UNITED STATES OF AMERICA
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Application of Northeast )
) CERTIFICATE PURSUANT TO
Utilities, Charter Oak Energy ) RULE 24 UNDER THE PUBLIC
) UTILITY HOLDING COMPANY ACT
Inc. and COE Development ) OF 1935
)
Corp. on Form U-1 )
)
(File No. 70-8507) )
Pursuant to the requirements of Rule 24 under the Public Utility Holding
Company Act of 1935, Charter Oak Energy, Inc. ("Charter Oak"), a wholly-owned
subsidiary of Northeast Utilities ("NU"), a registered holding company,
hereby files this quarterly report as required by the Securities and Exchange
Commission's orders authorizing preliminary development activities and financing
related to such activities and to acquisitions of interests in exempt wholesale
generators ("EWGs") and foreign utility companies ("FUCOs") by Charter Oak
(HCAR. No. 26134, September 30, 1994, File No. 70-8062, HCAR. No. 26213,
December 30, 1994, File No. 70-8507, and HCAR. No. 26354, August 7, 1995, File
No. 70-8507).
(1) BALANCE SHEET AS OF SEPTEMBER 30, 1995:
Attached as Exhibit A.
(2) INCOME STATEMENT FOR THE QUARTER ENDED SEPTEMBER 30, 1995:
Attached as Exhibit B.
(3) GENERAL DESCRIPTION OF THE ACTIVITIES OF CHARTER OAK FOR THE QUARTER
ENDED SEPTEMBER 30, 1995, AND OF THE PROJECTS IN WHICH CHARTER OAK OR ITS
SUBSIDIARIES HAVE AN INTEREST:
During the third quarter of 1995, pursuant to the permission granted by
the Commission in the September 30, 1994 (HCAR. No. 26134), December 30, 1994
(HCAR. No. 26213) and August 7, 1995 (HCAR. No. 26354) orders, Charter Oak,
through its wholly-owned subsidiary COE Development Corporation ("COE
Development"), has participated in preliminary development activities for EWGs
and FUCOs. These activities have been performed by COE Development both on its
own and with unaffiliated third parties.
On August 7, 1995 the Commission authorized NU to make investments in
Charter Oak, and Charter Oak to make investments in COE Development, in the
amount of up to $400 million, through December 31, 1996, for preliminary
development activities and for acquisitions of interests in EWGs and FUCOs.
This authorization includes preliminary development of domestic projects as well
as investments in EWGs and FUCOs.
COE Development is engaged in constructing a 114 MW natural gas-fired
project (Central Termica San Miguel de Tucuman, S.A., "C.T.S.M.T.") located in
the Republic of Argentina. Synchronization with the grid occurred on October
11, 1995. Construction continues on a 20 MW wind project in Costa Rica.
Finally, COE Development plans to begin construction of a 168 MW natural
gas-fired project (Ave Fenix) located in the Republic of Argentina.
Charter Oak, through its wholly-owned subsidiary Charter Oak (Paris), Inc.,
pursuant to the permission granted by the Commission (HCAR. No. 24893), has an
approximately 10% beneficial equity ownership interest in a 213 MW gas-fired
operational qualifying cogeneration facility in Paris, Texas.
On September 24, 1993, NU was granted permission (HCAR. No. 70-8084) to
invest up to $7 million in Charter Oak for the purchase of an interest in two
non-utility subsidiaries to own an interest in a foreign utility company, Encoe
Partners. Encoe Partners is a general partnership formed for the sole purpose
of building, owning and operating a power generating facility in the United
Kingdom ("Power Plant") and acquiring a one-third interest in certain rights and
obligations under a power contract. The Power Plant is 2.176 MW and will
produce power by harnessing the pressure in the natural gas pipeline feeding the
1,875 MW Teesside Project in Teesside, Wilton, Cleveland, England. This
transaction was completed by Charter Oak on the close of business on September
30, 1993 by acquiring interests in two non-utility subsidiary companies, COE
(UK) Corp. and COE (GENCOE) Corp.
