<PAGE> 1
File No. 70-8329
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
Amendment No. 1
to
FORM U-1
APPLICATION-DECLARATION UNDER THE
PUBLIC UTILITY HOLDING COMPANY ACT OF 1935
By
CNG TRANSMISSION CORPORATION THE PEOPLES NATURAL GAS COMPANY
445 West Main Street CNG Tower
Clarksburg, West Virginia 26301 625 Liberty Avenue
Pittsburgh, Pennsylvania 15222-3197
THE EAST OHIO GAS COMPANY THE RIVER GAS COMPANY
1717 E. 9th Street 324 4th Street
Cleveland, Ohio 44114 Marietta, Ohio 45750
HOPE GAS INC.
Union National Center
P. O. Box 2868
Clarksburg, West Virginia 26302
Names and addresses of agents for service:
H. E. Brown, Vice President and W. P. Boswell, Vice President
General Counsel and General Counsel
CNG Transmission Corporationn The Peoples Natural Gas Company
445 West Main Street CNG Tower
Clarksburg, West Virginia 26301 625 Liberty Avenue
Pittsburgh, Pennsylvania 15222-3197
N. F. CHANDLER, General Attorney K. R. Long, Vice President and
Consolidated Natural Gas General Counsel
Service Co., Inc. The East Ohio Gas Company
CNG Tower The River Gas Company
625 Liberty Avenue 1717 E. Ninth Street 44114
Pittsburgh, Pennsylvania 15222-3199 Cleveland, Ohio 44114
M. A. Halbritter, Secretary and
General Counsel
Hope Gas, Inc.
Union National Center
P.O. Box 2868
Clarksburg, West Virginia 26302
<PAGE> 2
File Number 70-8329
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Amendment No. 1
to
FORM U-1
APPLICATION-DECLARATION UNDER THE PUBLIC UTILITY
HOLDING COMPANY ACT OF 1935
Item 1. Description of Proposed Transaction
___________________________________
(a) Furnish a reasonably detailed and precise description of the proposed
transaction, including a statement of the reasons why it is desired to
consummate the transaction and the anticipated effect thereof. If the
transaction is part of a general program, describe the program and its
relation to the proposed transaction.
I. PROPOSED TRANSACTION
Consolidated Natural Gas Company (the "Company" or "Consolidated") is
a public utility holding company registered as such under the Public
Utility Holding Company Act of 1935 (the "Act"). It is engaged solely in
the business of owning and holding all of the outstanding securities of
sixteen subsidiary companies which are principally engaged in natural gas
exploration, production, purchasing, gathering, transmission, storage,
distribution, and by-product operations.
CNG Transmission Corporation ("Transmission"), a wholly-owned
subsidiary of Consolidated, is an interstate pipeline, which is subject to
the jurisdiction of the Federal Energy Regulatory Commission ("FERC"). The
East Ohio Gas Company ("EOG"), Hope Gas, Inc. ("HGI"), The Peoples Natural
Gas Company ("PNG") and The River Gas Company ("River"), are local
distribution companies which are also wholly-owned subsidiaries of
Consolidated (collectively, referred to as the "LDC Affiliates").
<PAGE> 3
During 1992, FERC issued its Order No. 636 ("Order 636") which
required interstate gas pipeline companies, such as Transmission, to
effectively eliminate the pipelines' merchant role and require the
unbundling of the various services offered by the pipelines. On October 1,
1993, Transmission restructured its services in accordance with Order 636.
As part of the restructuring, FERC approved the recovery by Transmission
through its customers of the costs of making the transition pursuant to
Order 636 ("Transition Costs"). The Transition Costs are composed of the
unrecovered purchased gas and sales-related transportation costs which were
remaining on the date CNG implemented its Order 636 services. The initial
billing of these Transition Costs amounts to approximately $177.9 million.
However, Transmission expects to bill additional Transition Costs in the
future, due to prior period adjustments, annual LIFO storage accounting
adjustments, additional pipeline supplier charges or refunds, and other
activities relating to the implementation of Order 636.
