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, HCAR, No. 26623, December 12,
1996, File No. 70-8507).
(1) BALANCE SHEET AS OF MARCH 31, 1997:
Attached as Exhibit A.
(2) TWELVE MONTH INCOME STATEMENT ENDING MARCH 31, 1997:
Attached as Exhibit B.
(3) GENERAL DESCRIPTION OF THE ACTIVITIES OF CHARTER OAK FOR THE QUARTER
ENDED MARCH 31, 1997, AND OF THE PROJECTS IN WHICH CHARTER OAK OR ITS
SUBSIDIARIES HAVE AN INTEREST:
During the first quarter of 1997, pursuant to the permission granted by
the Commission in the September 30, 1994 (HCAR. No. 26134), December 30, 1994
(HCAR. No. 26213), August 7, 1995 (HCAR. No. 26354) and December 12, 1996
(HCAR. No. 26623) 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 12, 1996, this authority
was extended to December 31, 1997 with the authorized amount of investment
reduced to $200 million. The Commission reserved jurisdiction over
increasing the amount of authorized investment by $200 million and extending
the authority to December 31, 1998.
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 in the Republic of Argentina.
Charter Oak through its wholly-owned subsidiary COE Ave Fenix Corporation,
will own approximately 83% of the issued and outstanding common stock of Ave
Fenix. On January 27, 1997, Ave Fenix closed on a $44 million term loan.
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 223 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, 1997.
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, 1997 is
approximately $20 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
May 30, 1997
EXHIBIT A
CHARTER OAK ENERGY, INC. AND SUBSIDIARIES
-----------------------------------------
CONSOLIDATED BALANCE SHEETS (UNAUDITED)
---------------------------------------
March 31,
---------------------------
1997 1996
------------ ------------
(Thousands of Dollars)
ASSETS
- ------
Utility Plant, at original cost:
Electric $ 52 $ 52
Less: Accumulated provision for
depreciation 50 48
------------ ------------
Total net utility plant 2 4
------------ ------------
Other Investments, at cost 87,286 41,547
------------ ------------
Current Assets:
Cash 1,738 1,013
Accounts receivable 84 2
Accounts receivable from
affiliated companies 9 -
Taxes receivable 1,843 -
------------ ------------
3,674 1,015
------------ ------------
Deferred Charges:
Accumulated deferred income taxes 130 130
Deferred development costs 6,611 6,554
Other 496 699
------------ ------------
7,237 7,383
------------ ------------
Total Assets $ 98,199 $ 49,949
============ ============
CAPITALIZATION AND LIABILITIES
- ------------------------------
Capitalization:
Common stock $ - $ -
Capital surplus, paid in 115,142 65,937
Retained earnings (19,071) (17,071)
------------ ------------
Total capitalization 96,071 48,866
------------ ------------
Minority interest in common equity
of subsidiaries (56) (69)
------------ ------------
Current Liabilities:
Accounts payable 474 536
Accounts payable to affiliated companies 750 432
Taxes accrued 663 24
Other 297 160
------------ ------------
2,184 1,152
------------ ------------
Total Capitalization and Liabilities $ 98,199 $ 49,949
============ ============
EXHIBIT B
CHARTER OAK ENERGY, INC. AND SUBSIDIARIES
-----------------------------------------
CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
---------------------------------------------
Twelve Months Ended
March 31,
---------------------------
1997 1996
------------ ------------
(Thousands of Dollars)
Operating Revenues $ - $ -
------------ ------------
Operating Expenses:
Operation and maintenance 5,011 7,182
Depreciation 443 654
Federal and state income taxes (1,568) (2,112)
Taxes other than income taxes 26 18
------------ ------------
Total operating expenses 3,912 5,742
------------ ------------
Operating Loss (3,912) (5,742)
------------ ------------
Other Income:
Investment income 2,002 1,394
Other, net (75) 156
------------ ------------
Total other income 1,927 1,550
------------ ------------
Loss before interest charges (1,985) (4,192)
------------ ------------
Interest Charges 15 20
------------ ------------
Net Income (Loss) $ (2,000) $ (4,212)
============ ============
<PAGE>
Charter Oak Energy and Subsidiaries
Exhibit C
Detail of Intercompany Services
Twelve Months Ended March 31, 1997
Charter Oak Energy
------------------
NON-
Service Type of Services Provided PAYROLL PAYROLL TOTAL
Provided By
- -----------------------------------------------------------------------------
NUSCO Charter Oak staff 1,033,619 159,793 1,193,412
Accounting and
financial services 29,466 2,770 32,236
Legal services 2,789 3,621 6,410
Miscellaneous 19,953 13,810 33,763
------------------------------
Total NUSCO Services 1,085,827 179,994 1,265,821
------------------------------
NNECO Miscellaneous 0 125 125
------------------------------
Total NNECO Services 0 125 125
CL&P Miscellaneous 0 3,895 3,895
------------------------------
Total CL&P Services 0 3,895 3,895
------------------------------
CHARTER OAK
DEVELOPMENT
CORP Legal services 0 71,345 71,345
Miscellaneous 0 52,867 52,867
------------------------------
Total COD Services 0 124,212 124,212
------------------------------
Total Services Provided 1,085,827 308,226 1,394,053
==============================
Charter Oak Paris, Inc.
