UNITED STATES OF AMERICA
Before the
SECURITIES AND EXCHANGE COMMISSION
- --------------------------------------------
In the Matter of
NATIONAL FUEL GAS COMPANY NINTH
NATIONAL FUEL GAS DISTRIBUTION CORPORATION CERTIFICATE
NATIONAL FUEL GAS SUPPLY CORPORATION PURSUANT TO
SENECA RESOURCES CORPORATION RULE 24
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"), Highland Land & Minerals, Inc. ("Highland") on its own
behalf and as successor by merger to Utility Constructors, Inc. ("UCI"), 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
-------------------------
BORROWING BY NATIONAL
- ---------------------
a. Short-term Debt
---------------
National borrowed funds 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, 2000 ("Quarter")
as summarized below:
---------------------------------------------------------------------------
At Beginning At End Maximum Level Minimum Level
of Quarter of Quarter of Such Short-term Debt Of Such Short-term Debt
---------- ---------- ----------------------- -----------------------
$29,900,000 $29,600,000 $30,400,000 $29,000,000
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 15, 2000
National sold $150,000,000 principal amount of median term notes ("MTNs")
through underwriters. These MTNs were issued on February 18, 2000 and will
mature on February 18, 2003 (or the first business day thereafter). The MTNs
have a coupon rate of 7.30%. The proceeds were used to redeem $50,000,000 of
6.60% MTNs which matured in February and to reduce short-term debt. In addition,
National has no preferred stock outstanding.
(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
- ------------ ------------- ---------------------------------
Direct Stock Purchase and 37,643 N/A
Dividend Reinvestment Plan
Tax Deferred Savings 33,036 N/A
Plans [401(k)]
Retainer Policy for 653 N/A
Outside Directors
1997 Award & Option Plan - 0 - - 0 -
1993 Award and Option Plan 50,500 - 0 -
1984 Stock Plan 2,000 - 0 -
1983 Incentive Stock Option 5,220 - 0 -
Plan
Total Number of 129,052 - 0 -
Shares Issued/Exchanged
Net New Shares 129,052
Aggregate Consideration received upon issuance of 129,052 shares: $5,209.543.
The purpose of National's former Customer Stock Purchase Plan and its
former Dividend Reinvestment and Stock Purchase Plan was 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. Effective November 1, 1999, these plans were combined into a
new plan known as the National Fuel Direct Stock Purchase and Dividend
Reinvestment Plan.
The purpose of National's two Tax-Deferred Savings Plans is to
encourage certain 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 certain
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.
On February 17, 2000, pursuant to the National Fuel Gas Company 1997
Award and Option Plan, the Compensation Committee of the Board of Directors of
National awarded stock appreciation rights pertaining to 7,656 shares of stock
and stock options pertaining to 7,656 shares of stock.
(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 as contemplated by the Application-Declaration 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
thereof which were not needed for National's own corporate purposes were loaned
by National to certain Subsidiaries that borrowed either directly or through the
Money Pool during the Quarter.
Commercial Paper Outstanding
------------------------------------------------------------------
Maximum Amount Minimum Amount
At Beginning At End Outstanding During Outstanding During
of Quarter of Quarter Quarter Quarter
---------- ---------- ------- -------
$199,400,000 $199,200,000 $200,000,000 $165,000,000
b. National issued short-term notes to banks or other financial
institutions during the Quarter. The proceeds thereof which were not needed for
National's own corporate purposes were loaned by National to certain
Subsidiaries that borrowed either directly or 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 During Outstanding During
of Quarter of Quarter Quarter Quarter
---------- ---------- ------- -------
$228,000,000 $44,400,000 $263,400,000 $18,500,000
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 $492,400,000, 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 $536,100,000.
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 $42,500,000 $46,900,000 $48,200,000 $44,400,000
Distribution 0 0 0 0
Supply 0 0 0 0
Seneca 14,800,000 17,400,000 17,500,000 14,500,000
Highland 0 0 0 0
Leidy 700,000 800,000 800,000 700,000
Data-Track 600,000 700,000 700,000 600,000
NFR 1,400,000 0 3,100,000 0
Horizon Energy 0 0 500,000 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. Horizon Energy does
not borrow from the Money Pool.
Borrowings from the Money Pool
-------------------------------------------------------
At Beginning At End Maximum Minimum
of Quarter of Quarter Borrowed Borrowed
---------- ---------- -------- --------
Distribution $119,200,000 $ 40,000,000 $149,900,000 $ 14,600,000
Supply 40,200,000 54,600,000 62,700,000 37,500,000
Seneca 257,700,000 141,700,000 260,400,000 137,100,000
UCI 0 0 0 0
Highland 53,200,000 52,600,000 53,200,000 52,300,000
Leidy 0 0 0 0
Data-Track 0 0 0 0
NFR 7,000,000 8,700,000 12,500,000 0
Horizon Energy 0 0 0 0
SIP 10,700,000 11,200,000 11,200,000 10,700,000
NIM 0 0 0 0
Upstate 5,200,000 2,600,000 5,200,000 2,500,000
f. National increased its bank lines as follows: The Chase Manhattan
Bank increased its discretionary lending line from $150 million to $250 million,
and Banca Nazionale del Lavoro increased its discretionary lending line from $20
million to $25 million. National remains subject to the overall limit of $750
million as set out in the Order.
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 $9,000,000. The maximum amount of
guarantees or credit support that National had outstanding to its Subsidiaries
at any time during the quarter was $181,310,000.
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 other than
set forth below, and neither National or any of its Subsidiaries made any
investments in energy-related companies and gas-related companies under Rule 58
other than loans reported on National's Form U-6B-2 and/or Form U-9C-3 for the
Quarter. In February, National made a capital contribution of $5,000,000 to NFR
Power, Inc., a wholly-owned EWG.
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.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Public Utility Holding Company Act
of 1935, the undersigned companies have duly caused this Ninth Certificate
Pursuant to Rule 24 to be signed on their behalf by the undersigned thereunto
duly authorized.
NATIONAL FUEL GAS COMPANY
By: /s/ P. C. Ackerman
------------------------------------
P. C. Ackerman
President
NATIONAL FUEL GAS DISTRIBUTION
CORPORATION
By: /s/ D. F. Smith
------------------------------------
D. F. Smith
President
SENECA RESOURCES CORPORATION
By: /s/ J. A. Beck
------------------------------------
J. A. Beck
President
NATIONAL FUEL GAS SUPPLY CORPORATION
By: /s/ D. J. Seeley
------------------------------------
D. J. Seeley
President
NATIONAL FUEL RESOURCES, INC.
By: /s/ R. J. Kreppel
------------------------------------
R. J. Kreppel
President
HORIZON ENERGY DEVELOPMENT, INC.
By: /s/ P. C. Ackerman
------------------------------------
P. C. Ackerman
President
HIGHLAND LAND & MINERAL, INC.
By: /s/ J. A. Beck
------------------------------------
J. A. Beck
President
DATA-TRACK ACCOUNT SERVICES, INC.
By: /s/ P. C. Ackerman
------------------------------------
P. C. Ackerman
President
LEIDY HUB, INC.
By: /s/ W. E. DeForest
------------------------------------
W. E. DeForest
President
SENECA INDEPENDENCE PIPELINE COMPANY
By: /s/ W. E. DeForest
-----------------------------------
W. E. DeForest
President, Secretary & Treasurer
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 19, 2000