By FERC Order, attached hereto as Exhibit B, Transmission was
authorized to recover the Transition Costs through a direct bill mechanism
to its customers, based on an allocation methodology agreed upon by
Transmission's customers. FERC also approved an alternative recovery
mechanism, which gives each affected customer an option of paying its share
of the Transition Costs by amortizing the principal over a 36-month period,
with interest payable on the outstanding balance. In order to elect the
monthly payment alternative, Transmission's FERC tariff allows Transmission
to require the customer to execute a promissory note substantially in the
form of Exhibit B-1.
<PAGE> 4
Transmission will be billing its customers, which includes the LDC
Affiliates, its allocated share of the initial direct bill of Transition
costs, which amounts to approximately $177 million (principal only). The
$99.2 million deference between the total initial transition costs of
$177.9 million and the $78.7 million to be billed to the LDC Affiliates
will be billed to non affiliates. Based upon Transmission's First Revised
FERC tariff Sheet No. 58, attached hereto as Exhibit B-2, the LDC
Affiliates' share of the initial direct bill is as follows:
EOG $52,900,000
HGI $ 4,600,000
PNG $20,600,000
River $ 600,000
Although the LDC Affiliates have the option to pay the principal
amount in its entirety within 10 days of billing, Transmission anticipates
that the LDC Affiliates will elect to make monthly payments. Accordingly,
Transmission proposes to extend its credit to the LDC Affiliates allowing
the LDC Affiliates to pay their principal amount of the Transition Costs
due to Transmission in 36-month consecutive monthly installments, together
with interest on the unpaid balance at the effective FERC interest rate (as
prescribed by the FERC under 18 C.F.R. 154.67(c)(2)(iii)(A)), which
currently is 6% per annum. If Transmission deems it appropriate, it may
require the LDC affiliate(s) to issue a promissory note to it.
The respective state commissions of the LDC Affiliates have
jurisdiction to examine the prudence of a LDC's activities with respect to
the recovery of interstate pipeline transition costs. If the LDC is deemed
to have acted imprudently, the commission could disallow the pass-through
of all or part of the transition costs to its rate payers and transporters.
<PAGE> 5
II. AUTHORIZATIONS REQUESTED
The following authorizations or determinations are hereby requested:
(1) For Transmission, from time to time through June 30, 1995, to
extend its credit to the LDC Affiliates up to an aggregate amount not to
exceed $120,000,000 arising from the LDC Affiliate's obligations to pay
Transition Costs, as described herein; and
(2) For Transmission, from time to time through June 30, 1995, to
acquire promissory notes from each of the LDC Affiliates up to an
aggregrate principal amount not to exceed $120 million to evidence the LDC
Affiliates' obligation to pay its share of the Transition Costs, as
described herein and for each of the LDC Affiliates to issue such
promissory note to Transmission.
(b) Describe briefly, and where practicable state the approximate amount
of any material interest in the proposed transaction, direct or indirect,
of any associate company or affiliate of the applicant or declarant or any
affiliate of any such associate company.
None, except as set forth in Item 1.(a) above.
(c) If the proposed transaction involves the acquisition of securities not
listed by a registered holding company or a subsidiary thereof, describe
briefly the business and property, present or proposed, of the issuer of
such securities.
None, except as set forth in Item 1.(a) above.
(d) If the proposed transaction involves the acquisition or disposition of
assets, describe briefly such assets setting forth original cost, vendor's
book cost (including the basis of determination) and applicable valuation
and qualifying reserves.
Inapplicable.
<PAGE> 6
Item 2. Fees, Commissions and Expenses
______________________________
(a) State (1) the fees, commissions and expenses paid or incurred, or to
be paid or incurred, directly or indirectly, in connection with the
proposed transaction by the applicant or declarant or any associate company
thereof, and (2) if the proposed transaction involves the sale of
securities at competitive bidding, the fees and expenses to be paid to
counsel selected by applicant or declarant to act for the successful
bidder.
It is estimated that the expenses to be incurred in connection with
the proposed transactions, other than those previously indicated, will not
exceed $6,000, consisting of $2,000 payable to Service Company for services
on a cost basis (including regularly employed counsel), a $2,000 fee for
filing this Application-Declaration, and miscellaneous out-of-pocket
expenses estimated at $2,000.
(b) If any person to whom fees or commissions have been or are to be paid
in connection with the proposed transaction is an associate company or an
affiliate of the applicant or declarant, or is an affiliate of an associate
company, set forth the facts with respect thereto.
