As filed with the Securities and Exchange Commission on July 21, 1994
File No. 70-8353
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
AMENDMENT NO. 3 (U-1/A)
to
FORM U-1
APPLICATION
UNDER
THE PUBLIC UTILITY HOLDING COMPANY ACT OF 1935
Unicom Corporation
(formerly named CECo Holding Company)
37th Floor
10 South Dearborn Street
Post Office Box 767
Chicago, Illinois 60690-0767
(Name of company filing this statement
and address of principal executive office)
R. Todd Vieregg, P.C. Frederic G. Berner, Jr.
Sidley & Austin Nancy Y. Gorman
One First National Plaza Sidley & Austin
Chicago, Illinois 60603 1722 Eye Street, N.W.
(312) 853-7000 Washington, D.C. 20006
(202) 736-8000
(Names and addresses of agents for service)
<PAGE>
Unicom Corporation ("Unicom"), formerly named CECo
Holding Company, is filing this Amendment No. 3 to its Form U-1
Application (the "Application") under the Public Utility Holding
Company Act of 1935 (the "1935 Act" or the "Act") filed with the
Securities and Exchange Commission ("Commission") on February 4,
1994, for the purpose of filing an additional exhibit and
advising the Commission that the Federal Energy Regulatory
Commission ("FERC") has approved the corporate restructuring
proposed in the Application.
* * *
ITEM 4. REGULATORY APPROVALS./1/
---------------------
On February 4, 1994, Commonwealth Edison Company
("Edison") filed an application requesting the FERC to approve
the proposed restructuring under Section 203 of the Federal Power
Act. By order dated July 15, 1994, the FERC authorized Edison to
create a holding company structure pursuant to which Edison will
become a subsidiary of Unicom. A certified copy of the FERC's
order is attached hereto as Exhibit D-2. On January 31, 1994,
Edison requested that the Nuclear Regulatory Commission ("NRC")
approve the de jure transfer of NRC licenses pursuant to 10
-- ----
C.F.R. Sec. 50.80. By letter order dated June 13, 1994, the NRC
____________________
/1/ This item amends Item 4 as it appears at p. 35 of the
Application.
1
<PAGE>
consented to the proposed ownership of Edison by Unicom. The NRC
concluded therein that the proposed restructuring "will not
affect the qualifications of [Edison] as a holder of the licenses
for the nuclear plants" and that the proposed restructuring "is
otherwise consistent with applicable provisions of law,
regulations, and other requirements issued by the [NRC] pursuant
thereto." (Letter order at 3). A certified copy of the NRC's
letter order is attached hereto as Exhibit D-6.
* * *
ITEM 6. EXHIBITS AND FINANCIAL STATEMENTS.
---------------------------------
This Amendment includes the following supplemental
exhibit:
Exhibit D-2: Order of the FERC approving the proposed
restructuring pursuant to Section 203 of the
Federal Power Act.
2
<PAGE>
SIGNATURES
Pursuant to the requirements of the Public Utility
Holding Company Act of 1935, Unicom Corporation has duly caused
this Amendment to be signed on its behalf by the undersigned
thereunto duly authorized.
UNICOM CORPORATION
(formerly named
CECo Holding Company)
By: /s/ John C. Bukovski
----------------------
John C. Bukovski
Vice-President
Dated: July 21, 1994
3
<PAGE>
EXHIBIT LIST
------------
Exhibit D-2: Order of the FERC approving the proposed
restructuring pursuant to Section 203 of the
Federal Power Act.
Exhibit D-2
UNITED STATES OF AMERICA
FEDERAL ENERGY REGULATORY COMMISSION
CERTIFICATION
I hereby certify that the attached 6 pages are
-------
true and correct copies of a document on file with the
Commission.
July 19, 1994 /s/ Arve L. Milner
---------------- ---------------------
Date Custodian
[Commission's I hereby certify that the Custodian, or his
Seal] designee, which signature appears above,
is the official custodian of the records of
the Federal Energy Regulatory Com-
mission which certification is made and was
such official custodian at the time of
executing the above certification.
