<PAGE>
Exhibit D-4.1
[LETTERHEAD OF WALLER LANSDEN DORTCH & DAVIS]
June 5, 2000
Mr. K. David Waddell
Executive Secretary
Tennessee Regulatory Authority
460 James Robertson Parkway
Nashville, Tennessee 37243
Re: LG&E Energy Corp. merger with PowerGen plc
------------------------------------------
Dear Mr. Waddell:
The purpose of this letter is to inform the Tennessee Regulatory Authority
("TRA") that LG&E Energy Corp. ("LG&E Energy"), a Kentucky holding company that
is the parent company of Kentucky Utilities Company ("KU"), has agreed to merge
with PowerGen plc ("PowerGen"), a public limited company formed under the laws
of England and Wales. We have been asked by LG&E to request confirmation that
the proposed LG&E Energy - PowerGen merger (the "Merger") does not require
approval by the TRA.
KU is an electric utility authorized by the TRA to provide electric service
in the State of Tennessee. Currently, KU has five (5) customers in Tennessee;
its primary operations are in Kentucky and Virginia. LG&E Energy is a holding
company which owns KU and Louisville Gas and Electric Company. KU and Louisville
Gas and Electric Company are separate operational subsidiaries of LG&E Energy.
It is our position that the proposed Merger does not require TRA approval
because neither KU Energy nor PowerGen is a "public utility" within the meaning
of T.C.A. Section 65-4-101. Consequently, T.C.A. Section 65-4-112, the statute
that gives the TRA jurisdiction to approve certain public utility mergers, is
not applicable to the companies in question and thus the Merger is outside the
scope of the TRA's jurisdiction.
<PAGE>
Mr. K. David Waddell
June 5, 2000
Page 2
On behalf of LG&E Energy, I would appreciate receiving written confirmation
that approval of the proposed Merger by the TRA is not required. As you may
recall, we made a similar request in connection with the earlier merger of KU
Energy Corp. (the then parent of KU) and LG&E Energy in 1997. Here, as with the
1997 merger, the merging companies are both holding companies and the respective
component operating utility companies (subsidiaries), including KU, will
maintain their independent operating characteristics after the Merger. Copies of
our 1997 correspondence are enclosed for your reference. (Tab A). Also enclosed,
for your general information is a copy of the Joint Application of PowerGen and
LG&E Energy to the Kentucky Public Service Commission, filed March 15, 2000,
(Tab B) and copies of the organizational charts of LG&E Energy (Tab C) and
PowerGen (Tab D) prior to the Merger and a copy of the PowerGen proposed
organizational chart after the Merger. (Tab E).
The proposed Merger is subject to approval by the Securities and Exchange
Commission ("SEC") under the Public Utility Holding Company Act of 1935, as
amended ("PUHCA"). Section 9(a)(2) of the PUHCA provides, in part, that unless
an acquisition such as the proposed Merger has been approved by the SEC, it is
unlawful "for any person ... to acquire, directly or indirectly, any security of
any public-utility company," if that person will by virtue of the transaction
come to own five percent or more of the voting securities of two or more
public-utility companies. See 15 U.S.C. (S) 79i(a)(2). As a subsidiary of LG&E
---
Energy, KU is a public-utility company for purposes of PUHCA. As a result of the
proposed Merger, PowerGen will be deemed to acquire indirectly more than five
percent of the voting securities of KU and the other utility company
subsidiaries of LG&E Energy. Therefore, PowerGen is required to obtain SEC
approval under PUHCA prior to completing the proposed Merger.
