File No. 70-8885
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
AMENDMENT NO. 3 TO
FORM U-1 APPLICATION-DECLARATION
UNDER THE
PUBLIC UTILITY HOLDING COMPANY ACT OF 1935
CENTRAL AND SOUTH WEST CORPORATION
1616 Woodall Rodgers Freeway
P.O. Box 660164
Dallas, Texas 75202
CSW ENERGY, INC.
1616 Woodall Rodgers Freeway
P.O. Box 660789
Dallas, Texas 75202
CSW INTERNATIONAL, INC.
1616 Woodall Rodgers Freeway
P.O. Box 660789
Dallas, Texas 75202
(Names of companies filing this statement and
addresses of principal executive offices)
CENTRAL AND SOUTH WEST CORPORATION
(Name of top registered holding company parent)
Wendy G. Hargus
Treasurer
Central and South West Corporation
1616 Woodall Rodgers Freeway
P.O. Box 660164
Dallas, Texas 75202
Terry D. Dennis
President
CSW Energy, Inc.
1616 Woodall Rodgers Freeway
P.O. Box 660789
Dallas, Texas 75202
Terry D. Dennis
President
CSW International, Inc.
1616 Woodall Rodgers Freeway
P.O. Box 660789
Dallas, Texas 75202
Joris M. Hogan
Milbank, Tweed, Hadley & McCloy
One Chase Manhattan Plaza
New York, New York 10005-1413
(Names and addresses of agents for service)
Respectfully request that copies be sent to:
Edwin F. Feo
Milbank, Tweed, Hadley & McCloy
601 South Figueroa Street
30th Floor
Los Angeles, California 90017
Central and South West Corporation, a Delaware corporation
("CSW") and a registered holding company under the Public Utility
Holding Company Act of 1935, as amended (the "Act"), CSW Energy,
Inc., a Texas corporation and wholly-owned nonutility subsidiary of
CSW ("Energy"), and CSW International, Inc., a Delaware corporation
and wholly-owned nonutility subsidiary of CSW ("CSWI"), hereby file
this Amendment No. 3 (this "Amendment") to the Form U-1
Application-Declaration (the "Application-Declaration") in this
File No. 70-8885 for the purposes of amending the Application-
Declaration as set forth below and, as so amended, restating the
Application-Declaration in its entirety. In all other respects, the
Application-Declaration as previously filed will remain the same.
1. Item 3 ("Applicable Statutory Provisions") is amended to
add the following paragraph immediately at the end thereof:
"Rule 54 under the Act is satisfied because Rules
53(a), (b) and (c) are satisfied. As of August 15, 1996, CSW
has invested approximately $850 million in the aggregate in
Exempt Projects, or approximately 45% of $1,883 million, the
average of CSW's consolidated retained earnings for the four
consecutive quarters ended June 30, 1996, thus satisfying Rule
53(a)(1). CSW maintains in conformity with United States
generally accepted accounting principles and makes available
the books and records and financial statements required by
Rule 53(a)(2). No more than 2% of the employees of CSW's
operating subsidiaries presently render services to an Exempt
Project in which CSW owns an interest, satisfying Rule
53(a)(3). CSW submitted those documents required by Rule
53(a)(4) to be submitted. None of the conditions described in
Rule 53(b) exist with respect to CSW or any of its
subsidiaries, thereby satisfying such rule and making Rule
53(c) inapplicable."