Lois D. Cashell
--------------------------------------------
Secretary
FERC-03-F-028
<PAGE>
68 FERC Par. 62,049
UNITED STATES OF AMERICA
FEDERAL ENERGY REGULATORY COMMISSION
Commonwealth Edison Company Docket No. EC94-10-000
ORDER AUTHORIZING DISPOSITION OF JURISDICTIONAL FACILITIES
(Issued July 15, 1994)
On February 4, 1994, as supplemented on June 20, 1994,
Commonwealth Edison Company (Commonwealth Edison) filed an
application pursuant to section 203 of the Federal Power Act 1/
for Commission authorization to dispose of its jurisdictional
facilities due to a proposed corporate restructuring. Commonwealth
Edison states that the corporate restructuring would be
accomplished through the creation of a holding company, Unicom
Corporation, of which Commonwealth Edison would become a
subsidiary.
Description of Commonwealth Edison's Current Corporate Structure
----------------------------------------------------------------
Commonwealth Edison is a public utility within the meaning of
the Federal Power Act 2/ and owns and operates jurisdictional
facilities within the State of Illinois. Commonwealth Edison also
owns all of the common stock of Commonwealth Edison Company of
Indiana, Inc. (Indiana Company), which also is a public utility and
which owns a 490 MW generating plant located in Indiana and sells
the output from the plant to Commonwealth Edison. In addition,
Commonwealth Edison has six wholly-owned, non-public utility
subsidiaries:
(1) CECo Enterprises Inc. (CECo Enterprises), which was
established to provide, through subsidiaries, unregulated
energy-related services for Commonwealth Edison's customers
and others;
(2) Edison Development Company, which owns coal, land and mineral
rights including an interest in uranium ore deposits;
(3) Edison Development Canada Inc., which has an interest in
uranium ore deposits in Canada;
(4) Cotter Corporation, which owns uranium mining properties in
certain western states and a mineral processing plant;
(5) Commonwealth Research Corporation, which is engaged in power
supply research, development, and testing activities; and
(6) Concomber, Ltd., which insures liability risks of Commonwealth
---------------------
1/ 16 U.S.C. Sec. 824b (1988).
2/ See 16 U.S.C. Sec. 824(e) (1988).
<PAGE>
2
Commonwealth Edison Company -- Docket No. EC94-10-000
Edison's contractors arising from construction or other work
relating to Commonwealth Edison's utility business. 3/
Description of the Proposed Restructuring
-----------------------------------------
To implement the restructuring, 4/ Commonwealth Edison has
formed a subsidiary, Unicom Corporation (Unicom), 5/ which, in
turn, has also formed a subsidiary, CECo Merging Corporation.
Following receipt of Commission and other necessary approvals, CECo
Merging Corporation will merge with and into Commonwealth Edison,
with Commonwealth Edison designated as the surviving corporation.
As part of the transaction, all outstanding shares of Commonwealth
Edison common stock will be converted on a share-for-share basis
into Unicom common stock. Unicom thereby will become the owner of
all outstanding shares of Commonwealth Edison common stock. The
common stock of Commonwealth Edison will thereafter cease to be
listed and traded, and the common stock of Unicom will be listed
and traded instead. As a result, Unicom will become the holding
company parent of Commonwealth Edison, i.e., Commonwealth Edison
will become a wholly-owned subsidiary of Unicom. In addition,
following the merger with CECo Merging Corporation, Commonwealth
Edison will transfer to Unicom all of the stock of CECo
Enterprises.
Except for the common stock of Unicom to be issued to
facilitate the transaction, no other securities will be issued.
In addition, Commonwealth Edison's outstanding debt, preferred, and
preference stock will be unaffected by the restructuring and will
remain the securities and obligations of Commonwealth Edison. 6/
Furthermore, because the proposed transaction involves only the
conversion of each share of Commonwealth Edison common stock into a
share of Unicom common stock, the proportion of each shareholder's
ownership will be unchanged. Therefore, according to Commonwealth
--------------------
3/ Application at 3.
