File No. 70-____
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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
<PAGE>
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 a wholly-owned nonutility
subsidiary of CSW ("CSWI" and, collectively with CSW and Energy, the
"Applicants"), hereby file this Form U-1 Application-Declaration (this
"Application-Declaration") to seek the authority of the Commission as set forth
below.
In summary, the Applicants seek an order of the Commission
under Section 13(b) of the Act, and Rules 83, 86, 87, 88, 90, 91 and 94
thereunder, authorizing Energy, CSWI and any subsidiary of an Applicant other
than CSW's domestic operating utility subsidiaries (collectively, the "Operating
Companies") from time to time to enter into agreements to provide energy-related
services to associate companies at fair market prices. No such energy-related
services will be rendered to an associate company unless one or more the
following conditions are satisfied: (i) such associate company is an exempt
wholesale generator, as defined in Section 32 of the Act ("EWG"), that derives
no part of its income, directly or indirectly, from the generation, transmission
or distribution of electric energy for sale within the United States or is a
foreign utility company, as defined in Section 33 of the Act ("FUCO" and,
collectively with EWGs, "Exempt Projects"); (ii) such associate company is an
EWG that sells electricity at market-based rates which have been approved by the
Federal Energy Regulatory Commission ("FERC") or the appropriate state public
utility commission, provided that the purchaser of energy produced by such
associate company is not an Operating Company; (iii) such services are rendered
to such associate company in respect of a "qualifying facility" ("QF"), as
defined under the Public Utility Regulatory Policies Act of 1978, as amended
("PURPA"), that sells electricity exclusively at rates negotiated at arm's
length to one or more industrial or commercial customers purchasing such
electricity for their use not for resale, or to an electric utility company,
other than an Operating Company, at the purchaser's "avoided cost" determined in
accordance with the regulations promulgated by FERC under PURPA or at such other
rates negotiated at arm's length with such electric utility company; (iv) such
associate company is an EWG or a QF that sells electricity at rates approved by
FERC or any state public utility commission having jurisdiction, provided that
the purchaser of such electricity produced by such associate company is not an
Operating Company or (v) such associate company is a subsidiary of an Applicant,
the sole business of which is developing, owning and/or operating Exempt
Projects or QFs described in clauses (i), (ii), (iii) or (iv) above and/or
providing to such associate companies or third parties 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 services) to foreign electric utility enterprises that are not Exempt
Projects.
Item 1. Description of Proposed Transaction.
(1) History and Nature of Request. CSW is a registered holding company
under the Act. Since 1990, CSW, directly or through 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), QFs and
independent power facilities, including EWGs.1 Since 1994, CSW, directly or
through CSWI, has engaged in development and investment activities in 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 services) to
foreign electric utility enterprises that are not Exempt Projects.2
The Applicants now seek the approval of the Commission
required under the Act: (i) for CSWI, Energy and any subsidiary of an Applicant
other than any Operating Company from time to time to enter into agreements to
provide energy-related services to associate companies at fair market prices and
(ii) for such other relief as may be required under the Act. The authority
requested pursuant to this Application-Declaration constitutes new authority
separate from the authority granted previously by the Commission to the
Applicants.
The requested time limit of Commission authorization, within
which the Applicants may engage in such activities, is until December 31, 2003.
After such date, the Applicants request approval to retain and preserve any
agreement entered into for the rendering of energy-related services by Energy,
CSWI or any subsidiary of an Applicant other than any Operating Company, on or
prior to such date pursuant to authority granted by this
Application-Declaration.
The transactions described in this Application-Declaration
help to fulfill the goals of CSW's program to provide energy-related services
that are derivative of the core business of the Operating Companies. New
domestic and international business opportunities constitute a potential source
of growth for the CSW system which would benefit CSW's ratepayers and
shareholders. In order to take advantage of the expertise the CSW system has
developed over its long history, the Applicants propose to participate in the
transactions described in this Application-Declaration. If any future exemption
under the Act provides the Applicants with greater latitude with respect to any
of the matters for which authority is requested pursuant to this
Application-Declaration, the Applicants intend to rely on that exemption rather
than on any authority granted pursuant to this Application-Declaration.