-----------------------
Service NON-
Provided By Type of Services Provided PAYROLL PAYROLL TOTAL
- -----------------------------------------------------------------------------
NUSCO Legal services 60 0 60
Accounting and
financial services 94 0 94
------------------------------
Total Services Provided 154 0 154
==============================
COE Development Corp.
---------------------
Service NON-
Provided By Type of Services Provided PAYROLL PAYROLL TOTAL
- -----------------------------------------------------------------------------
NUSCO Charter Oak staff 1,429,615 1,010,622 2,440,237
Engineering services 14,784 124 14,908
Legal services 0 143,111 143,111
Miscellaneous 14,662 451 15,113
------------------------------
Total NUSCO Services 1,459,061 1,154,308 2,613,369
------------------------------
CL&P Miscellaneous 5,474 1,172 6,646
------------------------------
Total CL&P Services 5,474 1,172 6,646
------------------------------
PSNH Engineering Services 0 414 414
Miscellaneous 1,774 1,492 3,266
------------------------------
Total PSNH Services 1,774 1,906 3,680
WMECO Engineering Services 0 271 271
------------------------------
Total WMECO Services 0 271 271
------------------------------
CHARTER OAK
ENERGY Miscellaneous 0 (2,523) (2,523)
Legal Services 0 1,747 1,747
------------------------------
Total COE Services 0 (776) (776)
------------------------------
COE TEJONA
CORP Outside Services 0 13,000 13,000
------------------------------
Total COE Services 0 13,000 13,000
------------------------------
Total Services Provided 1,466,309 1,169,881 2,636,190
================================
COE (UK) Corp.
--------------
Service NON-
Provided By Type of Services Provided PAYROLL PAYROLL TOTAL
- -----------------------------------------------------------------------------
NUSCO Charter Oak staff 12,031 8,758 20,789
Accounting and
Financial Services 366 75 441
--------------------------------
Total NUSCO services 12,397 8,833 21,230
--------------------------------
CHARTER OAK
ENERGY Outside Services 0 7,577 7,577
--------------------------------
Total COE Services 0 7,577 7,577
--------------------------------
CHARTER OAK Legal Services 0 193 193
DEVELOPMENT
CORP Miscellaneous 0 4,509 4,509
--------------------------------
Total COD services 0 4,702 4,702
--------------------------------
Total Services Provided 12,397 21,112 33,509
=================================
COE Argentina I Corp.
----------------------
Service NON-
Provided By Type of Services Provided PAYROLL PAYROLL TOTAL
- -----------------------------------------------------------------------------
NUSCO Charter Oak Staff 0 150 150
-----------------------------
Total NUSCO services 0 150 150
------------------------------
Total Services Provided 0 150 150
==============================
COE (GENCOE) Corp.
----------------------
Service NON-
Provided By Type of Services Provided PAYROLL PAYROLL TOTAL
- -----------------------------------------------------------------------------
NUSCO Miscellaneous 0 75 75
-----------------------------
Total Services Provided 0 75 75
==============================
COE Argentina II Corp.
----------------------
Service NON-
Provided By Type of Services Provided PAYROLL PAYROLL TOTAL
- -----------------------------------------------------------------------------
NUSCO Miscellaneous 0 75 75
Charter Oak Staff 8,415 18,798 27,213
-----------------------------
Total NUSCO Services 8,415 18,873 27,288
COE Development Outside Services 0 27,390 27,390
Legal Services 0 1,570 1,570
------------------------------
Total COE Development Services 0 28,960 28,960
CHARTER OAK ENERGY Outside Services 0 1,032 1,032
Legal Services 0 0 0
------------------------------
Total COE Energy Services 0 1,032 1,032
------------------------------
Total Services Provided 8,415 48,865 57,280
==============================
COE Tejona Corp.
----------------
Service NON-
Provided By Type of Services Provided PAYROLL PAYROLL TOTAL
- -----------------------------------------------------------------------------
NUSCO Miscellaneous 4,874 (582) 4,292
Accounting Services 0 0 0
Charter Oak Staff 30,947 25,966 56,913
Legal Services 0 1,334 1, 334
------------------------------
Total Services Provided 35,821 26,718 62,539
COE Development Charter Oak Staff 0 47,796 47,796
Legal Services 0 0 0
-------------------------------
Total COE Development Services 0 47,796 47,796
CHARTER OAK ENERGY Charter Oak Staff 0 911 911
--------------------------------
Total COE Energy Services 0 911 911
---------------------------------
Total Services Provided 35,821 75,425 111,246
=================================
COE AVE FENIX Corp.
-------------------
Service NON-
Provided By Type of Services Provided PAYROLL PAYROLL TOTAL
- -----------------------------------------------------------------------------
NUSCO Miscellaneous 9,756 75 9,831
------------------------------
Total Services Provided 9,756 75 9,831
==============================
