File No. 70-5741
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
AMENDMENT NO. 2 (POST EFFECTIVE) TO
FORM U-1
APPLICATION-DECLARATION
UNDER THE
PUBLIC UTILITY HOLDING COMPANY ACT OF 1935
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SOUTHWESTERN ELECTRIC POWER COMPANY
428 Travis Street
Shreveport, Louisiana 71156-0001
PUBLIC SERVICE COMPANY OF OKLAHOMA
212 East Sixth Street
Tulsa, Oklahoma 74119-1212
CENTRAL POWER AND LIGHT COMPANY
539 North Carancahua Street
Corpus Christi, Texas 78401-2802
(Name of companies filing this statement and address
of principal executive office)
---------------------------------
CENTRAL AND SOUTH WEST CORPORATION
(Name of top registered holding company parent)
---------------------------------
Wendy G. Hargus
Treasurer
Central and South West Corporation
1616 Woodall Rodgers Freeway
P.O. Box 660164
Dallas, Texas 75202
Joris M. Hogan
Milbank, Tweed, Hadley & McCloy
1 Chase Manhattan Plaza
New York, New York 10005
(Names and addresses of agents for service)
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Southwestern Electric Power Company ("SWEPCO"), a Delaware
corporation, Public Service Company of Oklahoma ("PSO"), an Oklahoma
corporation, and Central Power and Light Company ("CPL" and, collectively with
SWEPCO and PSO, the "Applicants"), a Texas corporation, all wholly-owned
electric utility subsidiaries 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 "1935 Act"), hereby file this
Amendment No. 2 to the Form U-1 Application-Declaration in File No. 70-5741 for
the purposes expressed herein. Item 1. Description of Proposed Transaction.
Pursuant to orders (the "1976 Orders") of the Securities and
Exchange Commission (the "Commission") dated April 6, 1976 and April 9, 1976
(HCAR Nos. 19468 and 19643), SWEPCO was authorized to acquire, finance,
construct and operate a unit train repair facility (the "Repair Facility") near
Alliance, Nebraska. The Repair Facility is used for the maintenance and repair
of railroad cars for the transportation of coal to SWEPCO's coal-fired
electricity generation plants. The order dated April 9, 1976 stated that no rail
transportation services using the subject cars shall be provided by SWEPCO for
any associated company except pursuant to a further order of the Commission.
Pursuant to an order (the "1979 Order") of the Commission
dated February 22, 1979, SWEPCO and PSO were authorized to enter into a Rail Car
Maintenance Facility Agreement (the "Facility Agreement"), which provides for
PSO's
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participation in the cost and use of the Repair Facility. As more fully set
forth below in connection with CPL's proposed participation in a Revised Rail
Car Maintenance Facility Agreement (the "Revised Facility Agreement") with
SWEPCO and PSO, the Facility Agreement provides for: (1) the payment by each
company of the direct labor and materials costs of maintaining its rail cars;
(2) the sharing of indirect costs according to the ratio of each company's
direct labor costs to total direct labor costs; (3) the sharing of costs of
improvements to the Repair Facility according to the companies' agreement; (4)
PSO having an option to purchase a portion of the Repair Facility when SWEPCO
obtains legal title to the Repair Facility; and (5) SWEPCO retaining all tax
benefits of its equitable ownership of the Repair Facility and PSO receiving a
share of such tax benefits based on a weighted average cost ratio for each
fiscal year.
CPL proposes to participate with SWEPCO and PSO in the costs
and use of the Repair Facility on the same basis as PSO pursuant to the Revised
Facility Agreement. CPL currently employs unit trains and rail cars to transport
coal to certain of its coal-fired electricity generation plants from mines in
Wyoming and Colorado, which are a distance of over 1,000 miles from these
plants. The rail car repair facility that CPL had used to repair its rail cars
recently closed. CPL proposes to use the Repair Facility to repair its rail
cars. CPL's unit trains can be run over the same tracks through Alliance,
Nebraska as SWEPCO's and PSO's unit trains. The Repair Facility can be expanded
to furnish all of CPL's maintenance needs through the
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addition of extra workers without the need to construct
additional plant space.
The allocation of direct and indirect costs under the Revised
Facility Agreement will match the allocation under the Facility Agreement. The
Applicants propose to share according to a formula the cost of lease payments on
the Repair Facility, general operation and maintenance costs and all other costs
capitalized according to generally accepted accounting principles (the "Indirect
Costs"). The Applicants propose that Indirect Costs be shared among them on the
basis of a cost ratio (the "Cost Ratio"), which is equal to the ratio of each
Applicant's direct labor costs for its rail cars actually repaired or inspected
at the Repair Facility to the total direct labor costs for all rail cars owned
by the Applicants and repaired at the Repair Facility. The Cost Ratio will be
determined on the last day of each calendar month. Each Applicant will pay the
actual direct costs of inspection and maintenance of its own rail cars,
including parts, maintenance, labor and other expenses capable of direct
assignment to a specific rail car. All costs to the Applicants will be
determined in accordance with Rule 91 under the 1935 Act.
