 1999 is included in National's
Form 10-Q for the quarter ended March 31, 1999 which was filed with
the Commission on May 17, 1999 and is incorporated herein by
reference.
2a) Horizon's income statement for the quarter ended March 31, 1999 is
attached as Exhibit 2.
2b) National's income statement for the quarter ended March, 1999
is included in National's Form 10-Q for the quarter ended March
1999, which was filed with the Commission on May 17, 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 March 31, 1999.
None.
4) A general description of the activities of the Applicants for
the quarter ended March 31, 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 March
31, 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 March 31, 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 is expected to take place in June or July, 1999.
As of March 31, 1999 HEDBV owned approximately 86.17% 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".
<PAGE>
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 March 31, 1999:
Neither Horizon nor National engaged in any intercompany service
transactions with affiliated Intermediate Companies.
May 27, 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
Exhibit 1
HORIZON ENERGY DEVELOPMENT, INC.
BALANCE SHEET
(Unaudited)
At March 31, 1999
-----------------
ASSETS
Current Assets:
Cash $ 9,671,703
Notes Receivable - Intercompany 100,000
Accounts Receivable - Net 19,497,886
Unbilled Utility Revenue 1,153,889
Accounts Receivable - Intercompany 529
Materials & Supplies 4,206,187
Prepaid Expenses 83,685
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Total Current Assets 34,713,879
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Property, Plant & Equipment 251,503,392
Less: Reserve for DDA 70,237,302
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181,266,090
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Other Assets: 17,110,213
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Total Assets $233,090,182
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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 (1,167,632)
Cumulative Translation Adjustment (11,779,566)
------------
Total Stockholders Equity 25,303,143
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Long-Term Debt, Net of Current Portion 48,044,831
Long-Term Debt - Intercompany 90,000,000
------------
Total Long-Term Debt 138,044,831
------------
Minority Interest in Foreign Subsidiaries 23,622,104
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Current and Accrued Liabilities:
Current Portion of Long-Term Debt 9,025,741
Notes Payable - Intercompany 16,100,000
Accounts Payable 6,561,789
Accounts Payable - Intercompany 4,131,290
Federal Income Taxes Payable (390,396)
Other Accrued Liabilities 9,113,867
------------
Total Current and Accrued Liabilities 44,542,291
------------
Deferred Credits:
Accumulated Deferred Income Taxes 1,613,758
Other Deferred Credits (35,945)
------------
Total Deferred Credits 1,577,813
------------
Total Liabilities and Stockholders Equity $233,090,182
============
Exhibit 2
HORIZON ENERGY DEVELOPMENT, INC.
INCOME STATEMENT
(Unaudited)
Three Months Ended
March 31, 1999
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Operating Revenues $40,812,260
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Operating Expenses:
Fuel Used in Heat and Electric Generation 17,483,013
Operation Expense 7,890,139
Maintenance Expense 5,576
Property, Franchise and Other Taxes 696,392
Depreciation, Depletion and Amortization 2,817,713
-----------
Total Operating Expenses 28,892,833
-----------
Operating Income 11,919,427
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Other Income 422,584
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Interest Charges 2,538,015
-----------
Income Before Income Taxes 9,803,996
-----------
Income Taxes - Current 1,177,047
- Deferred 794,440
-----------
1,971,487
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Minority Interest in Foreign Subsidiaries (1,623,933)
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Net Income $ 6,208,576
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