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 DECEMBER 31, 1995:
Attached as Exhibit A.
(2) INCOME STATEMENT FOR THE QUARTER ENDED DECEMBER 31, 1995:
Attached as Exhibit B.
(3) GENERAL DESCRIPTION OF THE ACTIVITIES OF CHARTER OAK FOR THE QUARTER
ENDED DECEMBER 31, 1995, AND OF THE PROJECTS IN WHICH CHARTER OAK OR ITS
SUBSIDIARIES HAVE AN INTEREST:
During the fourth 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.
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 by mid-May.
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 mid-April.
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 filed two Form U-57s notifying the Commission of foreign
utility company status: 1.) on January 26, 1996 for the Costa Rica wind
project currently under construction and 2.) on December 5, 1995 for the 168
MW natural gas-fired Ave Fenix Energia S. A. project in the Republic of
Argentina.
(6) INFORMATION ON INTERCOMPANY SERVICE TRANSACTIONS INVOLVING AFFILIATED
INTERMEDIATE COMPANIES, EWGS AND FUCOs FOR THE QUARTER ENDING DECEMBER
31, 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 December 31, 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
February 29, 1996
CHARTER OAK ENERGY, INC. AND SUBSIDIARIES EXHIBIT A
-----------------------------------------
CONSOLIDATED BALANCE SHEETS (UNAUDITED)
---------------------------------------
December 31,
---------------------------
1995 1994
------------ ------------
(Thousands of Dollars)
ASSETS
- ------
Utility Plant, at original cost:
Electric $ 52 $ 52
Less: Accumulated provision for
depreciation 47 45
------------ ------------
Total net utility plant 5 7
------------ ------------
Other Investments, at cost 41,221 11,137
------------ ------------
Current Assets:
Cash 1,798 5,913
Receivables from affiliated companies - 590
------------ ------------
1,798 6,503
------------ ------------
Deferred Charges:
Accumulated deferred income taxes 130 529
Deferred development costs 4,911 2,368
Other 740 837
------------ ------------
5,781 3,734
------------ ------------
Total Assets $ 48,805 $ 21,381
============ ============
CAPITALIZATION AND LIABILITIES
- ------------------------------
Capitalization:
Common stock $ - $ -
Capital surplus, paid in 63,913 31,211
Retained earnings (16,704) (12,489)
------------ ------------
Total capitalization 47,209 18,722
------------ ------------
Minority interest in common equity
of subsidiaries (65) 36
------------ ------------
Current Liabilities:
Accounts payable 1,226 1,091
Accounts payable to affiliated companies 336 567
Taxes accrued 58 869
Other 41 96
------------ ------------
1,661 2,623
------------ ------------
Total Capitalization and Liabilities $ 48,805 $ 21,381
============ ============
EXHIBIT B
CHARTER OAK ENERGY, INC. AND SUBSIDIARIES
-----------------------------------------
CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
---------------------------------------------
Three Months Ended
December 31,
---------------------------
1995 1994
------------ ------------
(Thousands of Dollars)
Operating Revenues $ - $ -
------------ ------------
Operating Expenses:
Operation and maintenance 2,344 3,411
Depreciation 159 178
Federal and state income taxes (284) (566)
Taxes other than income taxes 4 5
------------ ------------
Total operating expenses 2,223 3,028
------------ ------------
Operating Loss (2,223) (3,028)
------------ ------------
Other Income:
Investment income 203 395
Other, net 79 20
------------ ------------
Total other income 282 415
------------ ------------
Loss before interest charges (1,941) (2,613)
------------ ------------
Interest Charges - 2
------------ ------------
Net Loss $ (1,941) $ (2,615)
============ ============
Charter Oak Energy and Subsidiaries
Exhibit C
Detail of Intercompany Services
Fourth Quarter Ending December 31, 1995
Charter Oak Energy
------------------
NON-
Service Type of Services PAYROLL PAYROLL TOTAL
Provided By Provided
- ----------------------------------------------------------------------------
NUSCO Charter Oak staff 126,364 24,199 150,563
Accounting and 6,507 3,830 10,337
financial services
Legal services 2,058 1,853 3,911
Miscellaneous 2,832 463 3,295
----------------------------
Total NUSCO Services 137,761 30,345 168,106
----------------------------
COE
DEVELOPMENT
CORP Legal services 0 7,366 7,366
Miscellaneous 0 8,589 8,589
----------------------------
Total COE Dev. Services 0 15,955 15,955
----------------------------
Total Services Provided 137,761 46,300 184,061
============================
COE Development Corp.
---------------------
NON-
Service Type of Services PAYROLL PAYROLL TOTAL
Provided By Provided
- ----------------------------------------------------------------------------
NUSCO Charter Oak staff 264,055 243,115 507,170
Engineering services 69,697 32,921 102,618
Legal services 0 151,124 151,124
Miscellaneous 46,651 17,821 64,472
-----------------------------
Total NUSCO Services 380,403 444,981 825,384
-----------------------------
CL&P Miscellaneous 435 430 865
-----------------------------
Total CL&P Services 435 430 865
-----------------------------
PSNH Engineering services 5,481 3,381 8,862
Legal services 0 3,563 3,563
-----------------------------
Total PSNH Services 5,481 6,944 12,425
------------------------------
WMECO Engineering services 0 1,777 1,777
Legal services 4,216 2,121 6,337
------------------------------
Total WMECO Services 4,216 3,898 8,114
------------------------------
CHARTER OAK
ENERGY Legal services 0 28,888 28,888
------------------------------
Total COE Services 0 28,888 28,888
------------------------------
Total Services Provided 390,535 485,141 875,676
==============================
COE (UK) Corp.
--------------
Service Type of Services PAYROLL PAYROLL TOTAL
Provided By Provided
- ----------------------------------------------------------------------------
NUSCO Charter Oak staff 2,542 1,925 4,467
Accounting and
financial services 202 0 202
------------------------------
Total NUSCO Services 2,744 1,925 4,669
------------------------------
COE DEVELOPMENT
CORP Legal services 0 82 82
Miscellaneous 0 44 44
------------------------------
Total COE Dev. Services 0 126 126
------------------------------
Total Services Provided 2,744 2,051 4,795
==============================
COE Tejona Corp.
----------------
Service Type of Services PAYROLL PAYROLL TOTAL
Provided By Provided
- ----------------------------------------------------------------------------
NUSCO Accounting information
services 0 (366) (366)
==============================
