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. 1996:
Attached as Exhibit A.
(2) INCOME STATEMENT FOR THE QUARTER ENDED DECEMBER 31, 1996:
Attached as Exhibit B.
(3) GENERAL DESCRIPTION OF THE ACTIVITIES OF CHARTER OAK FOR THE QUARTER
ENDED DECEMBER 31, 1996, AND OF THE PROJECTS IN WHICH CHARTER OAK OR ITS
SUBSIDIARIES HAVE AN INTEREST:
During the fourth 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 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 currently under construction 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 October 30, 1996, the plant began
commercial operation.
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 DECEMBER
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 December 31, 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
January 31, 1997
EXHIBIT A
CHARTER OAK ENERGY, INC. AND SUBSIDIARIES
-----------------------------------------
CONSOLIDATED BALANCE SHEETS (UNAUDITED)
---------------------------------------
December 31,
---------------------------
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 57,188 41,221
------------ ------------
Current Assets:
Cash 2,843 1,798
Accounts receivable 84 -
Taxes receivable 1,522 -
------------ ------------
4,449 1,798
------------ ------------
Deferred Charges:
Accumulated deferred income taxes 130 130
Deferred development costs 9,348 4,911
Other 595 740
------------ ------------
10,073 5,781
------------ ------------
Total Assets $ 71,713 $ 48,805
============ ============
CAPITALIZATION AND LIABILITIES
- ------------------------------
Capitalization:
Common stock $ - $ -
Capital surplus, paid in 87,651 63,913
Retained earnings (18,126) (16,704)
------------ ------------
Total capitalization 69,525 47,209
------------ ------------
Minority interest in common equity
of subsidiaries (28) (65)
------------ ------------
Current Liabilities:
Accounts payable 459 1,226
Accounts payable to affiliated companies 235 336
Taxes accrued 1,229 58
Other 293 41
------------ ------------
2,216 1,661
------------ ------------
Total Capitalization and Liabilities $ 71,713 $ 48,805
============ ============
EXHIBIT B
CHARTER OAK ENERGY, INC. AND SUBSIDIARIES
-----------------------------------------
CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
---------------------------------------------
For the Years Ended
December 31,
---------------------------
1996 1995
------------ ------------
(Thousands of Dollars)
Operating Revenues $ - $ -
------------ ------------
Operating Expenses:
Operation and maintenance 4,511 7,298
Depreciation 435 655
Federal and state income taxes (1,108) (2,503)
Taxes other than income taxes 21 20
------------ ------------
Total operating expenses 3,859 5,470
------------ ------------
Operating Loss (3,859) (5,470)
------------ ------------
Other Income:
Investment income 2,488 1,120
Other, net (36) 154
------------ ------------
Total other income 2,452 1,274
------------ ------------
Loss before interest charges (1,407) (4,196)
------------ ------------
Interest Charges 15 19
------------ ------------
Net Loss (Loss) $ (1,422) $ (4,215)
============ ============
Charter Oak Energy and Subsidiaries Exhibit C
Detail of Intercompany Services
For the Year Ended December 31, 1996
Charter Oak Energy
------------------
NON-
Service Type of Services PAYROLL PAYROLL TOTAL
Provided By Provided
- -----------------------------------------------------------------------------
NUSCO Charter Oak staff 558,254 148,987 707,241
Accounting and financial services 28,076 22,783 50,859
Legal services 2,777 4,771 7,548
Miscellaneous 16,044 18,397 34,441
---------------------------
Total NUSCO Services 605,151 194,938 800,089
---------------------------
NNECO Miscellaneous 0 125 125
---------------------------
Total NNECO Services 0 125 125
---------------------------
CL&P Miscellaneous 0 754 754
Outside Services 0 246 246
---------------------------
Total CL&P Services 0 1,000 1,000
---------------------------
CHARTER OAK
DEVELOPMENT CORP
Legal services 0 51,829 51,829
Miscellaneous 0 24,081 24,081
---------------------------
Total COD Services 0 75,910 75,910
---------------------------
Total Services Provided 605,151 271,973 877,124
===========================
Charter Oak Paris, Inc.