4/ The proposed restructuring is pursuant to an Agreement and
Plan of Merger between Commonwealth Edison and CECo Merging
Corporation dated January 28, 1994, and to a Supplemental
Agreement between Commonwealth Edison, CECo Holding Company
(kna Unicom Corporation) and CECo Merging Corporation dated
January 28, 1994. Application at Exhibit H.
5/ The holding company was originally named CECo Holding Company.
On May 10, 1994, the name was changed to Unicom Corporation.
June 20, 1994 Supplement to Application at 1.
6/ The proposed reorganization received shareholder approval on
May 10, 1994. June 20, 1994 Supplement to Application at 2.
<PAGE>
3
Commonwealth Edison Company -- Docket No. EC94-10-000
Edison, the restructuring will have no effect on the capital
structure of the company or any of its subsidiaries existing prior
to the restructuring. 7/
Commonwealth Edison states that the creation of a parent
holding company structure will have no effect on its rates,
facilities or operations. The proposed transaction will simply
implement a new organizational structure that will permit the
timely establishment of unregulated affiliates of Commonwealth
Edison to provide energy-related services and to respond to
competitive initiatives in the energy industry. Commonwealth
Edison also states that the corporate reorganization will segregate
utility and non-utility businesses in a manner that will protect
its utility ratepayers from the business risks and costs of
diversification. 8/ According to the application, the
reorganization will also increase the company's financial
flexibility, and encourage economic development in Commonwealth
Edison's service area. 9/
Notice of the Filing and Responses
----------------------------------
Notice of the application was published in the Federal
Register with comments, protests or interventions due on or before
March 3, 1994. On March 3, 1994, the Cities of Batavia and St.
Charles, Illinois (Illinois Cities) filed a timely motion to
intervene raising no substantive issues. Illinois Cities state
that because they were not served with the filing, they have not
--------------------
7/ As part of the transaction, the 100 shares of issued and
outstanding CECo Merging Company stock (which were issued when
the company was formed) will be converted into the number of
shares of Commonwealth Edison common stock that are issued and
outstanding as of the date of the transaction, and the 100
shares of issued and outstanding Unicom stock (which were
issued when the company was formed) as of the date of the
transaction will be cancelled and retired.
8/ Commonwealth Edison notes that recent amendments to the
Illinois Public Utilities Act (Illinois Act), which became
effective in 1993, permit Commonwealth Edison to establish the
proposed holding company structure and to create subsidiaries
to compete with non-utility businesses. However, according to
company, the Illinois Act requires that upon completion of the
holding company formation Commonwealth Edison transfer its
unregulated non-utility business (i.e., CECo Enterprises) to
Unicom in order to shelter Commonwealth Edison's ratepayers
from the costs and risks of diversification.
9/ Application at 4-5.
<PAGE>
4
Commonwealth Edison Company -- Docket No. EC94-10-000
had an opportunity to review the application. Illinois Cities
request that they be permitted, after reviewing the filing, to
amend and supplement their motion to intervene. No other responses
were received. No further response from Illinois Cities has been
filed.
Discussion
----------
Pursuant to Rule 214(c)(1) of the Commission's Rules of
Practice and Procedure, 10/ the timely, unopposed motion to
intervene filed by Illinois Cities serves to make them a party to
this proceeding.
In Central Vermont Public Service Corporation (Central
Vermont), 11/ the Commission concluded that the transfer of
ownership and control of jurisdictional facilities, through a
transfer of a public utility's common stock from existing
shareholders to a newly created holding company, constitutes a
disposition of jurisdictional facilities requiring prior Commission
approval under section 203. Consistent with the Commission's
holding in Central Vermont, because Commonwealth Edison's proposed
restructuring would entail the transfer of ownership of its common
stock from existing shareholders to Unicom, the restructuring is
subject to the requirements of section 203.
It is determined that Commonwealth Edison's proposed
reorganization will be consistent with the public interest.
Commonwealth Edison indicates that under the restructuring
proposal, utility and non-utility operations will be segregated in
compliance with the Illinois Act. Commonwealth Edison states that
the proposed restructuring will have no effect on Commonwealth
Edison's wholesale rates. Furthermore, future changes in
Commonwealth Edison's wholesale rates would be subject to
Commission review and approval under section 205 of the FPA.