If the charges of Service Company in connection with the preparation
of this Application-Declaration on Form U-1 and other related documents and
papers required to consummate the proposed transactions are considered to
be fees or commissions, such charges are described in Item 1(a) above.
Item 3. Applicable Statutory Provisions
_______________________________
(a) State the sections of the Act and the rules thereunder believed to be
applicable to the proposed transaction. If any section or rule would be
applicable in the absence of a specific exemption, state the basis of
exemption.
Sections 6(a) and 7 may be deemed to apply to the issuance of the
promissory notes by the LDC Affiliates to Transmission. Also, Section 9(a)
and 10 of the Act may apply to the acquisition by Transmission of the
promissory notes from the LDC Affiliates. Section 12(b) and Rule 45
promulgated thereunder are also deemed applicable to the proposed
<PAGE> 7
transaction set forth in this Application-Declaration. The issuance of
such notes is deemed exempt from the requirements of Rule 50 by virtue of
Paragraph(a)(3) thereof inasmuch as Transmission's acquisition of any
security in connection therewith shall have been approved under Section 10.
To the extent that the proposed transactions are considered by the
Commission to require authorization, approval or exemption under any
section of the Act or provision of the rules or regulations other than
those specifically referred to herein, request for such authorization,
approval or exemption is hereby made.
(b) If an applicant is not a registered holding company or a subsidiary
thereof, state the name of each public utility company of which it is an
affiliate, or of which it will become an affiliate as a result of the
proposed transaction, and the reasons why it is or will become such an
affiliate.
Inapplicable.
Item 4. Regulatory Approval
___________________
(a) State the nature and extent of the jurisdiction of any State
commission or any Federal commission (other than the Securities and
Exchange Commission) over the proposed transaction.
No Federal commission other than the Securities and Exchange
Commission has jurisdiction over any of the proposed transactions. In the
event EOG and/or River issues a promissory note to Transmission, the Public
Utility Commission of Ohio has jurisdiction over the transaction. Also,
the Public Service Commission of West Virginia has jurisdiction over the
issuance of a promissory note by Hope to Transmission. To the extent the
issuance of a note to Transmission by PNG is either considered a rate or a
rate-related term and condition which has been approved by FERC,
<PAGE> 8
the Pennsylvania Public Utility Commission ("PA PUC") does not have
jurisdiction over the transactions proposed herein; otherwise, the PA PUC
will have jurisdiction over the issuance of a promissory note by PNG to
Transmission.
(b) Describe the action taken or proposed to be taken before any
commission named in answer to paragraph (a) of this term in connection with
the proposed transaction.
Required applications as needed will be filed with the commissions
mentioned above.
Item 5. Procedure
_________
(a) State the date when Commission action is requested. If the date is
less than 40 days from the date of the original filing, set forth the
reasons for acceleration.
It is requested that Commission action with respect to the transaction
set forth in this Application-Declaration become effective on or before
March 1, 1994.
(b) State (i) whether there should be a recommended decision by a hearing
officer, (ii) whether there should be a recommended decision by any other
responsible officer of the Commission, (iii) whether the Office of Public
Utility Regulation of the Division of Investment Management may assist in
the preparation of the Commission's decision, and (iv) whether there should
be a 30-day waiting period between the issuance of the Commission's order
and the date on which it is to become effective.
It is submitted that a recommended decision by a hearing or other
responsible officer of the Commission is not needed with respect to the
proposed transactions. The Office of Public Utility Regulation of the
Division of Investment Management may assist in the preparation of the
Commission's decision. There should be no waiting period between the
issuance of the Commission's order and the date on which it is to become
effective.
<PAGE> 9
Item 6. Exhibits and Financial Statements
_________________________________
The following exhibits and financial statements are filed as a part of
this statement:
(a) Exhibits
________
B - FERC Order 65 FERC 61,273
B-1 - Form of Promissory Note
B-2 - First Revised Tariff Sheet No. 58
F - Opinions of Counsel.
(To be filed by amendment.)
O - Proposed notice pursuant to Rule 22(f).
(b) Financial Statements
____________________
Financial Statements are deemed unnecessary with respect to the
authorizations sought herein due to the simple nature of the proposed
transactions However, any financial information will be furnished which the
Commission shall request.
