File No. 70-08717
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
AMENDMENT NO. 2
TO
FORM U-1 DECLARATION
UNDER THE
PUBLIC UTILITY HOLDING COMPANY ACT OF 1935
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Cinergy Corp. The Cincinnati Gas &
139 East Fourth Street Electric Company
Cincinnati, Ohio 45202 139 East Fourth Street
Cincinnati, Ohio 45202
(Name of company or companies filing this statement and
address of principal executive offices)
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Cinergy Corp.
(Name of top registered holding company parent)
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William L. Sheafer
Cinergy Corp.
139 East Fourth Street
Cincinnati, Ohio 45202
(Name and address of agent for service)
The Commission is requested to send copies of all notices, orders and
communications in connection with this Declaration to:
Jerome A. Vennemann James R. Lance
Associate General Counsel Manager - Corporate Finance and
Cinergy Corp. Financial Risk Management
139 East Fourth Street Cinergy Corp.
Cincinnati Ohio 45202 139 East Fourth Street
Cincinnati, Ohio 45202
<PAGE>
The Application-Declaration in this proceeding previously submitted to
this Commission is hereby amended as set forth below.
1. The phrase "prior to June 30, 1996" in the first sentence
of the first paragraph under Item 1 ("Description of Proposed
Transactions - Transaction Overview") is changed to read "prior to
November 30, 1996".
2. The text under Item 2 ("Fees, Commissions and Expenses") is
restated in its entirety to read as follows:
The fees, commissions and expenses to be incurred, directly or
indirectly, by CG&E or any associate company thereof in connection with
the proposed transaction are estimated as follows:
U-1 filing fee . . . . . . . . . . . . . $ 2,000
Miscellaneous out-of-pocket expenses . . 10,000
Fees of Cinergy Services, Inc. . . . . . 20,000
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Total $32,000
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3. The following exhibits are filed herewith:
D Copy of Order of The Public Utilities Commission of
Ohio (Case No. 95-948-GE-AIS).
F Opinion of counsel.
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 companies have duly caused
this document to be signed on their behalf by the undersigned thereunto
duly authorized.
CINERGY CORP.
By: /s/ William L. Sheafer
William L. Sheafer
Treasurer
THE CINCINNATI GAS
& ELECTRIC COMPANY
By: /s/ William L. Sheafer
William L. Sheafer
Treasurer
Dated: August 20, 1996
EXHIBIT D
BEFORE
THE PUBLIC UTILITIES COMMISSION OF OHIO
In the Matter of the Application of )
The Cincinnati Gas and Electric )
Company for Authority to Sell and ) Case No. 95-948-GE-AIS
Leaseback Certain Equipment at the )
Woodsdale Generating Station. )
FINDING AND ORDER
The Commission finds:
(1) Applicant, an Ohio corporation, is a public utility as
defined in Section 4905.02, Revised Code, and is subject to
the jurisdiction of this Commission.
(2) This Application, as amended (hereinafter called the
"Application"), is filed under the provisions of Sections
4905.40 and 4905.41, Revised Code.
(3) Applicant proposes to enter into a transaction, prior to
November 30, 1996, involving the sale and leaseback of
certain equipment of Unit Nos. 1 and 7 at its Woodsdale
Generating Station (the "Equipment") for an amount not to
exceed $40 million, pursuant to a lease agreement (the
"Lease") as described in the Application and Exhibits.
(4) To effectuate the transaction, Applicant will sell the
Equipment to BNY Leasing Corporation (the "Lessor") and
simultaneously with the sale of the Equipment, Applicant will
lease the Equipment back from the Lessor pursuant to the
Lease, as described in the Application and Exhibits.
(5) The initial term of the Lease will not be more than 10
years (the "Basic Lease Term"). At the end of the Basic
Lease Term, Applicant will have the option to (a) renew the
Lease; (b) purchase the Equipment, or (c) terminate the
Lease.
(6) Applicant's rental payments during the Basic Lease Term
will consist of interest only and will be based on an annual
lease interest factor, as described in the Application and
Exhibits.
(7) The proceeds from the sale of the Equipment will be
used for the redemption of Applicant's outstanding first
mortgage bonds, repayment of short-term debt and for other
general corporate purposes, all pursuant to Section 4905.40,
Revised Code.
(8) The proposed guidelines and parameters set forth in the
Application and Exhibits are intended to facilitate Applicant
to effectuate the Lease on the best terms possible and at
lowest cost. The authorization to enter into the Lease based
on the parameters in no way relieves Applicant of its
obligation to negotiate and obtain the best terms available.
(9) The aggregate amount of the Lease, the probable cost,
and other terms thereof, within the parameters set forth in
the Application and Exhibits, to be determined under the
arms' length negotiation between Applicant and the Lessor, do
not appear to be unjust or unreasonable.
(10) The effect on Applicant's revenue requirements resulting
from the Lease will be reflected in the determination of
required revenue in rate proceedings in which all factors
affecting rates are taken into account according to law. In
any event, Applicant states that the future revenue
requirement associated with the sale and leaseback of certain
equipment of Unit Nos. 1 and 7 will be no greater than if
these transactions had never occurred.