(2) Associate Contracts. The Applicants seek authority of the
Commission pursuant to Section 13(b) of the Act and Rules 83, 86, 87, 88, 90, 91
and 94 thereunder for CSWI, Energy and any subsidiary of an Applicant other than
any Operating Company from time to time to enter into agreements to provide
energy-related services to associate companies at fair market prices. No such
energy-related services will be rendered to an associate company unless one or
more the following conditions are satisfied: (i) such associate company is an
EWG that derives no part of its income, directly or indirectly, from the
generation, transmission or distribution of electric energy for sale within the
United States or is a FUCO; (ii) such associate company is an EWG that sells
electricity at market-based rates which have been approved by the FERC or the
appropriate state public utility commission, provided that the purchaser of
energy produced by such associate company is not an Operating Company; (iii)
such services are rendered to such associate company in respect of a QF that
sells electricity exclusively at rates negotiated at arm's length to one or more
industrial or commercial customers purchasing such electricity for their use not
for resale, or to an electric utility company, other than an Operating Company,
at the purchaser's "avoided cost" determined in accordance with the regulations
promulgated by FERC under PURPA or at such other rates negotiated at arm's
length with such electric utility company; (iv) such associate company is an EWG
or a QF that sells electricity at rates approved by FERC or any state public
utility commission having jurisdiction, provided that the purchaser of such
electricity produced by such associate company is not an Operating Company or
(v) such associate company is a subsidiary of an Applicant, the sole business of
which is developing, owning and/or operating Exempt Projects or QFs described in
clauses (i), (ii), (iii) or (iv) above and/or providing to such associate
companies or third parties 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 services) to foreign
electric utility enterprises that are not Exempt Projects. None of the associate
companies specified in clause (v) above that shall acquire services at
market-based rates pursuant to the authority sought under this
Application-Declaration will sell, or offer to sell, services to any Operating
Company without additional Commission authority.
The Commission's authorization of fair market prices with
regard to energy-related services rendered to an associate company shall not be
binding on FERC or any state public-utility commission having jurisdiction over
rates charged by any such associate company. The Applicants and their
subsidiaries will not assert or take any position to the contrary in any
administrative or judicial proceeding involving the determination of rates that
may be charged by any such associate company.
In no event will the agreements for such goods or services
contemplate as of the time of their execution and delivery that such goods or
services will be provided at a price less than the cost to CSWI, Energy or any
subsidiary of an Applicant other than any Operating Company (as the case may be)
or at a price that would result in any subsidization of such associate company
by CSWI, Energy or any such subsidiary. In no event will the provision of such
services adversely affect the ratebase or the costs to ratepayers of any
Operating Company.
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:
Counsel fees
Milbank, Tweed, Hadley & McCloy.... 15,000.00
Miscellaneous and incidental expenses
including travel, telephone,
postage and copying................ 5,000.00
Total.........................$20,000.00
Item 3. Applicable Statutory Provisions.
Section 13(b) of the Act, and Rules 83, 86, 87, 88, 90, 91 and
94 thereunder, are or may be applicable to the proposed transactions. Section
13(b) of the Act and Rules 83, 86, 87, 88, 90, 91 and 94 thereunder are or may
be applicable to the rendering of services by CSWI, Energy or any subsidiary of
an Applicant other than any Operating Company to associate companies, and the
rationale of the Commission set forth in (i) HCAR No. 26322 (Entergy
Corporation, et al. Memorandum Opinion and Supplemental Order) issued in File
No. 70-8105, (ii) HCAR No. 26623 (Northeast Utilities, et al.) issued in File
No. 70-8507, (iii) HCAR No. 26504 (New England Electric System, et al.) issued
in File No. 70-8783, and (iv) HCAR No. 26216 (The Southern Company, et al.)
issued in File No. 70-7932, is applicable to the rendering of services at fair
market rates by CSWI, Energy or any such subsidiary to associate companies other
than Operating Companies. To the extent any other sections of the Act, or rules
thereunder, may be applicable to the proposed transactions, each of the
Applicants hereby requests, for itself and its respective subsidiaries and
associates, appropriate orders thereunder.