Item 7. Information as to Environmental Effects
_______________________________________
(a) Describe briefly the environmental affects of the proposed transaction
in terms of the standards set forth in Section 102(2)(c) of the National
Environmental Policy Act (42 U.S.C. 4332(2)(C)). If the response to this
item is a negative statement as to the applicability of Section 102(2)(C)
in connection with the proposed transaction, also briefly state the reasons
for that response.
As more fully described in Item 1(a), the proposed transactions
subject to the jurisdiction of this Commission relate to financing
proposals and involve no major federal action significantly affecting the
human environment.
<PAGE> 10
(b) State whether any other federal agency has prepared or is preparing an
environmental impact statement ("EIS") with respect to the proposed
transaction. If any other federal agency has prepared or is preparing an
EIS, state which agency or agencies and indicate the status of that EIS
preparation.
None.
SIGNATURES
__________
Pursuant to the requirements of the Public Utility Holding Company Act of
1935, the undersigned Company has duly caused this statement to be signed
on its behalf by the undersigned thereunto duly authorized.
CNG TRANSMISSION CORPORATION
By H. E. Brown
General Counsel
HOPE GAS, INC.
By M. A. Halbritter
General Counsel
THE PEOPLES NATURAL GAS COMPANY
By W. P. Boswell
General Counsel
THE EAST OHIO GAS COMPANY
THE RIVER GAS COMPANY
By K. R. Long
General Counsel
Dated: May 2, 1994
<PAGE> 1
EXHIBIT B
UNITED STATES OF AMERICA65 FERC 61,273
FEDERAL ENERGY REGULATORY COMMISSION
PIPELINE RATES: SUSPENSION
Before Commissioners: Elizabeth Anne Moler, Chair;
Vicky A. Bailey, James J. Hoecker,
William L. Massey, and Donald F. Santa, Jr.
CNG Transmission Corporation ) Docket No. RP94-31-000
ORDER ACCEPTING AND SUSPENDING TARIFF SHEET,
SUBJECT TO REFUND AND CONDITIONS, AND GRANTING WAIVER
(Issued November 29, 1993)
On October 29, 1993, CNG Transmission Corporation (CNG) filed
a tariff sheet l/ pursuant to section 4 of the Natural Gas Act
(NGA). This tariff sheet reflects a direct bill to CNG's former
sales customers of the balances in its Account No. 191 and its
sales-related portion of Account No. 186. CNG requests an
effective date of November 30, 1993, for its direct billing
proposal.
Background
Section 18.1 of CNG's tariff provides a mechanism for
recovery of CNG's unrecovered purchased gas costs pursuant to its
March 31, 1993 restructuring settlement, which was accepted by the
Commission in orders issued July 16, 1993, 2/ and September 17,
1993, 3/ in Docket No. RS92-14-0OO, et al. CNG's restructuring
pursuant to Order No. 636 4/
l/ First Revised Sheet No. 58 to FERC Gas Tariff, Second Revised
Volume No. 1.
2/ 64 FERC 61,082 (1993).
3/ 64 FERC 61,303 (1993).
4/ Pipeline Service Obligations and Revisions to Regulations
Governing Self-Implementing Transportation; and Regulation of
Natural Gas Pipelines After Partial Wellhead Decontrol,
57 Fed. Reg. 13,267 (April 16, 1992), III FERC Stats. & Regs.
Preambles 30,939 (April 8, 1992), order on reh'g, Order No.
636-A, 57 Fed. Reg. 36,128 (August 12, 1992), III FERC Stats.
& Regs. Preambles 30,950 (August 3, 1992); order on reh'g,
Order No. 636-B, 57 Fed. Reg. 57,911 (December
<PAGE> 2
Docket No. RP94-31-000 - 2 -
was implemented effective October 1, 1993.
Details of the Subject Filing
The subject limited NGA section 4 rate change filing proposes
to direct bill CNG's Account No. 191 unrecovered purchased gas
cost balance and the Account No. 186 unrecovered transportation
cost balance related to the sales portion of the Transportation
Cost Rate Adjustment (TCRA), to its former sales customers upon
implementation of its restructured tariff.
