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 supplemental order 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, 1996:
Attached as Exhibit A.
(2) INCOME STATEMENT FOR THE QUARTER ENDED SEPTEMBER 30, 1996:
Attached as Exhibit B.
(3) GENERAL DESCRIPTION OF THE ACTIVITIES OF CHARTER OAK FOR THE QUARTER
ENDED SEPTEMBER 30, 1996, AND OF THE PROJECTS IN WHICH CHARTER OAK OR
ITS SUBSIDIARIES HAVE AN INTEREST:
During the third quarter of 1996, 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.
On December 5, 1995, Charter Oak filed a Form U-57 notifying the
Commission of foreign utility company status for Ave Fenix Energia S.A. ("Ave
Fenix"), the 168 MW natural gas project currently under construction in the
Republic of Argentina. Charter Oak through its wholly-owned subsidiary COE
Ave Fenix Corporation, will own approximately 96% of the issued and
outstanding common stock of Ave Fenix. Synchronization with the grid and
commencement of testing occurred in October 1996.
On December 8, 1995, the 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 commenced commercial operation. Charter Oak, through its wholly-
owned subsidiary COE Argentina II Corp., owns 33.33% of the issued and
outstanding common stock of C.T.S.M.T.
On June 24, 1996, the Plantas Eolicas S.A., the 20 MW wind project in
Costa Rica, synchronized with the grid. Charter Oak, through its
wholly-owned subsidiary COE Tejona Corporation, will own approximately 65% of
the issued and outstanding common stock of Plantas Eolicas. It is
anticipated that a Costa Rican company will hold the remaining 35% of the
common stock of Plantas Eolicas.
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.
N.A.
(6) INFORMATION ON INTERCOMPANY SERVICE TRANSACTIONS INVOLVING AFFILIATED
INTERMEDIATE COMPANIES, EWGs AND FUCOs FOR THE QUARTER ENDING SEPTEMBER
30, 1996.
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, 1996 is
approximately $53 million.
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 29, 1996
EXHIBIT A
CHARTER OAK ENERGY, INC. AND SUBSIDIARIES
-----------------------------------------
CONSOLIDATED BALANCE SHEETS (UNAUDITED)
---------------------------------------
September 30,
---------------------------
1996 1995
------------ ------------
(Thousands of Dollars)
ASSETS
- ------
Utility Plant, at original cost:
Electric $ 52 $ 52
Less: Accumulated provision for
depreciation 49 47
------------ ------------
Total net utility plant 3 5
------------ ------------
Other Investments, at cost 56,752 23,343
------------ ------------
Current Assets:
Cash 438 557
Accounts receivable - 10
Taxes receivable 136 721
------------ ------------
574 1,288
------------ ------------
Deferred Charges:
Accumulated deferred income taxes 130 375
Deferred development costs 9,621 3,567
Other 707 696
------------ ------------
10,458 4,638
------------ ------------
Total Assets $ 67,787 $ 29,274
============ ============
CAPITALIZATION AND LIABILITIES
- ------------------------------
Capitalization:
Common stock $ - $ -
Capital surplus, paid in 84,648 43,194
Retained earnings (17,458) (14,763)
------------ ------------
Total capitalization 67,190 28,431
------------ ------------
Minority interest in common equity
of subsidiaries (105) 10
------------ ------------
Current Liabilities:
Accounts payable 121 453
Accounts payable to affiliated companies 300 227
Other 281 153
------------ ------------
702 833
------------ ------------
Total Capitalization and Liabilities $ 67,787 $ 29,274
============ ============
EXHIBIT B
CHARTER OAK ENERGY, INC. AND SUBSIDIARIES
-----------------------------------------
CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
---------------------------------------------
Three Months Ended
September 30,
---------------------------
1996 1995
------------ ------------
(Thousands of Dollars)
Operating Revenues $ - $ -
------------ ------------
Operating Expenses:
Operation and maintenance 1,299 2,066
Depreciation 165 165
Federal and state income taxes (260) (845)
Taxes other than income taxes 6 6
------------ ------------
Total operating expenses 1,210 1,392
------------ ------------
Operating Loss (1,210) (1,392)
------------ ------------
Other Income:
Investment income 1,255 207
Other, net (35) 40
------------ ------------
Total other income 1,220 247
------------ ------------
Loss before interest charges 10 (1,145)
------------ ------------
Interest Charges 4 14
------------ ------------
Net Income (Loss) $ 6 $ (1,159)
============ ============
Charter Oak Energy and Subsidiaries Exhibit C
Detail of Intercompany Services
Third Quarter Ending September 30, 1996
Charter Oak Energy
------------------
NON-
Service Type of Services PAYROLL PAYROLL TOTAL
Provided By Provided
- -----------------------------------------------------------------------------
NUSCO Charter Oak staff 143,657 86,514 230,171
Accounting and financial services 6,829 745 7,574
Legal services 734 368 1,102
Miscellaneous 5,766 1,030 6,796
---------------------------
Total NUSCO Services 156,986 88,657 245,643
---------------------------
CHARTER OAK
DEVELOPMENT
CORP Legal services 0 1,363 1,363
Miscellaneous 0 2,451 2,451
---------------------------
Total Charter Development
Corp Services 0 3,814 3,814
---------------------------
Total Services Provided 156,986 92,471 249,457
===========================
COE Development Corp.
---------------------
NON-
Service Type of Services PAYROLL PAYROLL TOTAL
Provided By Provided
- -----------------------------------------------------------------------------
NUSCO Charter Oak staff 383,167 246,390 629,557
Engineering services 2,398 0 2,398
Legal services 0 8,217 8,217
Miscellaneous 1,618 10 1,628
-------------------------
Total NUSCO Services 387,183 254,617 641,800
-------------------------
CL&P Miscellaneous 1,511 660 2,171
-------------------------
Total CL&P Services 1,511 660 2,171
-------------------------
PSNH Miscellaneous 0 318 318
-------------------------
Total PSNH Services 0 318 318
-------------------------
CHARTER OAK Miscellaneous 0 1,810 1,810
ENERGY -------------------------
Total COE Services 0 1,810 1,810
-------------------------
Total Services Provided 388,694 257,405 646,099
=========================
COE (UK) Corp.
--------------
NON-
Service Type of Services PAYROLL PAYROLL TOTAL
Provided By Provided
- -----------------------------------------------------------------------------
NUSCO Charter Oak staff 4,559 6,449 11,008
-------------------------
Total Services Provided 4,559 6,449 11,008
=========================
COE Argentina II Corporation
----------------------------------
NON-
Service Type of Services PAYROLL PAYROLL TOTAL
Provided By Provided
- -----------------------------------------------------------------------------
NUSCO Charter Oak Staff 0 944 944
--------------------------
Total Services Provided 0 944 944
==========================
COE Tejona Corp.
----------------------------------
NON-
Service Type of Services PAYROLL PAYROLL TOTAL
Provided By Provided
- -----------------------------------------------------------------------------
NUSCO Miscellaneous 0 (657) (657)
--------------------------
Total Services Provided 0 (657) (657)
==========================