Under Section 10(f) of PUHCA, the SEC may not approve a proposed merger
unless, inter alia, "it appears ... that such State laws as may apply in respect
----------
of such acquisition have been complied with ...." See 15 U.S.C. (S) 79j(f). In
---
order to ensure that the provisions of Section 10(f) are satisfied, the SEC
requires the filing of "a certified copy of any findings, orders, or
certificates evidencing express authorization of any part of the proposed
transaction by each ... State or Federal commission." See 17 C.F.R. 259.101. To
---
ensure that the interests of utility consumers are protected on a going-forward
basis, the SEC routinely requests that each State served by a public-utility
company which is subject to the requirements of Section 10 provide a
certification that the State has the authority and resources
<PAGE>
Mr. K. David Waddell
June 5, 2000
Page 3
to protect its resident utility consumers after the transaction is consummated.
The SEC's protocol is to make a request directly for this certification.
Therefore, the TRA will be contacted in the near future by the SEC, by letter,
with a request for written confirmation for the SEC's records that the State of
Tennessee, through the TRA, will continue to have the statutory authority and
regulatory resources to protect the Tennessee rate-paying consumers of KU
following the Merger.
We would appreciate your prompt response to this request and to the
anticipated request from the SEC. Thank you in advance for your time and
attention to this matter.
Sincerely,
/s/ D. Billye Sanders
D. Billye Sanders
DBS/WHC:cl
Enc.
cc: Richard Collier, Esq. (TRA General Counsel)
Walter H. Crouch, Esq.
J. Wade Hendricks, Esq.
Richard T. Miller, Esq.
Michael S. Beer, Esq.
<PAGE>
Exhibit A
[LETTERHEAD OF TENNESSEE REGULATORY AUTHORITY]
December 8, 1997
D. Billye Sanders. Esq.
Waller, Lansden, Dortch and Davis
511 Union Street, Suite 2100
Nashville, TN 37219
Re: Merger of KU Energy Corporation and LG&E Energy Corporation.
Dear Ms. Sanders:
I received your letter dated October 21, 1997. I have reviewed the details of
the letter which sets out the merger between KU Energy Corporation and LG&E
Energy Corporation. According to the charts you have provided, the merger
involves the two companies and a holding company with the component companies
maintaining their own operating structures. It would appear that as long as the
entities retain their independent operating characteristics they do not fall
under the requirement of the Tennessee Regulatory Authority for approval of the
merger. Neither would it require the transfer of any Certificate of Public
Convenience and Necessity, should one be held.
Thank you for informing the Authority of the merger.
Sincerely,
/s/ Dennis P. McNamee
Dennis P. McNamee
General Counsel
cc: K. David Waddell, Executive Secretary.
<PAGE>
[LETTERHEAD OF TENNESSEE REGULATORY AUTHORITY]
December 8, 1997
Ms. D. Billye Sanders
Waller Lansden Dortch & Davis
Nashville City Center
511 Union Street, Suite 2100
PO Box 198966
Nashville, TN 37219-8966
Re: Merger of KU Energy Corp. and LG&E Energy Corp.
Dear Ms. Sanders:
This is in response to your letter dated October 21, 1997, which notifies
the Authority of the merger of KU Energy Corp. ("KU Energy") with LG&E Energy
Corp. ("LG&E Energy"). According to your letter, neither KU Energy nor LG&E
Energy have certificates of authority in Tennessee. Also according to your
letter, the respective utility operating companies held by KU Energy and LG&E
Energy will continue to operate separately. Based on these representations,
Authority approval of this merger is not required.
Thank you for informing the Authority of this matter. Please address any
other questions to David Sapper at (615) 741-2904 ext. 155.
Sincerely.
/s/ K. David Waddell
K. David Waddell
Executive Secretary
C: Chris Klein
Dennis McNamee
David Sapper
<PAGE>
[LETTERHEAD OF WALLER LANSDEN DORTCH & DAVIS]
October 21, 1997
Mr. Dennis McNamee
General Counsel
Tennessee Regulatory Authority
460 James Robertson Parkway
Nashville, Tennessee 37243
Re: Merger of KU Energy Corporation ("KU Energy") and LG&E Energy Corp.