CNG's proposal will collect a total principal amount of
$177,889,950 from its former sales customers. 5/ CNG proposes to
allocate the direct bill amounts using each customer's firm sales
D-1 billing units as of March 3l, 1993, as adjusted by settlement.
6/
Under CNG's proposal, its former sales customers may elect to
pay their allocated amount to CNG through a lump sum payment
within 10 days of billing, or may elect to pay the amount with
interest over a 36-month amortization period. 7/ CNG's tariff
requires a report documenting the billing and recovery amounts at
least annually, and within 90 days of the final billings.
The subject proposal reflects activity recorded in Account
Nos. 191 and 186 over the 17-month period from May 1, 1992,
through September 30, 1993, as adjusted to reflect the transfer of
gas into customer storage inventory on October 1, 1993. CNG
states that it has removed the effect of exchange imbalances and
unpaid accruals from the overall Account No. 191 balance.
4/ ...continued)
8, 1992), 61 FERC 61,272 (1992), reh'g denied, 62
FERC 61,007 (January 8, 1993), appeal pending sub
nom. Atlanta Gas Light Co. and Chattanooga Gas Co. v.
FERC, No. 92-8782, et al. (11th Cir. Aug. 13, 1992).
5/ The amount is comprised of the following balances:
Account No. 191 Balance - Demand ($13,387,452)
Account No. 191 Balance - Commodity $182,260,994
Sales TCRA Account No. 186 - Demand ($6,240,510)
Sales TCRA Account No. 186 - Commodity $15,256,918
6/ See 64 FERC 61,082 at 61,758 (1993).
7/ Customers that elect the latter option must execute a
promissory note for the amount owed to CNG.
<PAGE> 3
Docket No. RP94-31-000 - 3 -
The balances of these accounts have also been reduced for
supplier refunds in accordance with Section 18.1.F of CNG's
General Terms and Conditions. Section 18.1.F provides that, to
the extent CNG must flow through supplier refunds, CNG shall
offset each customer's Account Nos. 191 and 186 transition costs,
provided that customers receiving service exclusively under Rate
Schedules GSS, GSS-II, FT, or IT shall receive their refunds
either in cash, or as a credit to their next regularly scheduled
bill for such service.
Section 18.1 also provides for an 18-month closeout period
for CNG to record activity relating to the periods prior to Order
No. 636 implementation, and to make future filings to recover or
return additional unamortized Account Nos. 191 and 186 amounts.
Public Notice, Interventions, and Protests
Public notice of the instant filing was issued on November 2,
1993, providing for protests, motions, or notices to intervene to
be filed on or before November 9, 1993. Timely notices or motions
to intervene were filed by certain of the parties listed in the
Appendix to this order. Pursuant to 18 C.F.R. 385.214 (1991),
any timely filed motion to intervene is granted unless an answer
in opposition is filed within 15 days of the date such motion is
filed. Any timely filed motions not listed in this order are also
granted in accordance with the conditions of Rule 214. The New
York State Electric & Gas Company and Corning Natural Gas
Corporation filed late motions to intervene. The Commission finds
that the acceptance of these interventions at this early stage of
the proceeding will not prejudice any party and therefore grants
the late motions to intervene. No protests were filed.
Discussion
The Commission finds that CNG's filing is consistent with
CNG's tariff. Accordingly, the Commission will accept CNG's
filing and suspend it, subject to refund and the conditions
discussed below, to be effective November 30, 1993. Consistent
with Commission policy, CNG must flow through refunds relating to
PGA costs to its customers, regardless of when it receives such
refunds. CNG is directed to file, within 15 days of the issuance
of this order, a revision to its tariff reflecting this policy.8/
CNG's filing did not provide an assessment of past
performance test as part of its filing. These working papers are
essential to a pipeline's annual PGA for determining the amount
8/ See Northern Natural Gas Co., 61 FERC 61,149 (1992).
<PAGE> 4
Docket No. RP94-31-000 - 4 -
of recoverable costs, and therefore the Commission finds that such
working papers are necessary in the instant case in order to fully
support the filing. Therefore, CNG is directed to file, within 15
days of the issuance of this order, an assessment test for the
period covered by the filing.