At this time, none of the other projects Charter Oak is currently pursuing
are sufficiently defined to move beyond the preliminary development stage and
therefore are not contained in this report.
(4) THE AMOUNTS OF RECOURSE AND NON-RECOURSE DEBT SECURITIES ISSUED TO THIRD
PARTIES BY INTERMEDIATE COMPANIES:
N.A.
(5) REGULATORY STATUS OF FACILITIES ELIGIBLE FOR EXEMPTION AS A PUBLIC
UTILITY UNDER THE ACT.
Charter Oak is preparing to file two Form U-57s notifying the Commission
of foreign utility company status: 1.) for the Costa Rica wind project
currently under construction and 2.) for the 168 MW natural gas-fired
Ave Fenix project in the Republic of Argentina.
(6) INFORMATION ON INTERCOMPANY SERVICE TRANSACTIONS INVOLVING AFFILIATED
INTERMEDIATE COMPANIES, EWGS AND FUCOs FOR THE QUARTER ENDING SEPTEMBER
30, 1995.
Attached as Exhibit C.
The aggregate amount of all guarantees issued by or for Charter Oak or
any of its subsidiary companies for the quarter ending September 30,
1995 is approximately $20.1 million.
On August 4, 1995, Charter Oak Energy, Inc. (COE) entered into a contract
guaranteeing the payment of the contract price of a construction contract
between a subsidiary company and a third party vendor. COE's cumulative
aggregate liability, as guarantor, under this contract is approximately
$20 million. COE is a wholly-owned subsidiary of Northeast Utilities
(NU), which has agreed to provide, if needed, the funds necessary to meet
the terms of the guarantee. COE expects that the subsidiary will meet its
contractual obligations and COE will not be called upon to perform under
this guarantee.
SIGNATURE
Pursuant to the requirements of the Public Utility Holding Company Act
of 1935, the undersigned company has duly caused this Certificate to be
signed on its behalf by the undersigned thereunto duly authorized.
Charter Oak Energy, Inc.
/s/ Eugene G. Vertefeuille
Principal
Charter Oak Energy, Inc.
P.O. Box 270
Hartford, CT 06141-0270
November 28, 1995
CHARTER OAK ENERGY, INC. AND SUBSIDIARIES EXHIBIT A
-----------------------------------------
CONSOLIDATED BALANCE SHEETS (UNAUDITED)
---------------------------------------
September 30,
---------------------------
1995 1994
------------ ------------
(Thousands of Dollars)
ASSETS
- ------
Utility Plant, at original cost:
Electric $ 52 $ 52
Less: Accumulated provision for
depreciation 47 44
------------ ------------
Total net utility plant 5 8
------------ ------------
Other Investments, at cost 23,343 6,267
------------ ------------
Current Assets:
Cash 557 6,329
Accounts receivable 10 -
Receivables from affiliated companies - 1
Taxes receivable 721 -
------------ ------------
1,288 6,330
------------ ------------
Deferred Charges:
Accumulated deferred income taxes 375 529
Deferred development costs 3,567 2,447
Other 696 858
------------ ------------
4,638 3,834
------------ ------------
Total Assets $ 29,274 $ 16,439
============ ============
CAPITALIZATION AND LIABILITIES
- ------------------------------
Capitalization:
Common stock $ - $ -
Capital surplus, paid in 43,194 25,236
Retained earnings (14,763) (9,875)
------------ ------------
Total capitalization 28,431 15,361
------------ ------------
Minority interest in common equity
of subsidiaries 10 48
------------ ------------
Current Liabilities:
Accounts payable 453 1
Accounts payable to affiliated companies 227 132
Taxes accrued - 836
Other 153 61
------------ ------------
833 1,030
------------ ------------
Total Capitalization and Liabilities $ 29,274 $ 16,439
============ ============
EXHIBIT B
CHARTER OAK ENERGY, INC. AND SUBSIDIARIES
-----------------------------------------
CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
---------------------------------------------
Three Months Ended
September 30,
---------------------------