In summary, under the Application-Declaration as so
amended, CSW, Energy and CSWI seek an order of the Commission under
Sections 6(a), 7 and 12(b) of the Act, and Rule 45 thereunder,
authorizing CSWI from time to time to guarantee up to $500 million
aggregate principal amount (the "Aggregate Principal Amount") of
debt securities (the "Securities") to be issued from time to time
on or before the fifth anniversary of the date on which the
Commission issues an order making effective this Application-
Declaration, by Energy to third parties in reliance on exemptions
to the restrictions of Section 6(a) of the Act available under Rule
52(b) under the Act and on exemptions to the registration of the
Securities under the Securities Act of 1933, as amended (the "1933
Act"), including such exemptions available under Rule 144A
thereunder, which third parties will have no recourse under the
Securities to CSW or any of its domestic public utility
subsidiaries (the "Operating Companies"). In addition to such
items set forth above, the transactions, to which the Applicants
will rely on the authority of the Commission under orders issued,
or rules adopted, previously by the Commission under the Act,
underlying such guarantee include the following: (i) pursuant to
exemptions to the restrictions of Section 6(a) of the Act available
under Rule 52(b) promulgated under the Act, the issuance from time
to time by Energy of Securities to third parties in reliance on
exemptions to the registration of such securities under the 1933
Act, including such exemptions available under Rule 144A
thereunder, which third parties will have no recourse under the
Securities to CSW or any of the Operating Companies; (ii) pursuant
to exemptions to the restrictions of Section 6(a) of the Act
available under Rule 52(b) promulgated under the Act, a loan of the
proceeds of the Securities by Energy to CSWI; (iii) pursuant to
Sections 32 and 33 of the Act and orders of the Commission as
described below, the use of the proceeds of the Securities by
Energy to finance Energy's investments in and activities with
respect to exempt wholesale generators, as defined in Section 32(a)
of the Act ("EWGs"), and by CSWI to finance CSWI's investments in
and activities with respect to EWGs and foreign utility companies,
as defined in Section 33(a) of the Act ("FUCOs" and, collectively
with EWGs, "Exempt Projects"); (iv) pursuant to orders of the
Commission as described below, the performance by CSW and Energy
under a letter agreement (the "Advances Letter"), attached to the
Application-Declaration as Confidential Exhibit 1, that reflects
the current authorization of CSW to make intercompany loans,
capital contributions and open account advances (the "CSWE
Advances") to Energy; and (v) pursuant to exemptions to Sections
6(a) and 12(b) of the Act and Rule 45(a) thereunder available under
Rules 45(b) and 52(b) promulgated under the Act, an undertaking by
CSW pursuant to the Advances Letter to continue such CSWE Advances
through the date upon which the Securities mature. The proceeds of
the Securities, which are nonrecourse to CSW, and of any CSWE
Advances or any intercompany loans, capital contributions and open
account advances that CSW is currently authorized to make to CSWI
(the "CSWI Advances" and, collectively with the CSWE Advances, the
"Advances"), which will not be used to pay any obligations of
Energy or CSWI with respect to the Securities, will not be included
in any calculation of CSW's "aggregate investment" in Exempt
Projects as defined in Rule 53(a) under the Act (even if such
proceeds from the Securities are invested by Energy in EWGs or by
CSWI in Exempt Projects), unless, in accordance with Rule 53 or
other applicable rules or orders of the Commission under the Act,
Energy or CSWI uses such Advances to acquire the securities of or
otherwise invest in any Exempt Project.
As so amended, the Application-Declaration is hereby
restated in its entirety as follows:
Item 1. Description of Proposed Transactions.
(1) History and Nature of Request. CSW is a registered
holding company under the Act. Since 1990, CSW, directly or
through its wholly-owned subsidiary, Energy, has engaged in
development activities to conduct preliminary studies of, to
investigate, to research, to develop, to consult with respect to,
and to agree to construct (such construction subject to further
Commission authorization), "qualifying facilities" ("QFs") as
defined under the Public Utility Regulatory Policies Act of 1978,
as amended, and independent power facilities, including EWGs.
Since 1994, CSW, directly or through its wholly-owned subsidiary,
CSWI, has engaged in development and investment activities with
respect to Exempt Projects and is authorized to provide design,
construction, engineering, operation, maintenance, management,
administration, employment, tax, accounting, economic, financial,
fuel, environmental, communications, energy conservation, demand
side management, overhead efficiency, utility performance and
electronic data processing services and software development and
support services in connection therewith to Exempt Projects and
(except for operation) to foreign electric utility enterprises that
are not Exempt Projects.
CSW is presently authorized under the terms of orders and
supplemental orders issued under File Nos. 70-7758, 70-8205 and 70-
8423 (collectively, the "Financing Orders") to finance the
operations of CSW, Energy, CSWI and their respective subsidiaries
by issuing and selling debt and equity securities and by issuing
guarantees of the securities of certain subsidiaries. CSW's
authorization under the Financing Orders may be summarized as
follows:
(a) File No. 70-7758. Pursuant to an order of the
Commission dated September 28, 1990 (HCAR No. 25162) and
supplemental orders dated November 22, 1991 (HCAR No. 25414),
December 31, 1992 (HCAR No. 25728) and November 28, 1995 (HCAR No.
26417) with respect to File No. 70-7758 (collectively, the "CSWE
Order"), CSW and Energy obtained authorization, among other things,
to (i) spend up to $250 million to conduct preliminary studies of,
to investigate, to research, to develop, to consult with respect
to, and to agree to construct (such construction subject to further
Commission authorization), QFs and independent power facilities,
including EWGs; and (ii) finance such activities through capital
contributions, open account advances and loans in an aggregate
amount not to exceed $250 million. Such authorization expires on
December 31, 2000.