In addition, CNG states that it has removed the effects of
unpaid accruals from its Account No. 191, and has reflected the
removal of $137,546 of unpaid accruals from its commodity Account
No. 191 balance. However, CNG does not specifically state that
the amounts that it has removed constitute all of its unpaid
accruals. The Commission's policy requires that all unpaid
accruals, regardless of age, must be subtracted from the Account
No. 191 direct bill balances when a pipeline's PGA provisions are
terminated. 9/ Therefore, CNG is directed to file a statement,
within 15 days of the issuance of this order, confirming whether
the $137,546 of unpaid accruals removed from its commodity Account
No. 191 balance in the subject filing is the entire amount of
CNG's unpaid accruals. Further, if any of the unpaid accruals
which have been removed from the Account No. 191 are subsequently
paid within the 18-month PGA close-out period, CNG may then file a
proposal with the Commission to direct bill those amounts.
CNG has requested waiver of the Commission's regulations in
order to continue to calculate interest on its cost of gas
inventory using the North Penn methodology for interest
calculation. 10/ Section 154.305 (h) (3) (ii) (D) of the
Commission's regulations provides that the carrying charge base
for subaccounts of Account No. 191 will be the prior month's
subaccount balance, adjusted for the difference, if any, between
the rate used for storage gas, and the rate that would be used for
storage gas, if a rolling weighted average inventory costing
methodology had been used. 11/ The Commission has granted waiver
of this regulation to allow CNG to eliminate the "rolling weighted
average adjustment" from its computation of interest on its
Account No. 191 balance, in two previous annual PGA filings in
Docket Nos. TA91-l-22OOO 12/ and TA92-l-22-000. 13/ In those
proceedings, the Commission reasoned that the waiver was
9/ Panhandle Eastern Pipe Line Co., 64 FERC 61,334 (1993).
10/ North Penn Gas Co., 12 FERC 63,033 (1980), order on reh'g,
14 FERC 61,033 (1981).
11/ 18 CFR 154.305(h) (3) (ii) (D) (1993).
12/ 56 FERC 61,345 (1991).
13/ 60 FERC 61,227 (1992).
<PAGE> 5
Docket No. RP94-31-000 - 5 -
consistent with the Commission's decision, in CNG's general rate
case settlement in Docket No. RP88-211-000, et al., to allow CNG
to reflect the North Penn methodology in determining the storage
working capital allowance in its non-gas cost-of-service 14/ In
order to maintain consistency in the computation of the carrying
charges during the close-out period for the Account Nos. 191 and
186 costs, as compared to the period when these trackers were in
effect, the Commission will also grant the requested waiver in the
instant proceeding for good cause shown.
Suspension
Based upon a review of the filing, the Commission finds that
the proposed tariff sheet in footnote no. 1 has not been shown to
be just and reasonable, and may be unjust, unreasonable, unduly
discriminatory, or otherwise unlawful. Accordingly, the
Commission shall accept this tariff sheet for filing and suspend
its effectiveness for the period set forth below, subject to
refund and the conditions set forth in this order.
The Commission's policy regarding rate suspensions is that
rate filings generally should be suspended for the maximum period
permitted by statute where preliminary study leads the Commission
to believe that the filing may be unjust, unreasonable, or that it
may be inconsistent with other statutory standards. See Great
Lakes Gas Transmission Co., 12 FERC 61,293 (1980) (five-month
suspension). It is recognized, however, that shorter suspensions
may be warranted in circumstances where suspensions for the
maximum period may lead to harsh and inequitable results. See
Valley Gas Transmission Inc., 12 FERC 61,197 (1980) (one-day
suspension). This tariff sheet implements CNG's restructuring
settlement. Therefore, the Commission shall exercise its
discretion to suspend the rates to take effect on November 30,
1993, subject to refund and subject to the conditions set forth in
the body of this order and in the ordering paragraphs below.
The Commission orders:
(A) The tariff sheet listed in footnote no. 1 is accepted
and suspended, subject to refund and the conditions listed herein,
to be effective November 30, 1993.
(B) Within 15 days of the issuance of this order, CNG is
directed to file an assessment test, a statement of unpaid
14/ See 54 FERC 61,213 at 61,632 (1991) (granting waiver of
regulations for locked-in period of the settlement and
stating that CNG was permitted to apply for prospective
waivers in future PGA filings).