-------------------------------------------------------------------
("LG&E Energy")
---------------
Dear Dennis:
The purpose of this letter is to inform the Tennessee Regulatory Authority
("TRA") that KU Energy and LG&E Energy (each is a Kentucky corporation) intend
to merge (the "Merger") and to request confirmation that the Merger does not
require approval by the TRA.
KU Energy is the parent company of Kentucky Utilities Company ("KU"). KU is
an electric utility authorized by the TRA to provide electric service in the
State of Tennessee. KU's primary operations are in the States of Kentucky and
Virginia. LG&E Energy is a holding company which owns Louisville Gas and
Electric Company ("LG&E"). After the Merger, LG&E Energy will be the surviving
holding company and the utility operating companies, KU and LG&E, will not be
merged, but will continue to operate as separate subsidiaries of LG&E Energy.
It is our position that the Merger does not require TRA approval because
neither KU Energy nor LG&E Energy is a public utility within the meaning of
T.C.A. Section 65-4-101. Consequently, T.C.A. Section 65-4-112, the statute that
gives the TRA jurisdiction to approve certain public utility mergers, is not
applicable to the companies in question and thus the Merger is outside the scope
of the TRA's jurisdiction.
Although we are unaware of any statutory requirement to do so, as a matter
of courtesy, we are informing you of the change in control of KU. Pursuant
<PAGE>
Mr. Dennis McNamee
October 21, 1997
Page 2
to your request in our recent telephone conversation regarding the Merger, I am
enclosing a copy of the organizational charts of KU Energy and LG&E Energy prior
to the Merger and a copy of the LG&E organizational chart after the Merger.
I would appreciate written confirmation that the TRA does not have
jurisdiction over the Merger as outlined in this letter and therefore no
approval is required.
We would appreciate your prompt response to this request. Thank you in
advance for your time and attention to this matter.
Sincerely,
/s/ D. Billye Sanders
D. Billye Sanders
DBS:lmb
cc: Walter H. Crouch, Esq.
J. Wade Hendricks, Esq.
<PAGE>
Corporate Structure of
LG&E Energy Corp.
Following Merger
<TABLE>
<CAPTION>
LG&E Energy Corp.
<S> <C> <C> <C> <C> <C>
Lousvill Gas and LG&E Energy Kentucky Utilities KU Capital LG&E Gas
Electric Company Systems Company Corporation Systems Inc.
LG&E Enertech LG&E Power LG&E Home LG&E International Western Kentucky LG&E Natural
Inc. Inc. Services Inc. Inc. Energy Corp. Inc.
LG&E Power LG&E Natural
Development Inc. Marketing Inc.
LG&E Energy
Marketing Inc.
</TABLE>
<PAGE>
[LOGO OF KU ENERGY]
<TABLE>
<CAPTION>
KU ENERGY
CORPORATION
<S> <C> <C> <C> <C> <C> <C> <C>
KENTUCKY UTILITIES KU CAPITAL
COMPANY CORPORATION
(INCLUDING ODP OPERATIONS)
ELECTRIC OHIO VALLEY
ENERGY, INC. ELECTRIC
(20%) CORPORATION
(2 1/2%)
<S> <C> <C> <C> <C> <C> <C> <C>
KUCC KUCC KUCC KUCC KUCC KUCC KUCC KUCC
PARIS FREDERICKSON FERNDALE CLEBURNE PORTLAND 34 34 LTD DEVELOPMENT HEMWEG 8
CORPORATION CORPORATION CORPORATION CORPORATION CORPORATION CORPORATION CORPORATION CORPORATION
</TABLE>
Corporate
------------
Structure
<PAGE>
Current Structure
Major Active Corporations
June 30, 1997
<TABLE>
<CAPTION>
LG&E Energy Corp.
<S> <C> <C> <C> <C> <C>
Louisville Gas and LG&E Energy Systems Inc. LG&E Gas
Electric Company Systems Inc.