(b) File No. 70-8205. Pursuant to an order of the
Commission dated August 6, 1993 (HCAR No. 25866) and a supplemental
order dated November 28, 1995 (HCAR No. 26416) with respect to File
No. 70-8205, CSW and Energy obtained authorization, among other
things, from time to time to issue letters of credit, bid bonds or
guarantees (collectively, the "CSWE Guarantees") in connection with
the development of QFs and independent power facilities, including
EWGs, in an aggregate amount not to exceed $75 million. Such
authorization expires on December 31, 2000.
(c) File No. 70-8423. CSW and Energy received authority
of the Commission by order dated November 3, 1994 (HCAR No. 26156)
and a supplemental order dated September 27, 1995 (HCAR No. 26383)
with respect to File No. 70-8423 (collectively, the "CSWI Order"),
among other things, (i) to organize CSWI and certain other
subsidiaries meeting certain specifications set forth in the
application-declaration in File No. 70-8423 (the "Project Parents")
to invest in Exempt Projects in an amount up to 50% of CSW's
"consolidated retained earnings" as determined in accordance with
Rule 53(a)(1)(ii) under the Act for such investments for which
there is recourse to CSW and up to $3 billion for such investments
for which there is not recourse to CSW, (ii) to fund such
investments from time to time through issuances by CSW, CSWI and/or
Project Parents of stock, partnership interests, promissory notes,
commercial paper or other debt or equity securities and (iii) for
CSW to provide guarantees of, and to arrange for letters of credit,
bid bonds or similar credit support arrangements (collectively, the
"CSWI Guarantees") concerning CSWI's or Project Parents' activities
permitted under such order and supplemental order. In addition,
the order and supplemental order in such file authorize CSW,
directly or through CSWI or their respective subsidiaries, to
provide design, construction, engineering, operation, maintenance,
management, administration, employment, tax, accounting, economic,
financial, fuel, environmental, communications, energy
conservation, demand side management, overhead efficiency, utility
performance and electronic data processing services and software
development and support services in connection therewith to Exempt
Projects and (except for operation) to foreign electric utility
enterprises that are not Exempt Projects. Such authorization
expires on December 31, 1997.
Under the terms of the Financing Orders, CSW may use the
proceeds of common stock sales and borrowings, among other things,
to finance the acquisition of the securities of or other interest
in one or more Exempt Projects, and may issue CSWE Guarantees or
CSWI Guarantees in respect of the securities of such Exempt
Projects; provided, that the sum of the CSWE Guarantees and CSWI
Guarantees at any time outstanding and the net proceeds of common
stock sales and borrowings by CSW that may at any time be used by
CSW to fund investments in Exempt Projects (directly or indirectly
through Energy, CSWI or Project Parents) shall not, when added to
CSW's "aggregate investment," as defined in Rule 53(a) under the
Act, in all such entities, exceed 50% of CSW's "consolidated
retained earnings." The term "consolidated retained earnings,"
also defined in Rule 53(a) under the Act, is the average of
consolidated retained earnings for the previous four quarters, as
reported in CSW's Annual Report on Form 10-K and Quarterly Reports
on Form 10-Q.
CSW, Energy and CSWI now seek the approval of the
Commission required under Sections 6(a), 7 and 12(b) of the Act,
and Rule 45 thereunder, for CSWI from time to time to guarantee
Energy's obligations with respect to Securities issued on or before
the fifth anniversary of the date on which the Commission issues an
order making effective this Application-Declaration. The aggregate
principal amount of Securities with respect to which CSWI shall
issue such guarantees shall not exceed the Aggregate Principal
Amount. The authority requested pursuant to this Application-
Declaration constitutes new authority separate from the authority
granted by the Commission pursuant to any existing orders,
including the Financing Orders.
CSWI presently anticipates issuing the first of these
guarantees immediately upon receipt of, and subject to, Commission
approval pursuant to this Application-Declaration, on or before
September 30, 1996.
The transactions described in this Application-
Declaration help to fulfill the goals of CSW's, Energy's and CSWI's
program to develop and to make available energy and capacity from
Exempt Projects. New business opportunities with respect to Exempt
Projects constitute a potential source of growth for the CSW system
which would benefit CSW's ratepayers and its shareholders. In
order to take advantage of the expertise the CSW system has
developed over its long history, the Applicants are proposing to
consummate the transactions described in this Application-
Declaration to raise funds on a nonrecourse basis to CSW and the
Operating Companies to enable Energy and CSWI to finance
investments in and activities with respect to EWGs and Exempt
Projects, respectively.