(11) Based on the information contained in the Application,
the Exhibits thereto and other documentary information to
which the Commission has access, the purposes to which the
proceeds from the sale of the Equipment shall be applied
appear to be reasonably required by Applicant to meet its
present and prospective obligations to provide utility
service and the Commission is satisfied that consent and
authority should be granted.
It is, therefore,
ORDERED, That The Cincinnati Gas & Electric Company is
authorized to enter into a transaction with BNY Leasing Corporation,
prior to November 30, 1996, involving the sale and leaseback of certain
equipment of Unit Nos. 1 and 7 at its Woodsdale Generating Station for
an amount not to exceed $40 million, consistent with terms and
conditions as set forth in the Application and Exhibits. It is,
further,
ORDERED, That Applicant shall apply the proceeds from the
Lease for the purposes set forth in this Order and otherwise pursuant
to the provisions of Section 4905.40, Revised Code. It is, further,
ORDERED, That Applicant shall file a written report with this
Commission, as promptly as possible after the Lease authorized by this
Order is consummated. It is, further,
ORDERED, That the Applicant shall account for the Lease as
prescribed in the Federal Energy Regulatory Commission Uniform System
of Accounts as currently in effect. It is, further,
ORDERED, That the authorization granted by this Order shall
not be construed as limiting the Commission's determination of the
appropriateness of these transactions for future rate making treatment.
It is, further,
ORDERED, That nothing in this Order shall be construed to
imply any guaranty or obligation by the Commission to assure completion
of any specific construction project of the Application. It is,
further,
ORDERED, That nothing in this Order shall be deemed to be
binding upon this Commission in any future proceeding or investigation
involving the justness or reasonableness of any rate, charge, rule or
regulation. It is, further,
ORDERED, That nothing in this Order shall be construed to imply
any guaranty or obligation as to the Lease or the associated rental
payments on the part of the State of Ohio. It is, further,
ORDERED, That a copy of this Order be served upon all parties
of record.
THE PUBLIC UTILITIES COMMISSION OF OHIO
/s/Craig A. Glazer, Chairman
_____________________________
Craig A. Glazer, Chairman
/s/Jolynn Barry Butler /s/Richard M. Fanelly
______________________ _____________________
Jolynn Barry Butler Richard M. Fanelly
/s/David W. Johnson
_____________________ _____________________
Ronda Hartman Fergus David W. Johnson
Entered in the Journal
August 1, 1996
_______________
A True Copy
/s/Gary E. Vigorito
___________________
Gary E. Vigorito
Secretary
EXHIBIT F
August 20, 1996
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
Dear Sirs:
I am Associate General Counsel of Cinergy Corp., a Delaware
corporation and registered holding company ("Cinergy"), and am
furnishing this opinion as an exhibit to Amendment No. 2 to the
Declaration on Form U-1, as amended, in File No. 70-8717 of Cinergy and
its public utility subsidiary, The Cincinnati Gas & Electric Company,
an Ohio corporation ("CG&E"). The Declaration was filed with the
Commission on October 12, 1995; Amendment No. 1 was filed on November
17, 1995; Amendment No. 2 is being filed concurrently herewith.
In the Declaration as amended, Cinergy and CG&E request
authorization for CG&E to sell, prior to November 30, 1996, for a price
expected not to exceed $40 million, certain electric utility equipment
at Units Nos. 1 and 7 of CG&E's Woodsdale Generating Station located in
southwestern Ohio, including gas combustion turbines and related
equipment such as transformers, boilers and water pumps (collectively,
the "Equipment"). CG&E anticipates selling the Equipment to a third-
party finance lessor and concurrently leasing the Equipment back from
the lessor under a lease authorized by the Public Utilities Commission
of Ohio. CG&E proposes to use the net proceeds from the sale of the
Equipment for lawful corporate purposes, as more specifically described
in the Declaration.
In connection with this opinion, I have reviewed or caused to be
reviewed the Declaration as amended and such other documents and
records as I deemed necessary or appropriate in order to give this
opinion. In the event that the proposed transactions are consummated
in accordance with the Declaration as amended (and as it may be further
amended), the order dated August 1, 1996 of the Public Utilities
Commission of Ohio in Case No. 95-948-GE-AIS, the order of the
Commission under the Public Utility Holding Company Act of 1935 to be
issued with respect thereto and CG&E's first mortgage indenture, I am
of the opinion that:
(a) All laws of the State of Ohio applicable to CG&E's
participation in the proposed transactions will have been complied
with.
(b) The consummation by CG&E of the proposed transactions will
not violate the legal rights of the holders of any securities issued by
CG&E or any associate company thereof.
I am a member of the Ohio Bar and express no opinion as to the
laws of any jurisdiction other than those of the State of Ohio. I
hereby consent to the filing of this opinion as an exhibit to the
Declaration as amended.
Very truly yours,
/s/ Jerome A. Vennemann
Associate General Counsel