<PAGE> 6
Docket No. RP94-31-000 - 6 -
accruals, and a revision to its tariff reflecting the perpetual
refund obligation, as discussed in the body of this order.
(C) Acceptance of the subject filing is also subject to any
revisions necessary as a result of further Commission action in
CNG's restructuring proceedings in Docket
No. RS92-14-000, et al.
(D) Waiver of section 154.305(h) (3) (ii) (D) of the
Commission's regulation is also granted for good cause shown, as
discussed in the body of this order.
By the Commission.
(S E A L)
Lois D. Cashell,
Secretary.
<PAGE> 7
APPENDIX
INTERVENTIONS
Algonquin Gas Transmission Co.
Baltimore Gas and Electric Co.
Public Service Electric and Gas Co.
Pennsylvania Public Utility Commission
Long Island Lighting Co.
The Peoples Natural Gas Co.
New Jersey Natural Gas Co.
Process Gas Consumers Group
Washington Gas Light Co.
Northeast Energy Associates and North
Jersey Energy Associates (jointly)
Consolidated Edison Co. of New York, Inc.
Independent Oil & Gas Association of West Virginia
Progas U.S.A., Inc.
Public Service Commission of the State of New York
National Fuel Gas Supply Corp.
The City of Richmond, Virginia
Brooklyn Union Gas Co.
Texas Eastern Transmission Corp.
The Algonquin Customer Group
Virginia Natural Gas, Inc.
Producer-Marketer Transportation Group
Independent Oil & Gas Association of Pennsylvania
The East Ohio Gas Co., The River Gas Co., and Hope
Gas, Inc. (jointly)
Niagara Mohawk Power Corp.
New York State Electric & Gas Corp. *
South Jersey Gas Co.
Elizabethtown Gas Co.
Corning Natural Gas Corporation *
_______________
*Filed late
<PAGE> 1
EXHIBIT B-1
FORM OF
PROMISSORY NOTE
$___________________
(Subject to Adjustment)
For value received, the undersigned ________________________ (Maker)
at ___________________________________, promises to pay CNG TRANSMISSION
CORPORATION (CNG) at 445 West Main Street, Clarksburg, West Virginia 26301,
or at such other place within the United States of America which the holder
hereof may designate in writing to the undersigned, the sum of
$____________________, in installments as follows: thirty-six (36)
consecutive monthly installments in the amount of $______________ each,
except that the last installment shall be $__________, due and payable on
the tenth (10th) day following the date of billing for each monthly
installment, except when such day is a Saturday, Sunday, or bank holiday,
in which case payment is due the following business day, month, commencing
December 13, 1993, together with interest on the unpaid balance hereof from
December 13, 1993, at each month's effective Federal Energy Commission
interest rate (as prescribed by the FERC under 18 C.F.R.
154.67(c)(2)(iii)(A)) on the same dates installments of principal are due.
The principal amount and monthly installments of principal are subject to
upward and downward adjustments pursuant to CNG's applicable tariff
provisions now and hereafter in effect.
If there should be a default in the payment of interest or an
installment of principal due hereunder, or if Maker should make an
assignment for the benefit of its creditors, or attachment or garnishment
proceedings should be commenced, or a judgment be entered against Maker, or
a receiver be appointed over any property of Maker, or proceedings be
instituted by or against Maker under the Bankruptcy Code, as amended, the
holder hereof may, at its option, without notice or demand, declare this
note immediately due and payable.
Maker hereby waives presentment, demand, protest, notice of dishonor
and diligence in collecting, and agrees that, in the event a default occurs
and this note is placed in the hands of an attorney for collection, Maker
agrees to pay an additional amount equal to a reasonable attorney's fee.
Dated this _______ day of December, 1993.
______________________________________
Maker
Witness or Attest:
____________________________ By____________________________________
Title:______________________ Title:________________________________
<PAGE> 2
Memo: This note is issued pursuant to CNG Transmission Corporation FERC
Gas Tariff Second Revised Volume No. 1, General Terms and Conditions
Section 18.1 and First Revised Sheet No. 58 (now and hereafter in effect),
and FERC Docket No. RP94-31-000 relating to Account Nos. 191 and 186
Transition Costs.