(2) Structure of the Transactions. CSW, Energy and CSWI
will rely on the authority of the Commission under orders issued,
or rules adopted, previously by the Commission under the Act, to
conduct a transaction as follows: (i) pursuant to exemptions to
the restrictions of Section 6(a) of the Act available under Rule
52(b) promulgated under the Act, Energy from time to time will
issue to third parties the Securities in reliance on exemptions to
the registration of such securities under the 1933 Act, including
such exemptions available under Rule 144A thereunder, which third
parties will have no recourse under the Securities to CSW or any
Operating Company; (ii) pursuant to exemptions to the restrictions
of Section 6(a) of the Act available under Rule 52(b) promulgated
under the Act, Energy will make intercompany loans to CSWI of the
proceeds of the Securities; (iii) pursuant to Sections 32 and 33 of
the Act, Energy will use the proceeds of the Securities to finance
Energy's investments in and activities with respect to EWGs, and
CSWI will use the proceeds of the Securities received from Energy
via intercompany loans to finance CSWI's investments in and
activities with respect to Exempt Projects; (iv) pursuant to Rule
45(b)(4) of the Act and the CSWE Order, CSW and Energy will perform
under the Advances Letter that reflects the current authorization
of CSW to make CSWE Advances to Energy under the CSWE Order; and
(v) pursuant to exemptions to the restrictions of Sections 6(a) and
12(b) of the Act and Rule 45(a) thereunder available under Rules
45(b) and 52(b) promulgated under the Act, CSW will undertake to
continue such CSWE Advances through the date on which the
Securities mature. The proceeds of the Securities, which are
nonrecourse to CSW, and of any Advances, which will not be used to
pay any obligations of Energy or CSWI with respect to the
Securities, will not be included in any calculation of CSW's
"aggregate investment" in Exempt Projects as defined in Rule 53(a)
under the Act (even if such proceeds are invested by Energy in EWGs
or CSWI in Exempt Projects), unless, in accordance with Rule 53 or
other applicable rules or orders of the Commission under the Act,
Energy or CSWI uses such Advances to acquire the securities of or
otherwise invest in any Exempt Project.
CSWI proposes from time to time to provide a guarantee of
Energy's performance and undertaking of obligations, directly or
indirectly, to be incurred in connection with Securities issued on
or before the fifth anniversary of the date on which the Commission
issues an order making effective this Application-Declaration.
Accordingly, to the extent not authorized under the CSWI Order,
CSWI seeks the approval of the Commission required under
Sections 6(a), 7 and 12(b) of the Act and Rule 45 thereunder for
CSWI from time to time to issue such guarantees with respect to
Energy's obligations under Securities. The aggregate principal
amount of Securities with respect to which CSWI shall issue such
guarantees shall not exceed the Aggregate Principal Amount. No
fees or interest will be payable to CSWI by Energy or any other
associate company in respect of such guarantees. No amounts
advanced to CSWI by CSW under the CSWI Order will be used by CSWI
to satisfy its obligations under such guarantees.
Item 2. Fees, Commissions and Expenses.
The estimate of the approximate amount of fees and
expenses payable in connection with this Application-Declaration is
as follows:
Holding Company Act filing fee..........$ 2,000.00*
Counsel fees
Milbank, Tweed, Hadley & McCloy.... 15,000.00
Miscellaneous and incidental expenses
including travel, telephone,
postage and copying................ 5,000.00
Total.........................$22,000.00
____________________
* Actual Amount.
Item 3. Applicable Statutory Provisions.
Sections 6(a), 7 and 12 of the Act, and Rule 45
thereunder, are or may be applicable to the guarantee by CSWI of
Energy's obligations with respect to the Securities. To the extent
any other sections of the Act, or rules thereunder, may be
applicable to the transactions described in this Application-
Declaration, each of CSW, Energy and CSWI hereby requests, for
itself and its respective subsidiaries and associates, appropriate
authority thereunder.