Rule 54 under the Act is satisfied because Rules 53(a), (b)
and (c) are satisfied. As of August 14, 1997, CSW has invested approximately
$913 million in the aggregate in Exempt Projects, or approximately 46% of $1,970
million, the average of CSW's consolidated retained earnings for the four
consecutive quarters ended June 30, 1997, 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 the Operating
Companies presently render services to any 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 under the Act, has jurisdiction over the proposed transaction.
Item 5. Procedure.
It is requested that the Commission issue and publish no later
than August 22, 1997, the requisite notice under Rule 23 with respect to the
filing of this Application-Declaration, such notice to specify a date not later
than September 16, 1997, 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 September 17, 1997, an
appropriate order granting and permitting this Application-Declaration to become
effective.
The Applicants respectfully request that appropriate and
timely action be taken by the Commission in this matter in order that the
transactions contemplated by this Application-Declaration may take place in the
time period for the transactions contemplated hereby.
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.
Exhibit 1 - Proposed Notice of Proceeding.
Exhibit 2 - Financial Statements per book and pro
forma as of June 30, 1997 of CSW and
Subsidiaries (consolidated), CSW and 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 transaction.
<PAGE>
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 21, 1997
CENTRAL AND SOUTH WEST CORPORATION
By:/s/WENDY G. HARGUS
Wendy G. Hargus
Treasurer
<PAGE>
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 21, 1997
CSW ENERGY, INC.
By:/s/TERRY D. DENNIS
Terry D. Dennis
President and Chief Executive
Officer
<PAGE>
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 21, 1997
CSW INTERNATIONAL, INC.
By:/s/TERRY D. DENNIS
Terry D. Dennis
President and Chief Executive
Officer
<PAGE>
INDEX OF EXHIBITS
EXHIBIT TRANSMISSION
NUMBER EXHIBIT METHOD
1 Proposed Notice of Proceeding. Electronic
2 Financial Statements per book and pro ---
forma as of June 30, 1997 of CSW and
Subsidiaries (consolidated), CSW and
Energy and CSWI (to be filed by amendment).
Exhibit 1
SECURITIES AND EXCHANGE COMMISSION
(Release No. 35-________)
Filings Under the Public Utility Holding Company Act of 1935 ("Act")
__________, 1997
Notice is hereby given that the following filing(s) has/have been made
with the Commission pursuant to provisions of the Act and rules promulgated
thereunder. All interested persons are referred to the application(s) and/or
declaration(s) for complete statements of the proposed transaction(s) summarized
below. The application(s) and/or declaration(s) and any amendment(s) thereto
is/are available for public inspection through the Commission's Office of Public
Reference.
Interested persons wishing to comment or request a hearing on the
application(s) and/or declaration(s) should submit their views in writing by
__________, 1997 to the Secretary, Securities and Exchange Commission,
Washington, D.C. 20549, and serve a copy on the relevant applicant(s) and/or
declarant(s) at the address(es) specified below. Proof of service (by affidavit
or, in the case of an attorney at law, by certificate) should be filed with the
request. Any request for hearing shall identify specifically the issues of fact
or law that are disputed. A person who so requests will be notified of any
hearing, if ordered, and will receive a copy of any notice or order issued in
the matter. After said date, the application(s) and/or declaration(s), as filed
or as amended, may be granted and/or permitted to become effective.