<PAGE> 1
EXHIBIT B-2
CNG Transmission Corporation
FERC Gas Tariff First Revised Sheet No. 58
Second Revised Volume No. 1 Superseding
Substitute Original Sheet No. 58
CNG TRANSMISSION CORPORATION
Allocation of Unrecovered Purchased Gas
and Transportation Costs
Pursuant to Section 18.1
Line
No. Company Percentage
_____ _______________________________ __________
Column (1) (2)
1 Algonquin 1.8424%
2 Baltimore Gas & Electric 2.6582%
3 Brooklyn Union 4.2667%
4 Columbia of Ohio 0.0594%
5 Columbia of Pennsylvania 0.1267%
6 Consolidated Edison of NY 0.3000%
7 Corning 0.8216%
8 East Ohio Gas Co. 29.7373%
9 Elizabethtown 0.6839%
10 Fillmore Gas Co. 0.0792%
11 Hanley & Bird 0.1100%
12 Hope Gas, Inc. 2.7162%
13 Long Island Lighting 1.9154%
14 National Fuel Gas Supply 2.6667%
15 New Jersey Natural 1.1333%
16 New York State Electric & Gas 4.9817%
17 Niagara Mohawk Power Corp. 14.3281%
18 North Penn Gas Co. 0.1673%
19 Peoples Natural Gas Co. 11.6028%
20 Public Service Electric & Gas 2.0921%
21 River Gas Co. 0.3366%
22 Rochester Gas & Electric 15.0602%
23 South Jersey 0.0336%
24 Washington Gas Light 2.2622%
25 Woodhull Municipal Gas Co. 0.0183%
_________
26 100.00%
Issued by: Jon B. Slaby, Vice President
Issues on: OCTOBER 29, 1993 Effective: NOVEMBER 30, 1993
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EXHIBIT O
Proposed Notice
Pursuant to Rule 22(f)
SECURITIES AND EXCHANGE COMMISSION
(Release No. ; 70- )
CNG Transmission Corporation
NOTICE OF PROPOSED ISSUANCE AND ACQUISITION OF SECURITIES OF PROMISSORY
NOTE AND EXTENSION OF CREDIT
______________________, 1993
CNG Transmission Corporation ("Transmission"), 445 West Main Street,
Clarksburg, West Virginia 26301; The East Ohio Gas Company ("EOG"), 1717 E.
9th Street, Cleveland, Ohio 44114; Hope Gas, Inc. ("Hope"), Union National
Center, P. O. Box 2868, Clarksburg, West Virginia 26302; The Peoples
Natural Gas Company ("PNG"), CNG Tower, 625 Liberty Avenue, Pittsburgh,
Pennsylvania 15222-3197; and The River Gas Company ("River"), 324 4th
Street, Marietta, Ohio 45750, all wholly-owned subsidiaries of Consolidated
Natural Gas Company ("Consolidated"), CNG Tower, Pittsburgh, Pennsylvania
15222-3199, a registered holding company, have filed an
Application-Declaration with the Commission pursuant to Sections 6, 7,
9(a), 10, and 12(b) of the Public Utility Holding Company Act of 1935
("Act") and Rules 45 thereunder.
Transmission, an interstate pipeline, was required by the Federal
Energy Regulatory Commission ("FERC") pursuant to FERC Order 636 to
restructure its services which effectively eliminated Transmission's
merchant role and required it to unbundle the various services offered to
its customers. As part of this restructuring, FERC approved the recovery
by Transmission from its customers, including EOG, HGI, PNG and River, the
costs of making the transition to Order 636 ("Transition Costs"). The
initial billing of such Transition Costs amounts to approximately $177
<PAGE> 2
million; however, Transmission expects to bill additional Transition Costs
due to activities relating to the implementation of Order 636.
Transmission is proposing to extend its credit to EOG, Hope, PNG and
River (collectively referred to as "LDC Affiliates") where it will allow
each LDC Affiliate to pay its share of Transition Costs in 36-month
consecutive monthly installments, together with interest on the unpaid
balance at the effective FERC interest rate (as prescribed by the FERC
under 18 C.F.R. 154.67 (c)(2)(iii)(A)). If Transmission deems it
appropriate, it may require the LDC Affiliate(s) to issue a promissory note
to evidence the LDC Affiliate's obligation to pay to Transmission their
respective share of the Transition Costs.
