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 March 31, 1996:
Attached as Exhibit A.
(2) INCOME STATEMENT FOR THE QUARTER ENDED MARCH 31, 1996:
Attached as Exhibit B.
(3) GENERAL DESCRIPTION OF THE ACTIVITIES OF CHARTER OAK FOR THE QUARTER
ENDED MARCH 31, 1996, AND OF THE PROJECTS IN WHICH CHARTER OAK OR ITS
SUBSIDIARIES HAVE AN INTEREST:
During the first 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 is expected in June or July 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 January 26, 1996, Charter Oak filed a Form U-57 notifying the
Commission of foreign utility company status for Plantas Eolicas S.A., the 20
MW wind project currently under construction in Costa Rica. 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. Synchronization with
the grid and commencement of testing is expected by June 1996.
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 MARCH
31, 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 March 31, 1996 is
approximately $26.1 million.
On August 4, 1995, Charter Oak entered into a contract guaranteeing the
payment of the contract price of a construction contract between a subsidiary
company and a third party vendor. Charter Oak's cumulative aggregate
liability, as guarantor, under this contract is approximately $20 million.
NU has agreed to provide, if needed, the funds necessary to meet the terms of
the guarantee. Charter Oak expects that the subsidiary will meet its
contractual obligations and Charter Oak 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
May 28, 1996
EXHIBIT A
CHARTER OAK ENERGY, INC. AND SUBSIDIARIES
-----------------------------------------
CONSOLIDATED BALANCE SHEETS (UNAUDITED)
---------------------------------------
March 31,
---------------------------
1996 1995
------------ ------------
(Thousands of Dollars)
ASSETS
- ------
Utility Plant, at original cost:
Electric $ 52 $ 52
Less: Accumulated provision for
depreciation 48 46
------------ ------------
Total net utility plant 4 6
------------ ------------
Other Investments, at cost 41,547 15,419
------------ ------------
Current Assets:
Cash 1,013 479
Receivables 2 -
------------ ------------
1,015 479
------------ ------------
Deferred Charges:
Accumulated deferred income taxes 130 690
Deferred development costs 6,554 2,641
Other 699 795
------------ ------------
7,383 4,126
------------ ------------
Total Assets $ 49,949 $ 20,030
============ ============
CAPITALIZATION AND LIABILITIES
- ------------------------------
Capitalization:
Common stock $ - $ -
Capital surplus, paid in 65,937 31,367
Retained earnings (17,071) (12,859)
------------ ------------
Total capitalization 48,866 18,508
------------ ------------
Minority interest in common equity
of subsidiaries (69) 60
------------ ------------
Current Liabilities:
Accounts payable 536 555
Accounts payable to affiliated companies 432 374
Taxes accrued 24 375
Other 160 158
------------ ------------
1,152 1,462
------------ ------------
Total Capitalization and Liabilities $ 49,949 $ 20,030
============ ============
EXHIBIT B
CHARTER OAK ENERGY, INC. AND SUBSIDIARIES
-----------------------------------------
CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
---------------------------------------------
Three Months Ended
March 31,
---------------------------
1996 1995
------------ ------------
(Thousands of Dollars)
Operating Revenues $ - $ -
------------ ------------
Operating Expenses:
Operation and maintenance 1,137 1,254
Depreciation 165 165
Federal and state income taxes (244) (634)
Taxes other than income taxes 4 5
------------ ------------
Total operating expenses 1,062 790
------------ ------------
Operating Loss (1,062) (790)
------------ ------------
Other Income:
Investment income 692 417
Other, net 7 5
------------ ------------
Total other income 699 422
------------ ------------
Loss before interest charges (363) (368)
------------ ------------
Interest Charges 4 2
------------ ------------
Net Loss $ (367) $ (370)
============ ============
Charter Oak Energy and Subsidiaries Exhibit C
Detail of Intercompany Services
First Quarter Ending March 31, 1996
Charter Oak Energy
------------------
NON-
Service Type of Services PAYROLL PAYROLL TOTAL
Provided By Provided
- -----------------------------------------------------------------------------
NUSCO Charter Oak staff 130,363 25,421 155,784
Accounting and financial services 7,894 20,131 28,025
Legal services 913 493 1,406
Miscellaneous 3,033 5,724 8,757
---------------------------
Total NUSCO Services 142,203 51,769 193,972
---------------------------
CL&P Miscellaneous 0 86 86
Outside Services 0 246 246
---------------------------
Total CL&P Services 0 332 332
---------------------------
CHARTER OAK
DEVELOPMENT
CORP Legal services 0 2,844 2,844
Miscellaneous 0 1,706 1,706
---------------------------
Total Charter Development
Corp Services 0 4,550 4,550
---------------------------
Total Services Provided 142,203 56,651 198,854
===========================
COE Development Corp.
---------------------
NON-
Service Type of Services PAYROLL PAYROLL TOTAL
Provided By Provided
- -----------------------------------------------------------------------------
NUSCO Charter Oak staff 372,457 200,277 572,734
Engineering services 6,698 7,012 13,710
Legal services 0 103,017 103,017
Miscellaneous 2,090 30,869 32,959
-------------------------
Total NUSCO Services 381,245 341,175 722,420
-------------------------
CL&P Miscellaneous 4,489 2,589 7,078
-------------------------
Total CL&P Services 4,489 2,589 7,078
-------------------------
PSNH Engineering services 0 7,638 7,638
Legal services 0 5,677 5,677
Miscellaneous 8,684 0 8,684
-------------------------
Total PSNH Services 8,684 13,315 21,999
-------------------------
WMECO Engineering services 0 0 0
Legal services 79 40 119
-------------------------
Total WMECO Services 79 40 119
-------------------------
Total Services Provided 394,497 357,119 751,616
=========================
COE (UK) Corp.
--------------
NON-
Service Type of Services PAYROLL PAYROLL TOTAL
Provided By Provided
- -----------------------------------------------------------------------------
NUSCO Charter Oak staff 2,605 1,046 3,651
Accounting and financial services 0 0 0
-------------------------
Total NUSCO Services 2,605 1,046 3,651
-------------------------
CHARTER OAK
ENERGY Outside Services 0 27 27
-------------------------
Total COE Services 0 27 27
-------------------------
CHARTER OAK
DEVELOPMENT CORP Legal services 0 85 85
Miscellaneous 0 7,883 7,883
-------------------------
Total Charter Oak
Development Services 0 7,968 7,968
-------------------------
Total Services Provided 2,605 9,041 11,646
=========================
COE Argentina II Corporation
----------------------------------
NON-
Service Type of Services PAYROLL PAYROLL TOTAL
Provided By Provided
- -----------------------------------------------------------------------------
NUSCO Charter Oak Staff 4,496 16,967 21,463
--------------------------
Total NUSCO Services 4,496 16,967 21,463
--------------------------
CHARTER OAK
DEVELOPMENT CORP Outside Services 0 8,333 8,333
--------------------------
Total COE Services 0 8,333 8,333
--------------------------
Total Services Provided 4,496 25,300 29,796
==========================