As under the Facility Agreement, the cost of leasehold
improvements to the Repair Facility will be allocated by agreement of the
Applicants under the Revised Facility Agreement. In the event leasehold
improvements are made in the future, the Applicants will share the costs of such
improvements on such terms and conditions as are agreed to by the Applicants at
the time of such improvements and as are approved by further
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application to the Commission. In reaching such agreement, the Applicants will
consider the degree to which each Applicant's increased usage of the Repair
Facility necessitated the improvements.
As noted above, under the Facility Agreement, PSO was granted
an irrevocable option to take legal title to a certain portion of the Repair
Facility at such time as SWEPCO acquires legal title to the Repair Facility.
Under the Revised Facility Agreement, the Applicants propose that PSO will
consent to its option being nullified, and each of PSO and CPL will be granted
new irrevocable options to take legal title to certain portions of the Repair
Facility at such time as SWEPCO acquires legal title to the Repair Facility.
Similar to the Facility Agreement, under the Revised Facility Agreement, PSO's
and CPL's options will allow each of them to take title to a portion of the
Repair Facility in a percentage equal to the proportion that its leasehold and
capital payments bears to the total leasehold and capital payments related to
the Repair Facility made by all the Applicants.
Like PSO, CPL intends to include the full amount of its lease
and capital payments in determining its fuel costs for purposes of the fuel
adjustment clauses in its rates, subject to applicable regulatory approval.
SWEPCO will treat PSO's and CPL's payments as sublease payments and they will be
credited to its fuel costs for purposes of its fuel cost adjustment clause.
As under the Facility Agreement, under the Revised Facility
Agreement, SWEPCO will retain all tax benefits of its equitable ownership of the
Repair Facility. PSO and CPL will
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each receive as a credit to the payments required from it under the Revised
Facility Agreement a share of such tax payments based upon a weighted average
cost ratio (the "Weighted Ratio") for each fiscal year. The Weighted Ratio is
the ratio that direct labor cost for each company bears to total direct labor
cost for each fiscal year.
SWEPCO will file quarterly reports pursuant to Rule 24 under
the 1935 Act providing, as to activities during each quarter: (1) the total
number of rail cars serviced by month for each of SWEPCO, PSO and CPL; (2) the
amount of expenditures by month for direct labor cost, direct material cost and
Indirect Costs for each of SWEPCO, PSO and CPL; (3) a computation by month of
allocated cost to be shared by SWEPCO, PSO and CPL on the basis of the Cost
Ratio; and (4) copies of the monthly reports furnished by SWEPCO to PSO and CPL
detailing the work and charges associated with PSO's and CPL's rail cars
assigned to the Repair Facility which were repaired during the previous month.
Item 2. Fees, Commissions and Expenses.
An estimate of the fees and expenses to be paid or incurred by
CSW in connection with the proposed transactions follows:
Holding Company Act Filing Fee ........... $ 2,000*
Counsel Fees:
Milbank, Tweed, Hadley & McCloy .... 5,000
Miscellaneous and incidental expenses
including travel, telephone and
postage ............................ 1,000
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Total .................................... $ 8,000
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* Actual Amount
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The fees and expenses include those charges incurred for the
services of Central and South West Services, Inc., an affiliate mutual service
company of CSW operating pursuant to Section 13 of the 1935 Act and the rules
thereunder.
Item 3. Applicable Statutory Provisions.
Sections 6(a), 7, 9(a) and 10 of the 1935 Act are or may be
applicable with respect to the proposed transactions.
To the extent that the proposed transactions are considered by
the Commission to require authorization, approval or exemption under any section
of the 1935 Act or provision of the rules or regulations other than those
specifically referred to herein, request for such authorization, approval or
exemption is hereby made.
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 1935 Act
("EWG"), or a foreign utility company, as defined in Section 33 of the 1935 Act
("FUCO"). Rule 54 promulgated under the 1935 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 EWG or a 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.
As set forth below, all
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applicable conditions set forth in Rule 53(a) are, and, assuming the
consummation of the transactions proposed herein, will be, satisfied and none of
the conditions set forth in Rule 53(b) exist or will exist as a result of the
transactions proposed herein.