As noted above, the proposed restructuring involves the
conversion of each share of Commonwealth Edison common stock into a
share of Unicom common stock. Therefore, the proportion of each
shareholder's ownership will be unchanged.
The proposed restructuring also will not impair the
effectiveness of state or Federal regulation. Commonwealth
Edison's services, rates and facilities will be unaffected by the
restructuring and will continue to be regulated by the Illinois
Commerce Commission and by the Commission.
--------------------
10/ 18 C.F.R. Sec. 385.214 (1993).
11/ 39 FERC Par. 61,295 (1987).
<PAGE>
5
Commonwealth Edison Company -- Docket No. EC94-10-000
While Unicom is not proposing to merge with another holding
company at this time, it is possible that in the future such a
merger may take place. In an order approving a similar holding
company formation by Illinois Power Company, the Commission
clarified its jurisdiction under section 203 regarding the effect
that mergers of public utility holding companies have on their
public utility subsidiaries. 12/ While noting that it does not
have jurisdiction over public utility holding company mergers or
consolidations, the Commission concluded that, ordinarily, when
public utility holding companies merge, an indirect merger
involving their public utility subsidiaries also takes place, and
that Commission approval under section 203 would be required.
Consequently, the Commission stated:
We therefore will presume, subject to rebuttal,
that mergers between public utility holding
companies also accomplish an indirect merger of
their public utility subsidiaries. If the
public utilities can rebut the presumption, we
will find that jurisdiction will not attach
until such time as the public utility
subsidiaries formally merge or consolidate
their facilities. If the public utilities
cannot rebut the presumption, section 203
approval of the indirect merger of the public
utilities will be required. (footnote omitted)
[13/]
Accordingly, Commonwealth Edison is advised that in the event
Unicom should seek to merge with another public utility holding
company, Commonwealth Edison and any other affected public utility
are required to file under section 203 evidence to rebut the
presumption that such a merger would not also result in an indirect
merger of the public utility subsidiaries, or alternatively for
approval of an indirect merger of the public utilities.
Based on the foregoing analysis and in the absence of
opposition to the application, it is concluded that the disposition
of jurisdictional facilities of Commonwealth Edison in the above-
described corporate restructuring is consistent with the public
interest and is hereby authorized, subject to the following
conditions:
(1) The proposed transaction is authorized upon the terms and
conditions and for the purposes set forth in the
--------------------
12/ Illinois Power Company, 67 FERC Par. 61,136 (1994).
13/ 67 FERC at 61,354-55.
<PAGE>
6
Commonwealth Edison Company -- Docket No. EC94-10-000
application;
(2) The Commission retains authority under section 203(b) of
the Federal Power Act to issue supplemental orders as
appropriate;
(3) The foregoing authorization is without prejudice to the
authority of this Commission or any other regulatory body
with respect to rates, service, accounts, valuation,
estimates, determinations of cost, or any other matter
whatsoever now pending or which may come before the
Commission;
(4) Nothing in this order shall be construed to imply
acquiescence in any estimate or determination of cost or
any valuation of property claimed or asserted;
(5) Commonwealth Edison is directed to submit a filing to the
Commission's Chief Accountant requesting approval of its
accounting for the costs of restructuring, including
complete information on the nature and amount of all
costs incurred; and
(6) In the event Unicom should seek to merge with another
public utility holding company, the public utility
subsidiaries of those companies are required to file
under section 203 evidence to rebut a presumption that a
merger of the holding companies would not also result in
an indirect merger of the public utility subsidiaries, or
alternatively for approval of an indirect merger of the
public utilities.
Authority to act in this matter is delegated to the Director,
Division of Opinions and Systems Analysis, pursuant to 18 C.F.R.
Sec. 375.308. This order constitutes final agency action.
Requests for rehearing by the Commission may be filed within thirty
(30) days of the date of issuance of this order, pursuant to 18
C.F.R. Sec. 385.713.
/s/ Robert E. Cackowski
Robert E. Cackowski
Director, Division of Opinions
and Systems Analysis