1995 1994
------------ ------------
(Thousands of Dollars)
Operating Revenues $ - $ -
------------ ------------
Operating Expenses:
Operation and maintenance 2,066 1,788
Depreciation 165 162
Federal and state income taxes (845) (859)
Taxes other than income taxes 6 7
------------ ------------
Total operating expenses 1,392 1,098
------------ ------------
Operating Loss (1,392) (1,098)
------------ ------------
Other Income:
Investment income 207 323
Other, net 40 25
------------ ------------
Total other income 247 348
------------ ------------
Loss before interest charges (1,145) (750)
------------ ------------
Interest Charges 14 2
------------ ------------
Net Loss $ (1,159) $ (752)
============ ============
EXHIBIT C
Charter Oak Energy and Subsidiaries
Detail of Intercompany Services
Third Quarter Ending September 30, 1995
Charter Oak Energy
------------------
NON-
Service Type of Services PAYROLL PAYROLL TOTAL
Provided By-- Provided--
- -----------------------------------------------------------------
NUSCO Charter Oak staff 181,562 31,721 213,283
Accounting and
financial services 9,756 127 9,883
Legal services 4,614 81,041 85,655
Miscellaneous 6,950 341 7,291
----------------------------
Total NUSCO Services 202,882 113,230 316,112
----------------------------
COE DEVELOPMENT
CORP
Legal services 0 2,510 2,510
Miscellaneous 0 19,626 19,626
----------------------------
Total COE
Development Corp
Services 0 22,136 22,136
----------------------------
Total Services
Provided 202,882 135,366 338,248
============================
COE Paris, Inc.
---------------------
NON-
Service Type of Services PAYROLL PAYROLL TOTAL
Provided By-- Provided--
- -----------------------------------------------------------------
NUSCO Legal services 50 0 50
----------------------------
Total NUSCO Services 50 0 50
----------------------------
Total Services
Provided 50 0 50
==============================
COE Development Corp.
---------------------
NON-
Service Type of Services PAYROLL PAYROLL TOTAL
Provided By-- Provided--
- -----------------------------------------------------------------
NUSCO Charter Oak staff 284,616 140,619 425,235
Engineering services 95,728 25,232 120,960
Accounting and
financial services 2,529 150 2,679
Legal services 0 78,499 78,499
Miscellaneous 12,439 15,629 28,068
----------------------------
Total NUSCO Services 395,312 260,129 655,441
----------------------------
CL&P Engineering services 0 6,103 6,103
Miscellaneous 0 10,934 10,934
----------------------------
Total CL&P Services 0 17,037 17,037
----------------------------
CHARTER OAK
ENERGY Legal services 0 67,500 67,500
----------------------------
Total COE Services 0 67,500 67,500
----------------------------
Total Services
Provided 395,312 344,666 739,978
============================
COE (UK) Corp.
--------------
NON-
Service Type of Services PAYROLL PAYROLL TOTAL
Provided By-- Provided--
- -----------------------------------------------------------------
NUSCO Charter Oak staff 4,659 1,698 6,357
--------------------------
Total NUSCO Services 4,659 1,698 6,357
--------------------------
CHARTER OAK
ENERGY Charter Oak staff 0 5,424 5,424
--------------------------
Total COE Services 0 5,424 5,424
--------------------------
COE
DEVELOPMENT
CORP Legal services 0 2,001 2,001
Miscellaneous 0 25 25
-------------------------
Total COE Development
Corp Services 0 2,026 2,026
-------------------------
Total Services
Provided 4,659 9,148 13,807
=========================
COE Tejona Corp.
----------------
NON-
Service Type of Services PAYROLL PAYROLL TOTAL
Provided By-- Provided--
- -----------------------------------------------------------------
NUSCO Accounting
information services 0 223 223
Miscellaneous 0 143 143
------------------------
Total NUSCO Services 0 366 366
========================