-----------------------
NON-
Service Type of Services PAYROLL PAYROLL TOTAL
Provided By Provided
- -----------------------------------------------------------------------------
NUSCO Legal services 60 0 60
Accounting and financial services 94 0 94
---------------------------
Total Services Provided 154 0 154
===========================
COE Development Corp.
---------------------
NON-
Service Type of Services PAYROLL PAYROLL TOTAL
Provided By Provided
- -----------------------------------------------------------------------------
NUSCO Charter Oak staff 1,444,989 1,014,082 2,459,071
Engineering services 21,482 7,136 28,618
Legal services 0 245,676 245,676
Miscellaneous 14,625 31,320 45,945
-------------------------
Total NUSCO Services 1,481,096 1,298,214 2,779,310
-------------------------
CL&P Miscellaneous 9,963 3,761 13,724
-------------------------
Total CL&P Services 9,963 3,761 13,724
-------------------------
PSNH Engineeering Services 0 7,723 7,723
Legal Services 0 5,677 5,677
Miscellaneous 10,458 1,492 11,950
-------------------------
Total PSNH Services 10,458 14,892 25,350
-------------------------
WMECO Engineeering Services 0 271 271
Legal Services 79 40 119
-------------------------
Total WMECO Services 79 311 390
CHARTER OAK Miscellaneous 0 (3,024) (3,024)
ENERGY -------------------------
Total COE Services 0 (3,024) (3,024)
-------------------------
Total Services Provided 1,501,596 1,314,154 2,815,750
=========================
COE (UK) Corp.
--------------
NON-
Service Type of Services PAYROLL PAYROLL TOTAL
Provided By Provided
- -----------------------------------------------------------------------------
Charter Oak staff 11,038 7,495 18,533
NUSCO Accounting and financial services 336 75 441
-------------------------
Total NUSCO Services 11,404 7,570 18,974
-------------------------
CHARTER OAK
ENERGY Outside Services 0 7,604 7,604
-------------------------
Total COE Services 0 7,604 7,604
-------------------------
CHARTER OAK
DEVELOPMENT CORP Legal services 0 278 278
Miscellaneous 0 7,883 7,883
-------------------------
Total Charter Oak
Development Services 0 8,161 8,161
-------------------------
Total Services Provided 11,404 23,335 34,739
=========================
COE Argentina I Corporation
----------------------------------
NON-
Service Type of Services PAYROLL PAYROLL TOTAL
Provided By Provided
- -----------------------------------------------------------------------------
NUSCO Charter Oak Staff 0 75 75
--------------------------
Total NUSCO Services 0 75 75
--------------------------
Total Services Provided 0 75 75
==========================
COE (GENCOE)Corp.
-----------------
NON-
Service Type of Services PAYROLL PAYROLL TOTAL
Provided By Provided
- -----------------------------------------------------------------------------
NUSCO Miscellaneous
0 75 75
--------------------------
Total Services Provided 0 75 75
==========================
COE Argentina II Corp.
----------------------
NON-
Service Type of Services PAYROLL PAYROLL TOTAL
Provided By Provided
- -----------------------------------------------------------------------------
NUSCO Miscellaneous 0 75 75
Charter Oak Staff 7,850 35,106 42,956
-------------------------
Total NUSCO Services 7,850 35,181 43,031
=========================
COE Development Outside Services 0 28,226 28,226
Legal Services 0 799 799
-------------------------
0 29,025 29,025
Total Services Provided 7,850 64,206 72,056
==========================
COE Tejona Corp.
----------------
NON-
Service Type of Services PAYROLL PAYROLL TOTAL
Provided By Provided
- -----------------------------------------------------------------------------
NUSCO Miscellaneous 657 (582) 75
--------------------------
Total Services Provided 657 (582) 75
==========================
COE AVE FENIX Corp.
-------------------
NON-
Service Type of Services PAYROLL PAYROLL TOTAL
Provided By Provided
- -----------------------------------------------------------------------------
NUSCO Miscellaneous
0 75 75
--------------------------
Total Services Provided 0 75 75
==========================