CSW's "aggregate investment" (as defined under Rule 53(a) of
the 1935 Act) in EWGs and FUCOs as of December 31, 1996 was approximately $880
million, or about 45% of CSW's "consolidated retained earnings" as of December
31, 1996. CSW thus satisfies Rule 53(a)(1). CSW will maintain and make available
the books and records required by Rule 53(a)(2). No more than 2% of the
employees of CSW's operating subsidiaries will, 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). Lastly, CSW will 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 such rule and
making Rule 53(c) inapplicable.
Item 4. Regulatory Approval.
No federal or state regulatory authority, other than the
Commission under the 1935 Act, has any jurisdiction over the proposed
transactions.
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Item 5. Procedure.
CSW requests that the Commission issue and publish no later
than March 14, 1997, the requisite notice under Rule 23 with respect to the
filing of this Amendment No. 2, such notice to specify a date as soon as
possible, but in any case not later than April 11, 1997, as the date after which
an order granting and permitting this Amendment No. 2 to become effective may be
entered by the Commission and the Commission enter as soon as possible, but in
any case not later than April 18, 1997, an appropriate order granting and
permitting this Amendment No. 2 to become effective.
CSW respectfully requests that appropriate and timely action
be taken by the Commission in this matter in order to permit consummation of the
proposed transactions at the earliest possible date.
No recommended decision by a hearing officer or any 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
30-day waiting period between the issuance and the effective date or 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 CSW.
Exhibit 2 - Final or "past-tense" opinion of Milbank,
Tweed, Hadley & McCloy, counsel to CSW
(to
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be filed with the Certificate of
Notification).
Exhibit 3 - Financial Statements per books and pro
forma as of December 31, 1996 (to be
filed by amendment).
Exhibit 4 - Proposed Notice of Proceeding.
Exhibit 5 - Rail Car Maintenance Facility Agreement
among Southwestern Electric Power Company
and Public Service Company of Oklahoma
dated March 9, 1979.
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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: March 11, 1997,
SOUTHWESTERN ELECTRIC POWER COMPANY
PUBLIC SERVICE COMPANY OF OKLAHOMA
CENTRAL POWER AND LIGHT COMPANY
By:/s/WENDY G. HARGUS
Wendy G. Hargus
Treasurer
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INDEX OF EXHIBITS
EXHIBIT TRANSMISSION
NUMBER EXHIBITS METHOD
1 Preliminary opinion of Milbank, Electronic
Tweed, Hadley & McCloy, counsel to CSW.
2 Final or "past-tense" opinion of --
Milbank, Tweed, Hadley & McCloy,
counsel to CSW (to be filed with
the Certificate of Notification).
3 Financial Statements per books and --
pro forma as of December 31, 1996
(to be filed by amendment).
4 Proposed Notice of Proceeding. Electronic
5 Rail Car Maintenance Facility Paper
Agreement among Southwestern
Electric Power Company and Public
Service Company of Oklahoma dated March 9, 1979.
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EXHIBIT 1
Milbank, Tweed, Hadley & McCloy
1 Chase Manhattan Plaza
New York, New York 10005
March 11, 1997
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
Re: Southwestern Electric Power Company, et al.
Amendment No. 2 to the Form U-1 Application-
Declaration in File No. 70-5741
Dear Sirs:
We refer to Amendment No. 2 (the "Amendment") to the Form U-1
Application-Declaration (in File No. 70-5741) under the Public Utility Holding
Company Act of 1935, as amended (the "1935 Act"), filed by Southwestern Electric
Power Company ("SWEPCO"), a Delaware corporation, Public Service Company of
Oklahoma ("PSO"), an Oklahoma corporation, and Central Power & Light Company
("CPL" and, collectively with SWEPCO and PSO, the "Companies"), a Texas
corporation, each of which is a wholly-owned public utility subsidiary of
Central and South West Corporation, a Delaware corporation and a registered
holding company. The Amendment relates to the Companies' request to permit CPL
to participate in a Revised Rail Car Maintenance Facility Agreement with SWEPCO
and PSO, under which agreement CPL's unit train rail cars would be serviced at a
facility located near Alliance, Nebraska (the "Rail Car Repair Transactions"),
as more fully described in the Amendment. We have acted as special counsel for
the Companies in connection with the filing of the Amendment.
We have examined originals, or copies certified to our
satisfaction, of such corporate records of the Companies, certificates of public
officials, certificates of officers and representatives of the Companies and
other documents as we have deemed it necessary to require as a basis for the
opinions hereinafter expressed. In such examination we have assumed the
genuineness of all signatures and the authenticity of all documents submitted to
us as originals and the conformity with the originals of all documents submitted
to us as copies. As to various questions of fact material to such opinions we
have, when
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relevant facts were not independently established, relied upon certificates by
officers of the Companies and other appropriate persons and statements contained
in the Amendment.
