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FORM U-3A-2
File No. 69-353
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.
Statement by Holding Company Claiming Exemption
Under Rule U-3A-2 from the Provisions of the
Public Utility Holding Company Act of 1935
ESELCO, Inc. hereby files with the Securities and Exchange Commission,
pursuant to Rule 2, its statement claiming exemption as a holding company from
the provisions of the Public Utility Holding Company Act of 1935 and submits the
following information:
1. CLAIMANT - ESELCO, Inc.
725 East Portage Avenue
Sault Ste. Marie, Michigan 49783
State of organization: Michigan
Nature of business: Holding Company
SUBSIDIARIES - Edison Sault Electric Company
725 East Portage Avenue
Sault Ste. Marie, Michigan 49783
State of organization: Michigan
Nature of business: Generation, purchase, transmission
and distribution of electric energy in a service area
in the eastern Upper Peninsula of Michigan.
- Northern Tree Service, Inc.
725 East Portage Avenue
Sault Ste. Marie, Michigan 49783
State of organization: Michigan
Nature of business: Tree removal and tree trimming
service within the upper peninsula and the northern
part of the lower peninsula of Michigan.
2. PROPERTIES
(a) Claimant -
Claimant's total properties consist of the Common Stock of Edison
Sault Electric Company.
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(b) Subsidiary -
Edison Sault Electric Company ("Edison Sault") owns a
hydroelectric plant with a rated capacity of 30,000 KW located on the
St. Mary's River at Sault Ste. Marie, Michigan. Edison Sault owns and
operates internal combustion generation with a name plate rating of
4800 KW.
Edison Sault owns and maintains transmission and distribution
lines in its service area in the Michigan counties of Chippewa, Delta,
Mackinac and Schoolcraft.
Edison Sault's transmission and distribution lines are located
for the most part on or under public streets, alleys, highways and
other public property, or on private property with permission of the
individual owners. Edison Sault property located on or under public
property was installed pursuant to valid consents granted by the
appropriate local authorities.
Edison Sault also owns substations, switching stations, garages,
warehouses, offices and other buildings necessary in the conduct of
its business.
All of Edison Sault's property is located in Michigan, and all
deliveries of electric energy sold for resale are made at points
within Michigan. Edison Sault has no transmission facilities which
deliver or receive electric energy at the Michigan borders.
3. Claimant submits the following information for the calendar year 1996
with respect to claimant and Edison Sault Electric Company:
Claimant sold, purchased and distributed no electric energy in 1996.
In 1995, Edison Sault Electric Company:
(a) Sold (at retail or wholesale) 794,226 MWH of electric energy;
(b) Distributed no electric energy at retail outside Michigan;
(c) Sold at wholesale no electric energy outside Michigan or at the
state line;
and
(d) Purchased no electric energy outside Michigan or at the state
line.
4. Claimant submits that neither it nor Edison Sault holds directly or
indirectly any interest in an exempt wholesale generator or foreign utility
company.
Information listed under Items 2, 3 and 4 pertain to ESELCO and Edison Sault
Electric Company only.
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EXHIBIT A
The unaudited Consolidating Statements of Income and Retained Earnings for
the year ended December 31, 1996 and a Consolidating Statement of Financial
Position as of December 31, 1996 for ESELCO and its subsidiaries are attached as
Exhibit A.
The above-named claimant has caused this statement to be duly executed on
its behalf by its authorized officer on this 25th day of February, 1997.
ESELCO, INC.
\s\ William R. Gregory
By: ____________________________________
William R. Gregory, President
Attest:
\s\ David R. Hubbard
__________________________________________
David R. Hubbard, Vice President - Finance
Name, title and address of officer to whom notices and correspondence concerning
this statement should be addressed:
Donald C. Wilson, Secretary
ESELCO, Inc.
725 East Portage Avenue
Sault Ste. Marie, Michigan 49783
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<CAPTION>
E S E L C O, INC. EXHIBIT A
CONSOLIDATING STATEMENT OF FINANCIAL POSITION 1 OF 3
DECEMBER 31, 1996
EDISON ESELCO N T S ELIMINATIONS CONSOLIDATED
SAULT
----------- ----------- ----------- ------------ ------------
<S> <C> <C> <C> <C> <C>
ASSETS:
PLANT, at original cost $71,337,136 $7,315 $457,870 $0 $71,802,321
Less - Accumulated depreciation 29,461,470 0 209,568 0 29,671,038
----------- ----------- ----------- ----------- -----------
$41,875,666 $7,315 $248,302 $0 $42,131,283
Asset acquired under capital lease 2,851,622 0 0 0 2,851,622
----------- ----------- ----------- ----------- -----------
$44,727,288 $7,315 $248,302 $0 $44,982,905
CURRENT ASSETS: ----------- ----------- ----------- ----------- -----------
Cash $229,265 $1,255,000 $44,618 ($1,235,000) $293,883
Accounts receivable, less reserve
of $32,000 2,982,994 610,404 25,698 (619,313) 2,999,783
Unbilled revenue 1,693,826 0 0 0 1,693,826
Materials and supplies, at average cost 1,148,046 0 0 0 1,148,046