Rule 54 under the Act is satisfied because Rules 53(a),
(b) and (c) are satisfied. As of August 15, 1996, CSW has invested
approximately $850 million in the aggregate in Exempt Projects, or
approximately 45% of $1,883 million, the average of CSW's
consolidated retained earnings for the four consecutive quarters
ended June 30, 1996, thus satisfying Rule 53(a)(1). CSW maintains
in conformity with United States generally accepted accounting
principles and makes available the books and records and financial
statements required by Rule 53(a)(2). No more than 2% of the
employees of CSW's operating subsidiaries presently render services
to an Exempt Project in which CSW owns an interest, satisfying Rule
53(a)(3). CSW submitted those documents required by Rule 53(a)(4)
to be submitted. None of the conditions described in Rule 53(b)
exist with respect to CSW or any of its subsidiaries, thereby
satisfying such rule and making Rule 53(c) inapplicable.
Item 4. Regulatory Approval.
No state or federal regulatory authority, other than the
Commission, has jurisdiction over the proposed transactions.
Item 5. Procedure.
It is requested that the Commission issue and publish no
later than July 19, 1996, the requisite notice under Rule 23 with
respect to the filing of this Application-Declaration, such notice
to specify a date not later than August 13, 1996, as the date after
which an order granting and permitting this Application-Declaration
to become effective may be entered by the Commission and the
Commission enter not later than August 14, 1996, an appropriate
order granting and permitting this Application-Declaration to
become effective.
CSW, Energy and CSWI respectfully request that
appropriate and timely action be taken by the Commission in this
matter in order that the transactions set forth above may take
place in the time period for the transactions contemplated by this
Application-Declaration.
No recommended decision by a hearing officer or other
responsible officer of the Commission is necessary or required in
this matter. The Division of Investment Management of the
Commission may assist in the preparation of the Commission's
decision in this matter, unless such Division opposes the matters
covered hereby. There should be no thirty-day waiting period
between the issuance and the effective date of any order issued by
the Commission in this matter, and it is respectfully requested
that such order be made effective immediately upon the entry
thereof.
Item 6. Exhibits and Financial Statements.
Confidential
Exhibit 1 - Advances Letter.
Exhibit 2 - Proposed Notice of
Proceeding.
Exhibit 3 - Preliminary Opinion of
Milbank, Tweed, Hadley &
McCloy, counsel for CSW,
Energy and CSWI.
Exhibit 4 - Final or "past tense"
Opinion of Milbank, Tweed,
Hadley & McCloy, counsel for
CSW, Energy and CSWI (to be
filed with the Certificate
of Notification).
Exhibit 5 - Financial Statements per
book and pro forma as of
June 30, 1996 of CSW and
Subsidiaries (consolidated),
CSW, Energy and CSWI.
Item 7. Information as to Environmental Effects.
The proposed transactions do not involve major federal
action having a significant effect on the human environment. See
Item 1. No federal agency has prepared or is preparing an
environmental impact statement with respect to the proposed
transactions.
S I G N A T U R E
Pursuant to the requirements of the Public Utility Holding
Company Act of 1935, as amended, the undersigned company has duly
caused this document to be signed on its behalf by the undersigned
thereunto duly authorized.
Date: August 27, 1996
CENTRAL AND SOUTH WEST CORPORATION
By:/s/WENDY G. HARGUS
Wendy G. Hargus
Treasurer
S I G N A T U R E
Pursuant to the requirements of the Public Utility Holding
Company Act of 1935, as amended, the undersigned company has duly
caused this document to be signed on its behalf by the undersigned
thereunto duly authorized.
Date: August 27, 1996
CSW ENERGY, INC.
By:/s/TERRY D. DENNIS
Terry D. Dennis
President and Chief Executive
Officer
S I G N A T U R E
Pursuant to the requirements of the Public Utility Holding
Company Act of 1935, as amended, the undersigned company has duly
caused this document to be signed on its behalf by the undersigned
thereunto duly authorized.
Date: August 27, 1996
CSW INTERNATIONAL, INC.
By:/s/TERRY D. DENNIS
Terry D. Dennis
President and Chief Executive
Officer
INDEX OF EXHIBITS
EXHIBIT TRANSMISSION
NUMBER EXHIBIT METHOD
1 Advances Letter (Confidential)
(previously filed). ---
2 Proposed Notice of Proceeding
(previously filed). ---
3 Preliminary Opinion of Milbank,
Tweed, Hadley & McCloy, counsel
for CSW, Energy and CSWI
(previously filed). ---
4 Final or "past tense" Opinion of
Milbank, Tweed, Hadley & McCloy,
counsel for CSW, Energy and CSWI
(to be filed with the Certificate
of Notification). ---
5 Financial Statements per book and
pro forma as of June 30, 1996 of
CSW and Subsidiaries
(consolidated), CSW, Energy and
CSWI (previously filed). ---