Based upon the foregoing, and having regard to legal
considerations which we deem relevant, we are of the opinion that, in the event
that the proposed Rail Car Repair Transactions are consummated in accordance
with the Amendment, as it may be amended, and subject to the assumptions and
conditions set forth below:
1. All state laws applicable to the proposed Rail Car Repair
Transactions as described in the Amendment will have been
complied with.
2. The consummation of the proposed Rail Car Repair
Transactions as described in the Amendment will not violate
the legal rights of the lawful holders of any securities
issued by the Companies or any associate company of the
Companies.
The opinions expressed above in respect of the proposed Rail
Car Repair Transactions as described in the Amendment are subject to the
following assumptions or conditions:
a. The Rail Car Repair Transactions shall have been duly
authorized and approved to the extent required by state law by
the Boards of Directors of the Companies.
b. The Securities and Exchange Commission shall have duly
entered an appropriate order or orders granting and permitting
the Amendment to become effective with respect to the Rail Car
Repair Transactions described therein.
c. The Rail Car Repair Transactions shall be accomplished in
accordance with required approvals, authorizations, consents,
certificates and orders of any state commission or regulatory
authority with respect thereto and all such required
approvals, authorizations, consents, certificates and orders
shall have been obtained and remain in effect at the
commencement thereof.
d. No act or event other than as described herein shall have
occurred subsequent to the date hereof which would change the
opinions expressed above.
We hereby consent to the use of this opinion as an exhibit to
the Amendment.
Very truly yours,
MILBANK, TWEED, HADLEY & McCLOY
JMH/GWG
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EXHIBIT 4
SECURITIES AND EXCHANGE COMMISSION
(Release No. 35 - )
Filings Under the Public Utility Holding Company Act of 1935
("Act")
_______________, 1997
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
__________, 1997 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 matter. After said date, the application(s) and/or declaration(s), as filed
or as amended, may be granted and/or permitted to become effective.
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Southwestern Electric Power Company, et al. (File No. 70-5741)
Southwestern Electric Power Company ("SWEPCO"), a Delaware
corporation, Public Service Company of Oklahoma ("PSO"), an Oklahoma
corporation, and Central Power and Light Company ("CPL" and, collectively with
SWEPCO and PSO, the "Applicants"), a Texas corporation, all wholly-owned
electric utility subsidiaries of Central and South West Corporation ("CSW"), a
Delaware corporation and a registered holding company under the Act, have filed
a post-effective amendment to the Form U-1 Application-Declaration in File No.
70-5741 under sections 6(a), 7, 9(a) and 10 of the Act for the purposes
expressed herein.
Pursuant to orders (the "1976 Orders") of the Commission dated
April 6, 1976 and April 9, 1976 (HCAR Nos. 19468 and 19643), SWEPCO was
authorized to acquire, finance, construct and operate a unit train repair
facility (the "Repair Facility") near Alliance, Nebraska. The Repair Facility is
used for the maintenance and repair of railroad cars for the transportation of
coal to SWEPCO's coal-fired electricity generation plants. The order dated April
9, 1976 stated that no rail transportation services using the subject cars shall
be provided by SWEPCO for any associated company except pursuant to a further
order of the Commission.
Pursuant to an order (the "1979 Order") of the Commission
dated February 22, 1979, SWEPCO and PSO were authorized to enter into a Rail Car
Maintenance Facility Agreement (the "Facility Agreement"), which provides for
PSO's participation in the cost and use of the Repair Facility. The Facility
Agreement provides for: (1) the payment by each company
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of the direct labor and materials costs of maintaining its rail cars; (2) the
sharing of indirect costs according to the ratio of each company's direct labor
costs to total direct labor costs; (3) the sharing of costs of improvements to
the Repair Facility according to the companies' agreement; (4) PSO having an
option to purchase a portion of the Repair Facility when SWEPCO obtains legal
title to the Repair Facility; and (5) SWEPCO retaining all tax benefits of its
equitable ownership of the Repair Facility and PSO receiving a share of such tax
benefits based on a weighted average cost ratio for each fiscal year.
CPL proposes to participate with SWEPCO and PSO in the costs
and use of the Repair Facility on the same basis as PSO pursuant to a revised
Facility Agreement. Such revised Facility Agreement will contain the same terms
as the present Facility Agreement, except that it will provide for CPL's
participation on the same basis as PSO.
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