File No. 70-8727
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
__________________________________________
POST-EFFECTIVE AMENDMENT NO. 2
TO
FORM U-1 APPLICATION
UNDER
THE PUBLIC UTILITY HOLDING COMPANY ACT OF 1935
____________________________________________
PSI Energy, Inc.
1000 East Main Street
Plainfield, Indiana 46168
(Name of company filing this statement
and address of principal executive offices)
Cinergy Corp.
(Name of top registered holding company parent)
William L. Sheafer
Treasurer
Cinergy Corp.
139 East Fourth Street
Cincinnati, Ohio 45202
(Name and address of agent of service)
Applicant requests that the Commission send copies of all notices, orders
and communications in connection herewith to:
John M. Mutz Jerome A. Vennemann
President Associate General Counsel
PSI Energy, Inc. Cinergy Corp.
(address above) (address above)
1. Item 1.B ("Description of Proposed Transactions /Pilot Program
Implementation") is hereby revised solely to the extent of restating
the second paragraph thereunder to read as follows:
"The interim financial results of the Pilot Program have not met
PSI's expectations, with revenues less than and expenses more than
original estimates./1/ PSI believes that a principal reason why
revenues to date have not matched expectations is because of local
competition with other appliances and home electronics dealers.
Advertising expenses were higher than anticipated partly due to the
rush to open stores in time for the 1995 Christmas shopping season.
Since April of this year, the advertising strategy has been modified,
and monthly advertising expenses have fallen back into line with
original estimates. In addition, as described in greater detail in
Item 4, PSI entered into a settlement agreement with the Indiana
Office of Utility Consumer Counselor providing, among other things,
that 20% of the gross margins from all sales revenues to which PSI is
entitled as a result of its participation in the Pilot Program will be
allocated to PSI's retail electric customers through PSI's quarterly
fuel adjustment clause. Finally, initial non-recurring start-up costs
also exceeded estimates."
2. The following exhibit is filed herewith:
F-1 Preliminary opinion of counsel
<PAGE>
SIGNATURE
Pursuant to the requirements of the Act, the undersigned company has
duly caused this document to be signed on its behalf by the undersigned
thereunto duly authorized.
Dated: December 13, 1996
PSI Energy, Inc.
By: /s/ William L. Sheafer
Treasurer
<PAGE>
ENDNOTES
/1/ Specifically, through October 31, 1996, the Pilot Program had realized
net revenues of approximately $269,000, yielding, after deduction of cost
of goods sold ($247,000), a gross margin of approximately $22,000. Total
sales expenses were approximately $253,000, comprised of labor expenses of
$97,000 and advertising expenses of $156,000. Total operating expenses
were approximately $288,000, comprised of implementation and development
costs of $164,000, equipment costs of $52,000, training costs of $67,000
and "utility expense" of $4,400 (i.e., 20% of the gross margin, pursuant to
the settlement agreement with the Indiana Office of Utility Consumer
Counselor described in Item 4). Approximately $248,000 of the foregoing
costs constitute non-recurring start-up costs.
<PAGE>
EXHIBIT F-1
December 13, 1996
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
Re: PSI Energy, Inc. /File No. 70-8727
Dear Sirs:
In my capacity as Associate General Counsel of Cinergy Corp., a
registered holding company ("Cinergy"), I am furnishing this opinion as an
exhibit to the amended Application on Form U-1 in the above proceeding
("Application"), pursuant to which PSI Energy, Inc., an Indiana corporation
and an electric utility subsidiary of Cinergy ("PSI"), requests
authorization to continue through December 31, 1997, with certain
modifications, its participation in a business venture with a nonassociate
involving the retail marketing of household electronic appliances and
related consumer goods from certain of PSI's local offices in Indiana.
In connection with this opinion, I have reviewed or caused to be
reviewed under my supervision the Application and such other documents and
records as I deemed necessary or appropriate in order to give this opinion.
The transactions proposed in the Application are subject to receipt of an
appropriate order or orders of the Commission under the Public Utility
Holding Company Act of 1935.
Subject to the foregoing, I am of the opinion that in the event the
proposed transactions are consummated in accordance with the Application
including any further amendment that may be filed thereto:
(a) All state laws applicable to PSI's participation in the
transactions proposed in the Application will have been complied with.
(b) The consummation by PSI of the transactions proposed in the
Application will not violate the legal rights of the holders of any
securities issued by PSI or any associate company thereof.
I am a member of the Indiana Bar and express no opinion as to the laws
of any jurisdiction other than those of the State of Indiana. I hereby
consent to the filing of this opinion as an exhibit to the Application.
Very truly yours,
/s/ Ronald J. Brothers
Associate General Counsel