LG&E Enertech Inc. LG&E Power Inc. LG&E Home Services Inc. LG&E International Inc. Western Kentucky LG&E Natural Inc.
Energy Corp.
LG&E Power LG&E Natural
Development Inc. Marketing Inc.
LG&E Energy
Marketing Inc.
</TABLE>
<PAGE>
EXHIBIT B
COMMONWEALTH OF KENTUCKY
BEFORE THE PUBLIC SERVICE COMMISSION
In the Matter of:
JOINT APPLICATION OF )
POWERGEN plc, LG&E ENERGY CORP., )
LOUISVILLE GAS AND ELECTRIC COMPANY, ) CASE NO. 2000-095
AND KENTUCKY UTILITIES COMPANY )
FOR APPROVAL OF A MERGER )
JOINT APPLICATION
-----------------
PowerGen plc ("PowerGen"), LG&E Energy Corp. ("LG&E Energy"), Louisville
Gas and Electric Company ("LG&E"), and Kentucky Utilities Company ("KU")
(collectively referred to as "Applicants"), by counsel, hereby petition the
Commission for approval, pursuant to KRS 278.020(4) and (5), of the transfer of
ownership and control of LG&E and KU, all in accordance with the terms of the
Agreement and Plan of Merger dated as of February 27, 2000, between PowerGen and
LG&E Energy ("the Agreement").
I. Introduction
1. Between February 25 and 27, 2000, the Boards of Directors of PowerGen
(acting through a subcommittee on authority granted earlier by the full board)
and LG&E Energy held meetings and approved a merger between LG&E Energy and
Merger Sub (a corporation to be formed and indirectly owned by PowerGen for the
purpose of facilitating the merger) and related transactions. A true copy of the
Agreement is attached as Appendix A to this Application. Under the Agreement,
LG&E Energy will merge with Merger Sub; LG&E Energy will survive the merger;
Merger Sub will cease to exist; LG&E Energy will become an indirect subsidiary
of PowerGen; and LG&E and KU will remain subsidiaries of LG&E Energy. LG&E
Energy will
<PAGE>
consequently have four (4) first tier subsidiaries -- LG&E, KU, LG&E Capital
Corp. and LG&E Energy Marketing, Inc. In addition, to comply with the Public
Utility Holding Company Act of 1935 ("PUHCA"), LG&E Energy Services, Inc. will
become a first tier subsidiary of LG&E Energy, as more fully discussed below.
There will be additional companies between LG&E Energy and PowerGen, each of
which will be organized under the laws of either a member state of the European
Union or a state of the United States. All of the intermediate companies will
be, directly or indirectly, wholly owned by PowerGen and will have no public or
private institutional equity or debt holders. Such structures are typical for
U.K.-U.S. cross-border transactions and will exist primarily for the purpose of
creating an economically efficient and viable structure for completing the
transaction and owning LG&E Energy.
II. Applicants
2. PowerGen is a public limited company formed under the laws of England
and Wales. PowerGen's ordinary shares are traded on the London Stock Exchange,
and its American Depository Receipts are listed on the New York Stock Exchange.
PowerGen is a holding company that was formed in 1998 following a corporate
reorganization that made PowerGen UK plc ("PowerGen UK"), a subsidiary of
PowerGen, the main operating subsidiary of the group. PowerGen is one of the
world's major independent power businesses and, through PowerGen UK, has become
one of the United Kingdom's leading integrated electricity and gas companies.
PowerGen UK was created as a result of the privatization and restructuring of
the electricity industry in England and Wales in 1990. PowerGen, through its
subsidiaries (PowerGen and its subsidiaries sometimes collectively referred to
herein as "PowerGen"), owns and operates nine power stations across England and
Wales with a generating capacity of approximately 10,000 MW, and competes in the
UK's "electricity pool" through which wholesale electric power is
2
<PAGE>
traded. In 1998, PowerGen acquired East Midlands Electricity ("EME"), the third
largest regional electric distribution company in England and Wales, which at
that time supplied some 2.3 million residential and business customers.
