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 JUNE 30, 1997:
Attached as Exhibit A.
(2) TWELVE MONTH INCOME STATEMENT ENDING JUNE 30, 1997:
Attached as Exhibit B.
(3) GENERAL DESCRIPTION OF THE ACTIVITIES OF CHARTER OAK FOR THE QUARTER
ENDED JUNE 30, 1997, AND OF THE PROJECTS IN WHICH CHARTER OAK OR ITS
SUBSIDIARIES HAVE AN INTEREST:
During the second 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 June 30, 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
August 21, 1997
EXHIBIT A
CHARTER OAK ENERGY, INC. AND SUBSIDIARIES
-----------------------------------------
CONSOLIDATED BALANCE SHEETS (UNAUDITED)
---------------------------------------
June 30,
---------------------------
1997 1996
------------ ------------
(Thousands of Dollars)
ASSETS
- ------
Utility Plant, at original cost:
Electric $ 52 $ 52
Less: Accumulated provision for
depreciation 51 48
------------ ------------
Total net utility plant 1 4
------------ ------------
Other Investments, at cost 87,431 41,964
------------ ------------
Current Assets:
Cash 480 1,048
Accounts receivable 84 -
Taxes receivable 2,228 -
------------ ------------
2,792 1,048
------------ ------------
Deferred Charges:
Accumulated deferred income taxes 200 130
Deferred development costs 7,249 9,998
Other 457 695
------------ ------------
7,906 10,823
------------ ------------
Total Assets $ 98,103 $ 53,839
============ ============
CAPITALIZATION AND LIABILITIES
- ------------------------------
Capitalization:
Common stock $ - $ -
Capital surplus, paid in 115,991 70,063
Retained earnings (20,221) (17,464)
------------ ------------
Total capitalization 95,770 52,599
------------ ------------
Minority interest in common equity
of subsidiaries (83) (75)
------------ ------------
Current Liabilities:
Accounts payable 1,304 519
Accounts payable to affiliated companies 251 224
Taxes accrued 314 259
Other 314 259
------------ ------------
2,443 1,315
------------ ------------
Total Capitalization and Liabilities $ 98,130 $ 53,839
============ ============
EXHIBIT B
CHARTER OAK ENERGY, INC. AND SUBSIDIARIES
-----------------------------------------
CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
---------------------------------------------
Twelve Months Ended
June 30,
---------------------------
1997 1996
------------ ------------
(Thousands of Dollars)
Operating Revenues $ - $ -
------------ ------------
Operating Expenses:
Operation and maintenance 5,975 6,641
Depreciation 450 653
Federal and state income taxes (1,759) (1,723)
Taxes other than income taxes 40 18
------------ ------------
Total operating expenses 4,706 5,409
------------ ------------
Operating Loss (4,706) (5,409)
------------ ------------
Other Income:
Investment income 2,060 1,421
Other, net (89) 149
------------ ------------
Total other income 1,971 1,570
------------ ------------
Loss before interest charges (2,735) (3,839)
------------ ------------
Interest Charges 21 21
------------ ------------
Net Income (Loss) $ (2,756) $ (3,860)
============ ============
<PAGE>
Charter Oak Energy and Subsidiaries
Exhibit C
Detail of Intercompany Services
Twelve Months Ended June 30, 1997
Charter Oak Energy
------------------
NON-
Service Type of Services Provided PAYROLL PAYROLL TOTAL
Provided By
- -----------------------------------------------------------------------------
NUSCO Charter Oak staff 1,600,533 189,558 1,790,091
Accounting and
financial services 29,997 2,017 32,014
Legal services 3,057 5,364 8,421
Miscellaneous 25,192 7,540 32,732
------------------------------
Total NUSCO Services 1,658,779 204,479 1,863,258
------------------------------
NU PARENT Retainer Fee 0 200,000 200,000
------------------------------
Total NU PARENT Services 0 200,000 200,000
------------------------------
CL&P Miscellaneous 0 3,190 3,190
------------------------------
Total CL&P Services 0 3,190 3,190
------------------------------
CHARTER OAK
DEVELOPMENT
CORP Legal services 0 258,228 258,228
Miscellaneous 0 56,923 56,923
------------------------------
Total COD Services 0 315,151 315,151
------------------------------
Total Services Provided 1,658,779 722,820 2,381,599
==============================
Charter Oak Paris, Inc.
-----------------------
Service NON-
Provided By Type of Services Provided PAYROLL PAYROLL TOTAL
- -----------------------------------------------------------------------------
NUSCO Legal services 60 0 60
Miscellaneous 0 0 0
Accounting and
financial services 94 0 94
------------------------------
Total NUSCO Services 154 0 154
CL&P Allocated Refund of CCBT Audit 0 (7,628) (7,628)
-------------------------------
Total CL&P Services 0 (7,628) (7,628)
-------------------------------
Total Services Provided 154 (7,628) (7,474)
==============================
COE Development Corp.
