File No. 70-8887
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
AMENDMENT NO. 3 (POST-EFFECTIVE) TO
FORM U-1 APPLICATION-DECLARATION
UNDER THE
PUBLIC UTILITY HOLDING COMPANY ACT OF 1935
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PUBLIC SERVICE COMPANY OF OKLAHOMA
212 East 6th Street
Tulsa, Oklahoma 74119-1212
(Names of company filing this statement and
address of principal executive office)
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CENTRAL AND SOUTH WEST CORPORATION
(Name of top registered holding company parent)
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William R. McKamey
General Manager
Public Service Company of Oklahoma
212 East 6th Street
Tulsa, Oklahoma 74119-1212
Wendy G. Hargus
Treasurer
Central and South West Corporation
1616 Woodall Rodgers Freeway
Dallas, Texas 75202
Joris M. Hogan, Esq.
Milbank, Tweed, Hadley & McCloy
1 Chase Manhattan Plaza
New York, New York 10005
(Name and addresses of agents for service)
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Public Service Company of Oklahoma ("PSO"), an Oklahoma
corporation and a wholly-owned electric utility subsidiary of Central and South
West Corporation ("CSW"), a Delaware corporation and a registered holding
company under the Public Utility Holding Company Act of 1935, as amended (the
"Act"), hereby files this Amendment No. 3 (Post-Effective) to the Form U-1
Application-Declaration in this File (the "Application") for the purposes of
amending the Application in the following respects:
Item 1. Description of Proposed Transaction.
By order dated December 30, 1996 (the "Order"), the Securities and
Exchange Commission (the "Commission") authorized PSO to make a capital
contribution to Nuvest L.L.C. ("Nuvest"), which provides services to public
utility companies through its subsidiaries, Numanco, Inc. ("NI") and Numanco
L.L.C. ("Numanco") (collectively, together with Nuvest, "Numanco Companies"). As
a result of such capital contribution, PSO acquired a 4.9% voting interest and
70% economic interest in Nuvest. PSO was also authorized to guarantee the
obligations of the Numanco Companies up to an aggregate $12 million. Public
Service Company of Oklahoma, Holding Co. Act Release No. 26638 (December 30,
1996). The aggregate amount of the guarantees authorized was based on the
projected financing and cash flow requirements of the Numanco Companies.
By this amendment, PSO is seeking authorization to (i)increase its
aggregate capital contribution in Nuvest to $5 million and (ii) increase the
current aggregate amount of authorized guarantees from $12,000,000 to
$18,000,000, based on increased operating capital requirements of the Numanco
Companies. PSO will maintain its 70% interest in the total capital
contributions, profits and losses of Nuvest, and its voting interest shall
remain at 4.9%. PSO will also receive an annual non-cash dividend on the
additional $4,300,000 investment at an interest rate equal to Numanco's then
current cost of debt. Item 2. Fees, Commissions and Expenses
The estimate of the approximate amount of fees and expenses payable in
connection with the transactions described herein is as follows:
Legal Fees and Expenses
Milbank, Tweed, Hadley & McCloy
New York, New York....................... $ 5,000
Miscellaneous and incidental
expenses including travel,
telephone and postage......................... 500
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$ 5,500
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Item 3. Applicable Statutory Provisions
General
Sections 6, 7 and 12 of the Act and Rules 23 and 54 under the
Act are or may be applicable to the proposed transactions described herein. To
the extent any other sections of or rules under the Act may be applicable to the
proposed transactions, PSO hereby requests appropriate orders thereunder.