Central and South West Corporation, CSW Energy, Inc. and CSW International,
Inc. (70-____)
Central and South West Corporation ("CSW"), a registered holding
company, its nonutility subsidiary, CSW Energy, Inc. ("Energy"), and CSW's
nonutility subsidiary, CSW International, Inc. ("CSWI"), have filed an
application-declaration (the "Application") pursuant to the Act. In summary, the
Applicants seek an order of the Commission under Section 13(b) of the Act, and
Rules 83, 86, 87, 88, 90, 91 and 94 thereunder, authorizing Energy, CSWI and any
subsidiary of an Applicant other than CSW's domestic operating utility
subsidiaries (collectively, the "Operating Companies") from time to time to
enter into agreements to provide energy-related services to associate companies
at fair market prices. No such energy-related services will be rendered to an
associate company unless one or more the following conditions are satisfied: (i)
such associate company is an exempt wholesale generator, as defined in Section
32 of the Act ("EWG"), that derives no part of its income, directly or
indirectly, from the generation, transmission or distribution of electric energy
for sale within the United States or is a foreign utility company, as defined in
Section 33 of the Act ("FUCO" and, collectively with EWGs, "Exempt Projects");
(ii) such associate company is an EWG that sells electricity at market-based
rates which have been approved by the Federal Energy Regulatory Commission
("FERC") or the appropriate state public utility commission, provided that the
purchaser of energy produced by such associate company is not an Operating
Company; (iii) such services are rendered to such associate company in respect
of a "qualifying facility" ("QF"), as defined under the Public Utility
Regulatory Policies Act of 1978, as amended ("PURPA"), that sells electricity
exclusively at rates negotiated at arm's length to one or more industrial or
commercial customers purchasing such electricity for their use not for resale,
or to an electric utility company, other than an Operating Company, at the
purchaser's "avoided cost" determined in accordance with the regulations
promulgated by FERC under PURPA or at such other rates negotiated at arm's
length with such electric utility company; (iv) such associate company is an EWG
or a QF that sells electricity at rates approved by FERC or any state public
utility commission having jurisdiction, provided that the purchaser of such
electricity produced by such associate company is not an Operating Company or
(v) such associate company is a subsidiary of an Applicant, the sole business of
which is developing, owning and/or operating Exempt Projects or QFs described in
clauses (i), (ii), (iii) or (iv) above and/or providing to such associate
companies or third parties 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 services) to foreign
electric utility enterprises that are not Exempt Projects. Since 1990, CSW,
directly or through 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), QFs and independent power facilities, including
EWGs.1 Since 1994, CSW, directly or through CSWI, has engaged in development and
investment activities in 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 services) to foreign electric utility
enterprises that are not Exempt Projects.2
The requested time limit of Commission authorization, within which the
Applicants may engage in such activities, is until December 31, 2003. After such
date, the Applicants request approval to retain and preserve any agreement
entered into for the rendering of energy-related services by Energy, CSWI or any
subsidiary of an Applicant other than any Operating Company, on or prior to such
date pursuant to authority granted by this Application-Declaration.
The estimate of the approximate amount of fees and expenses payable in
connection with the transaction is $20,000.
Section 13(b) of the Act, and Rules 83, 86, 87, 88, 90, 91 and 94
thereunder, are or may be applicable to the rendering of services by CSWI,
Energy or any subsidiary of CSW, CSWI or Energy other than any Operating Company
to associate companies, and the rationale of the Commission set forth in (i)
HCAR No. 35-26322 (Entergy Corporation, et al. Memorandum Opinion and
Supplemental Order) issued in File No. 70-8105, (ii) HCAR No. 26623 (Northeast
Utilities, et al.) issued in File No. 70-8507, (iii) HCAR No. 26504 (New England
Electric System, et al.) issued in File No. 70-8783, and (iv) HCAR No. 26216
(The Southern Company, et al.) issued in File No. 70-7932, is applicable to the
rendering of services at fair market rates by CSWI, Energy or any such
subsidiary to associate companies other than Operating Companies. To the extent
any other sections of the Act, or rules thereunder, may be applicable to the
proposed transactions, the Applicants seek, for itself and its respective
subsidiaries and associates, appropriate orders thereunder. The Applicants state
that Rule 54 under the Act is satisfied because Rules 53(a), (b) and (c) are
satisfied.
The Applicants state that no state or federal regulatory authority,
other than the Commission under the Act, has jurisdiction over the proposed
transaction.
For the Commission, by the Division of Investment Management, pursuant
to delegated authority.
Jonathan G. Katz
Secretary
___________________
1 See HCAR Nos. 25162 (September 28, 1990), 25414 (November 22,
1991), 25728 (December 31, 1992) and 26417 (November 28, 1995) issued
in File No. 70-7758; HCAR Nos. 25866 (August 6, 1993) and 26416
(November 28, 1995) issued in File No. 70-8205; and HCAR No. 266531
(January 24, 1997) issued in File No. 70-8809.
2 See HCAR Nos. 26156 (November 3, 1994) and 26383 (September 27,
1995) issued in File No. 70-8423; and HCAR No. 266531 (January 24,
1997) issued in File No. 70-8809.