Prepayments 1,953,110 0 13,822 0 1,966,932
----------- ----------- ----------- ----------- -----------
$8,007,241 $1,865,404 $84,138 ($1,854,313) $8,102,470
----------- ----------- ----------- ----------- -----------
INVESTMENTS IN SUBSIDIARIES $0 $20,089,395 $0 ($20,089,395) $0
----------- ----------- ----------- ----------- -----------
OTHER ASSETS:
Debt expense, being amortized $28,972 $0 $0 $0 $28,972
Regulatory asset 3,510,181 0 0 0 3,510,181
Other 529,750 1,443 0 0 531,193
----------- ----------- ----------- ----------- -----------
$4,068,903 $1,443 $0 $0 $4,070,346
----------- ----------- ----------- ----------- -----------
TOTAL ASSETS $56,803,432 $21,963,557 $332,440 ($21,943,708) $57,155,721
=========== =========== =========== =========== ===========
STOCKHOLDERS' INVESTMENT AND LIABILITIES:
CAPITALIZATION:
Common equity $19,326,732 $20,995,846 $1,539 ($20,089,395) $20,234,722
Preferred stock 0 0 0 0 0
Long-term debt (less current portion) 16,329,291 421,110 147,786 0 16,898,187
----------- ----------- ----------- ----------- -----------
$35,656,023 $21,416,956 $149,325 ($20,089,395) $37,132,909
OTHER NONCURRENT LIABILITIES: ----------- ----------- ----------- ----------- -----------
Obligation under capital lease $2,775,905 $0 $0 $0 $2,775,905
CURRENT LIABILITIES: ----------- ----------- ----------- ----------- -----------
Notes payable $2,354,000 $0 $0 ($1,235,000) $1,119,000
Current portion of long-term debt 2,742,709 134,614 0 0 2,877,323
Current portion of lease obligation 75,717 0 0 0 75,717
Accounts payable 2,186,980 0 159,455 (203,353) 2,143,082
Dividends declared 415,960 415,960 0 (415,960) 415,960
Accrued taxes 1,755,829 (3,973) 2,245 0 1,754,101
Current deferred income taxes 66,755 0 0 0 66,755
Accrued interest 165,822 0 393 0 166,215
Other 270,116 0 0 0 270,116
----------- ----------- ----------- ----------- -----------
$10,033,888 $546,601 $162,093 ($1,854,313) $8,888,269
DEFERRED CREDITS: ----------- ----------- ----------- ----------- -----------
Deferred income taxes $4,433,604 $0 $21,022 $0 $4,454,626
Net regulatory liability 1,193,526 0 0 1,193,526
Unamortized investment tax credit 873,181 0 0 0 873,181
Other 1,837,305 0 0 0 1,837,305
----------- ----------- ----------- ----------- -----------
$8,337,616 $0 $21,022 $0 $8,358,638
TOTAL STOCKHOLDERS' INVESTMENT ----------- ----------- ----------- ----------- -----------
AND LIABILITIES $56,803,432 $21,963,557 $332,440 ($21,943,708) $57,155,721
=========== =========== =========== =========== ===========
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<TABLE>
<CAPTION>
E S E L C O, INC. EXHIBIT A
2 OF 3
CONSOLIDATING STATEMENT OF INCOME
For the Year Ended December 31, 1996
EDISON ESELCO N T S ELIMINATIONS CONSOLIDATED
SAULT
------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
OPERATING REVENUES $37,287,472 $0 $536,747 ($324,288) $37,499,931
------------ ------------ ------------ ------------ ------------
OPERATING EXPENSES:
Operation - Purchased power $18,851,035 $0 $0 $0 $18,851,035
- Other 6,585,500 13,943 468,118 (324,288) 6,743,273
Maintenance 2,142,159 0 0 0 2,142,159
Depreciation and amortization 2,576,327 0 38,068 0 2,614,395
Property and other taxes 1,546,185 (250) 10,416 0 1,556,351
Income taxes 1,257,575 (7,795) (2,584) 0 1,247,196
------------ ------------ ------------ ------------ ------------
Total operating expenses $32,958,781 $5,898 $514,018 ($324,288) $33,154,409
------------ ------------ ------------ ------------ ------------
Net operating income $4,328,691 ($5,898) $22,729 $0 $4,345,522
------------ ------------ ------------ ------------ ------------
OTHER INCOME (DEDUCTIONS), NET ($47,594) $65,376 $0 ($65,376) ($47,594)
------------ ------------ ------------ ------------ ------------
INTEREST CHARGES:
Interest on long-term debt $1,352,246 $0 $15,141 $0 $1,367,387
Other interest 185,229 0 12,603 (65,376) 132,456
------------ ------------ ------------ ------------ ------------
Total interest charges $1,537,475 $0 $27,744 ($65,376) $1,499,843
------------ ------------ ------------ ------------ ------------
NET INCOME $2,743,622 $59,478 ($5,015) $0 $2,798,085
EQUITY IN EARNINGS OF SUBSIDIARIES 0 2,738,607 0 (2,738,607) 0
------------ ------------ ------------ ------------ ------------
NET INCOME AVAILABLE FOR COMMON $2,743,622 $2,798,085 ($5,015) ($2,738,607) $2,798,085
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<TABLE>
<CAPTION>
E S E L C O, INC. EXHIBIT A
3 OF 3
CONSOLIDATING STATEMENT OF RETAINED EARNINGS
For the Year Ended December 31, 1996
EDISON ESELCO N T S ELIMINATIONS CONSOLIDATED
SAULT
------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
BALANCE BEGINNING OF YEAR $8,290,956 $4,250,891 ($57,446) ($8,233,510) $4,250,891
ADD:
INVESTMENT IN SUBSIDIARY 0 2,738,607 0 (2,738,607) 0
NET INCOME 2,743,622 59,478 (5,015) 0 2,798,085
------------ ------------ ------------ ------------ ------------
$11,034,578 $7,048,976 ($62,461) ($10,972,117) $7,048,976
DEDUCT:
DIVIDENDS ON COMMON STOCK 1,633,840 1,633,840 0 (1,633,840) 1,633,840
3% STOCK DIVIDEND 0 1,210,551 0 0 1,210,551
------------ ------------ ------------ ------------ ------------
BALANCE END OF YEAR $9,400,738 $4,204,585 ($62,461) ($9,338,277) $4,204,585
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