Rule 54
No proceeds from the proposed transactions will be used by CSW
or any subsidiary thereof for the direct or indirect acquisition of an interest
in an exempt wholesale generator, as defined in Section 32 of the Act ("EWG"),
or a foreign utility company, as defined in Section 33 of the Act ("FUCO"). Rule
54 promulgated under the Act states that in determining whether to approve the
issue or sale of a security by a registered holding company for purposes other
than the acquisition of an exempt wholesale generator ("EWG") or a foreign
utility company ("FUCO"), or other transactions by such registered holding
company or its subsidiaries other than with respect to EWGs or FUCOs, the
Commission shall not consider the effect of the capitalization or earnings of
any subsidiary which is an EWG or a FUCO upon the registered holding company
system if Rule 53(a), (b) and (c) are satisfied. The Applicants currently meet
all of the criteria of Rule 53(a), except for clause (1). At June 30, 1998,
CSW's "aggregate investment," as defined in Rule 53(a)(1), in EWGs and FUCOs was
approximately $917 million, or approximately 51.51% of CSW's average
"consolidated retained earnings," as defined in Rule 53(a)(1), for the four
quarters ended June 30, 1998 (approximately $1.781 billion), which exceeds the
50% "safe harbor" limitation contained in that rule.
By order dated January 24, 1997, (HCAR No. 26653) ("January
1997 Order"), the Commission authorized CSW to increase to 100% of average
"consolidated retained earnings," as defined in Rule 53(a)(1), the aggregate
amount which it may invest in EWGs and FUCOs. Although CSW's aggregate
investment exceed the 50% "safe harbor" limitation contained in Rule 53, CSW's
aggregate investment is below the 100% limitation authorized under the January
1997 Order.
As of September 30, 1996, the most recent period for which
financial statement information was evaluated in the January 1997 Order, CSW's
consolidated capitalization consisted of 43.5% equity and 56.5% debt. CSW's
consolidated pro forma capitalization as of June 30, 1998, taking into account
the effect of the proposed transactions, is 41.8% equity and 58.2 % debt.
CSW asserts that since the date of the January 1997 Order,
there has been no material change in its consolidated capitalization ratio. CSW
further states that this ratio remains within acceptable ranges and limits, as
evidenced by CSW's corporate consolidated "A2" short term credit rating, which
has remained the same since the January 1997 Order.
In 1997, the government of Great Britain imposed a windfall
profits tax of $176 million on Seeboard, plc, a FUCO in the United Kingdom
wholly owned by CSW. Notwithstanding the imposition of this tax, earnings
attributable to CSW's interests in EWGs and FUCOs contributed positively to
consolidated earnings in the calendar year ending after the January 1997 Order.
Accordingly, since the date of the January 1997 Order, the earnings attributable
to CSW's investments in EWGs and FUCOs have not had any adverse impact on CSW's
financial integrity.
CSW will continue to maintain, in conformity with United States
generally accepted accounting principles, and make available the books and
records required by Rule 53(a)(2). CSW does, and will continue to, comply with
the requirement that no more than 2% of the employees of CSW's operating
subsidiaries shall, at any one time, directly or indirectly, render services to
an EWG or FUCO in which CSW directly or indirectly owns an interest, satisfying
Rule 53(a)(3). And lastly, CSW will continue to submit a copy of Item 9 and
Exhibits G and H of CSW's Form U5S to each of the public service commissions
having jurisdiction over the retail rates of CSW's operating utility
subsidiaries, satisfying Rule 53(a)(4). None of the conditions described in Rule
53(b) exist with respect to CSW or any of its subsidiaries, thereby satisfying
said Rule and making Rule 53(c) inapplicable.
Item 4. Regulatory Approval
No state regulatory authority and no federal regulatory
authority, other than the Commission under the Act, have jurisdiction over the
proposed transactions.
Item 5. Procedure
It is requested that the Commission issue and publish no later
than November 27, 1998, the requisite notice under Rule 23 with respect to the
filing of this Application, such notice to specify a date not later than
December 21, 1998, as the date after which an order granting and permitting this
Application to become effective may be entered by the Commission and the
Commission enter not later than December 22, 1998, an appropriate order granting
and permitting this Application to become effective.
