SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
In the Matter of CERTIFICATE
Cinergy Corp. et al. OF
File No. 70-8933 NOTIFICATION
(Public Utility Holding Company Act of
With reference to the transactions (a) proposed in the
Application-Declaration on Form U-1, as amended, in the above docket filed
by Cinergy Corp. ("Cinergy"), a Delaware corporation and registered holding
company under the Public Utility Holding Company Act of 1935 (the "Act"),
Cinergy Investments, Inc., a Delaware corporation and direct, wholly-owned
nonutility subsidiary of Cinergy ("Cinergy Investments"), and Cinergy
Services, Inc., a Delaware corporation and direct, wholly-owned service
company subsidiary of Cinergy ("Cinergy Services") and (b) authorized by
the Commission in its order dated February 7, 1997, Rel. No. 35-26662 (the
"1997 Order"), Cinergy Services hereby provides the following information:
1. The following summary, covering the quarterly period ended June 30,
2000, updates the business activities of Cinergy Solutions Holding Company,
Inc. (formerly Cinergy Solutions, Inc.) ("Cinergy Solutions Holdings"), a
Delaware corporation and direct, wholly-owned nonutility subsidiary of
Cinergy Investments, from the last quarterly filing in this docket.
a. Name Change; New Cinergy Solutions, Inc. As a preliminary
matter, in the calendar quarter just ended, Cinergy Solutions, Inc. changed
its name to Cinergy Solutions Holding Company, Inc. to emphasize the new
focus of this company. In the future, although certain business activities
may continue to be conducted by this company directly (in which regard see
paragraphs "g" and "i" below of this item 1), Cinergy Solutions Holdings is
anticipated to act primarily as a holding company over its various
operating company subsidiaries. In that connection, in June 2000 Cinergy
Solutions Holdings formed a new wholly-owned subsidiary, Cinergy Solutions,
Inc. ("Cinergy Solutions"), for the purpose of conducting certain
project-related preliminary developmental activities, principally related
to cogeneration projects, formerly conducted by Cinergy Solutions Holdings
itself (i.e, prior to the name change) and other energy-related businesses.
b. Scope of Report. This report provides information concerning
Cinergy Solutions Holdings and those subsidiaries of Cinergy Solutions
Holdings that, like Cinergy Solutions Holdings itself, may not be
considered "energy-related companies" within the meaning of rule 58 (and
whose activities are therefore not separately covered in Cinergy's
quarterly reports on Form U-9C-3), namely, (i) Vestar, Inc., a Delaware
corporation (formerly Cinergy Business Solutions, Inc.) and its
subsidiaries, including Vestar Limited (formerly Rose Technology Group
Limited), and (ii) 1388368 Ontario Inc., 3036243 Nova Scotia Company and
Cinergy Solutions Limited Partnership (the latter three entities,
collectively, the "Vestar Financing Entities"). The Vestar Financing
Entities were formed for the sole purpose of assisting in the realization
by Cinergy of certain tax benefits or other financial efficiencies in
connection with the financing of the acquisition of Vestar, Limited. (See
the chart enclosed herewith as Exhibit A showing Cinergy Solutions Holdings
and its subsidiaries as of June 30, 2000.)
c. Energy Management Services. As previously reported in this
docket, Vestar, Inc. and Vestar Limited (and their subsidiaries) are in the
business of marketing energy management services and solutions, intended to
create cost savings and improve efficiency and productivity, to
institutional, commercial and industrial customers in the United States and
Canada. In the calendar quarter ended June 30, 2000, Vestar, Inc. and
Vestar, Limited continued to be actively engaged in their North American
energy management and energy performance contracting businesses.
d. Asset Management Services. None, (i) except to the extent a part
of the energy performance contracting businesses of Vestar, Inc. and Vestar
Limited and their subsidiaries, and (ii) except to the extent conducted by
certain subsidiaries of Cinergy Solutions Holdings that are energy-related
companies within the meaning of rule 58 and with respect to which
information is reported in Cinergy's quarterly reports on Form U-9C-3
(e.g., the various subsidiaries formed pursuant to the joint venture with
Trigen Energy Corporation devoted to the development, ownership and/or
operation of cogeneration facilities).
e. Technical/Consulting Services. In 1998 Cinergy Solutions
Holdings formed a wholly-owned subsidiary, Cinergy Customer Care, Inc., to
market utility billing services and/or utility call center services to
utility companies. However, this subsidiary never commenced active
operations and was recently dissolved.
f. QF Project Development and Ownership. See Cinergy's quarterly
reports on Form U-9C-3 for information concerning Cinergy Solutions
Holdings' joint venture with Trigen Energy Corporation, which focuses on QF
development, and the numerous project companies that have been formed to
serve customers acquired pursuant to these joint venture activities. In
the future subsidiaries of Cinergy Solutions Holdings are anticipated to
develop cogeneration projects outside of the joint venture with Trigen.
g. Consumer Services. Cinergy Solutions Holdings is offering
various products and services to Cinergy's residential utility customers,
including an underground utility line warranty service.
h. Customer Financing. Effective year-end 1999, Cinergy Solutions
Holdings discontinued marketing its "Quick Credit" financial services
program previously described in this file. Cinergy Solutions Holdings is
not otherwise providing any stand-alone customer financing, either directly
or through any of its subsidiaries.
i. Third-Party Alliances. See Cinergy's quarterly reports on Form
U-9C-3 for information concerning Cinergy Solutions Holdings' joint venture
with Trigen Energy Corporation. In addition, Cinergy Solutions Holdings
recently entered into a marketing agreement with a nonaffiliate concerning
microturbines.
2. During the calendar quarter ended June 30, 2000,Cinergy Services
provided various services (including accounting; finance; engineering;
executive; legal; and human resources services) to Cinergy Solutions
Holdings and its subsidiaries (including energy-related companies under
rule 58) for a total cost of approximately $2,849,000. During that same
period, The Cincinnati Gas & Electric Company and PSI Energy, Inc. provided
engineering and construction services to Cinergy Solutions Holdings and its
subsidiaries (including energy-related companies under rule 58) totaling
approximately $198,000 and $77,000, respectively.
3. During the calendar quarter ended June 30, 2000, (a) Cinergy had
guarantees outstanding covering outstanding debt or other obligations
of Cinergy Solutions Holdings and its subsidiaries totaling approximately
$97 million; and (b) Cinergy Investments made net open-account advances to
Cinergy Solutions Holdings, for the benefit of Cinergy Solutions Holdings
and all of its subsidiaries (including energy-related companies under rule
58), totaling approximately $16,293,000 at annual interest rates ranging
from 6.42%to 6.54%.
4. During the calendar quarter ended June 30, 2000, neither Cinergy
Solutions Holdings nor any subsidiary thereof entered into any long- term
contract by which any of such entities performs long-term operations, load
control or network control of any electric generation, transmission or
distribution facility, other than in respect of qualifying cogeneration
facilities or customer-owned facilities in situations where the provision
of such services does not render Cinergy Solutions Holdings or any such
subsidiary a public utility under state law.
5. Consolidated financial statements for Cinergy Solutions dated June 30,
2000 are enclosed herewith under a claim for confidential treatment
pursuant to rule 104(b) under the Act.
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S I G N A T U R E
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.
Date: August 16, 2000
CINERGY SERVICES, INC.
By: /s/Andrew Turk
Vice President & Treasurer