---------------------
Service NON-
Provided By Type of Services Provided PAYROLL PAYROLL TOTAL
- -----------------------------------------------------------------------------
NUSCO Charter Oak staff 1,226,654 912,556 2,139,210
Engineering services 4,904 10 4,914
Legal services 0 39,522 39,522
Miscellaneous 13,146 254 13,400
------------------------------
Total NUSCO Services 1,244,704 952,342 2,197,046
------------------------------
CL&P Miscellaneous 1,511 861 2,372
------------------------------
Total CL&P Services 1,511 861 2,372
------------------------------
PSNH Engineering Services 0 414 414
Miscellaneous 0 318 318
------------------------------
Total PSNH Services 0 732 732
WMECO Engineering Services 0 271 271
------------------------------
Total WMECO Services 0 271 271
------------------------------
<PAGE>
CHARTER OAK
ENERGY Miscellaneous 0 (3,014) (3,014)
Legal Services 0 1,747 1,747
------------------------------
Total COE Services 0 (1,267) (1,267)
------------------------------
COE TEJONA
CORP Outside Services 0 13,000 13,000
------------------------------
Total COE Services 0 13,000 13,000
------------------------------
Total Services Provided 1,246,215 965,939 2,212,154
================================
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 103 75 178
--------------------------------
Total NUSCO services 12,134 8,833 20,967
--------------------------------
CHARTER OAK
ENERGY Outside Services 0 7,550 7,550
--------------------------------
Total COE Services 0 7,550 7,550
--------------------------------
CHARTER OAK
DEVELOPMENT
CORP Miscellaneous 0 4,509 4,509
--------------------------------
Total COD services 0 4,509 4,509
--------------------------------
Total Services Provided 12,134 20,892 33,026
=================================
COE Argentina I Corp.
----------------------
Service NON-
Provided By Type of Services Provided PAYROLL PAYROLL TOTAL
- -----------------------------------------------------------------------------
NUSCO Charter Oak Staff 0 150 150
Accounting Staff 71 0 71
-----------------------------
Total NUSCO services 71 150 221
------------------------------
Total Services Provided 71 150 221
==============================
COE (GENCOE) Corp.
----------------------
Service NON-
Provided By Type of Services Provided PAYROLL PAYROLL TOTAL
- -----------------------------------------------------------------------------
NUSCO Miscellaneous 141 75 216
-----------------------------
Total Services Provided 141 75 216
==============================
COE Argentina II Corp.
----------------------
Service NON-
Provided By Type of Services Provided PAYROLL PAYROLL TOTAL
- -----------------------------------------------------------------------------
NUSCO Miscellaneous 0 11,158 11,158
Charter Oak Staff 17,260 15,936 33,196
-----------------------------
Total NUSCO Services 17,260 27,094 44,354
COE Development Outside Services 0 42,245 42,245
Legal Services 0 771 771
------------------------------
Total COE Development Services 0 43,016 43,016
CHARTER OAK ENERGY Outside Services 0 1,032 1,032
------------------------------
Total COE Energy Services 0 1,032 1,032
------------------------------
Total Services Provided 17,260 71,142 88,402
==============================
COE Tejona Corp.
----------------
Service NON-
Provided By Type of Services Provided PAYROLL PAYROLL TOTAL
- -----------------------------------------------------------------------------
NUSCO Miscellaneous 4,345 (582) 3,763
Accounting Services 106 0 106
Charter Oak Staff 62,577 38,360 100,937
Legal Services 0 1,387 1,387
------------------------------
Total Services Provided 67,028 39,165 106,193
COE Development Charter Oak Staff 0 72,828 72,828
Legal Services 0 3,041 3,041
-------------------------------
Total COE Development Services 0 75,869 75,869
CHARTER OAK ENERGY Charter Oak Staff 0 1,925 1,925
--------------------------------
Total COE Energy Services 0 1,925 1,925
---------------------------------
Total Services Provided 67,028 116,959 183,987
=================================
COE AVE FENIX Corp.
-------------------
Service NON-
Provided By Type of Services Provided PAYROLL PAYROLL TOTAL
- -----------------------------------------------------------------------------
NUSCO Miscellaneous 26,125 6,152 32,277
------------------------------
Total NUSCO Services 26,125 6,152 32,277
COE Development Legal Services 0 120 120
-------------------------------
Total COE Development Services 0 120 120
-------------------------------
Total Services Provided 26,125 6,272 32,397
==============================