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. 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 any such order be made effective immediately upon the entry thereof. Item
6. Exhibits and Financial Statements
Exhibit 1 - Preliminary Opinion of Milbank, Tweed, Hadley &
McCloy, counsel to the Company (to be filed by amendment).
Exhibit 2 - Final or "Past Tense" opinion of Milbank, Tweed,
Hadley & McCloy, counsel to the Company (to be filed with
Certificate of Notification).
Exhibit 3 - Proposed Notice of Proceeding.
Exhibit 4 - Financial Statements of Public Service Company of
Oklahoma, as of September 30, 1998 (to be filed by amendment).
Exhibit 5 - Form of amendment to Nuvest Member Agreement (to be
filed by amendment).
Item 7. Environmental Effects
The proposed transaction does not involve major federal action
having a significant effect on the human environment. To the best of the
Company's knowledge no federal agency has prepared or is preparing an
environmental impact statement with respect to the proposed transaction.
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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.
Dated: November 24, 1998
PUBLIC SERVICE COMPANY
OF OKLAHOMA
By:/s/ William R. McKamey
William R. McKamey
General Manager
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INDEX OF EXHIBITS
EXHIBIT TRANSMISSION
NUMBER EXHIBITS METHOD
1 Preliminary Opinion of Milbank, ---
Tweed, Hadley & McCloy, counsel
to the Company (to be filed by
amendment).
2 Final or "Past Tense" opinion of ---
Milbank, Tweed, Hadley & McCloy,
counsel to the Company (to be filed
with Certificate of Notification.)
3 Proposed Notice of Proceeding. Electronic
4 Financial Statements of Public ---
Service Company of Oklahoma, as of
September 30, 1998 (to be filed by
amendment).
5 Form of amendment to Nuvest Member ---
Agreement (to be filed by amendment).
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EXHIBIT 3
SECURITIES AND EXCHANGE COMMISSION
(Release No. 35- )
Filings Under the Public Utility Holding Company Act of 1935 ("Act")
_______________, 1998
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
___________, 1998 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 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 manner. After said date, the application(s) and/or declaration(s), as filed
or as amended, may be granted and/or permitted to become effective.
<PAGE>
Public Service Company of Oklahoma (70-8887)
Public Service Company of Oklahoma ("PSO"), an Oklahoma
corporation and a wholly-owned electric utility subsidiary of Central and South
West Corporation ("CSW"), a Delaware corporation and a registered holding
company under the Public Utility Holding Company Act of 1935, as amended (the
"Act"), located at 212 East 6th Street, Tulsa, Oklahoma 74119, has filed an
application pursuant to Sections 6, 7 and 12 of the Act and Rules 23 and 54
thereunder.
By order dated December 30, 1996, Commission authorized PSO to acquire
up to 4.9% of the voting interest of Nuvest, L.L.C. ("Nuvest"), which provides
services to public utility companies through its subsidiaries, Numanco, Inc.
("NI") and Numanco L.L.C. ("Numanco") (collectively, together with Nuvest,
"Numanco Companies"), and to guarantee the obligations of the Numanco Companies
up to an aggregate $12 million. Public Service Company of Oklahoma, Holding Co.
Act Release No. 26638 (December 30, 1996). The aggregate amount of the
guarantees authorized was based on the projected financing and cash flow
requirements of the Numanco Companies.
PSO is currently seeking authorization to (i)increase its aggregate
capital contribution in Nuvest to $5 million and (ii) increase the current
aggregate amount of authorized guarantees from $12,000,000 to $18,000,000, based
on increased operating capital requirements of the Numanco Companies. PSO will
maintain its 70% interest in the total capital contributions, profits and losses
of Nuvest, and its voting interest shall remain at 4.9%. PSO will also receive
an annual non-cash dividend on the additional $4,300,000 investment at an
interest rate equal to Numanco's then current cost of debt.
For the Commission, by the Division of Investment Management,
pursuant to delegated authority.
Jonathan G. Katz
Secretary
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