PowerGen's retail business now supplies electricity and gas to some 2.6 million
customer accounts and is on target to meet its objective of 5 million by 2002.
PowerGen also conducts trading, shipping and pipeline operations. PowerGen
is the UK's leading developer and operator of combined heat and power plants
(known as cogeneration in the U.S.), is involved in renewable energy ventures,
and is a leading independent power project developer with projects in Europe,
India and the Asian Pacific area.
The mailing address of PowerGen is 53 New Broad Street, London EC2M 1SL,
England. PowerGen is not a public utility in Kentucky as that term is defined by
KRS 278.010(3). Charts showing PowerGen's corporate structure before and after
the merger are attached, respectively, as Appendices B and C to this
Application. PowerGen's Articles of Association and Memorandum of Association
are attached as Appendix D to this Application.
3. LG&E Energy is a corporation organized pursuant to Kentucky law. Its
post office address is 220 West Main Street, Louisville, Kentucky 40202. By
Order dated May 25, 1990, in Case No. 89-374, the Commission approved the
reorganization of LG&E as a regulated subsidiary of LG&E Energy, and determined
that LG&E Energy is not a public utility as defined by KRS 278.010(3). The
record in that case is on file with the Commission and is incorporated by
reference in this Application. In Case No. 97-300, the Commission approved the
merger of KU's then-parent company with and into LG&E Energy with LG&E Energy
being the surviving company. In Case No. 97-300, the Commission again determined
that LG&E Energy is not a public utility as defined by KRS 278.010. The record
in Case No. 97-300 is on file with the
3
<PAGE>
Commission and is incorporated by reference in this Application. Pursuant to 807
KAR 5:001 (S)8(3), a certified copy of LG&E Energy's Articles of Incorporation
is attached as Appendix E to this Application. A chart depicting LG&E Energy's
corporate structure is attached as Appendix F to this Application.
4. LG&E is a Kentucky corporation with the same post office address as LG&E
Energy. LG&E is a utility as defined by KRS 278.010(3)(a) and (b), provides
retail electric service to approximately 360,000 customers and retail gas
service to approximately 290,000 customers in 17 counties in Kentucky, and is
subject to this Commission's jurisdiction as to its retail rates and service. A
certified copy of LG&E's Articles of Incorporation is attached as Appendix G to
this Application.
5. KU is a corporation organized pursuant to Kentucky and Virginia
law. KU's post office address is One Quality Street, Lexington, Kentucky 40507.
KU is a utility as defined by KRS 278.0l0(3)(a), provides retail electric
service to approximately 478,000 customers in 77 counties in Kentucky and five
counties in southwestern Virginia, and is subject to this Commission's
jurisdiction as to its retail rates and service in Kentucky. A certified copy of
KU's Articles of Incorporation is attached as Appendix H to this Application. In
Case No. 97-300, by Order dated September 12, 1997, the Commission approved the
merger of KU's parent company with and into LG&E Energy, with LG&E Energy being
the surviving parent company. As a result of that merger, KU joined LG&E as a
subsidiary of LG&E Energy.
III. The Merger Will Be Made in Accordance with Law
6. The merger will be consummated in accordance with law. LG&E Energy was
incorporated under Kentucky law on November 14, 1989, to become a holding
company for LG&E following the reorganization of LG&E and LG&E Energy. Following
merger with KU's
4
<PAGE>
then-holding company pursuant to the Commission's Order in Case No. 97-300, LG&E
Energy also became KU's holding company. Upon LG&E Energy's merger with Merger
Sub, it is expected that PowerGen and the intermediate companies between
PowerGen and LG&E Energy will become registered public utility holding companies
under the Public Utility Holding Company Act of 1935 ("PUHCA"), and that LG&E
Energy, LG&E and KU will become part of PowerGen's registered holding company
system. KU, by virtue of its ownership of an interest in Electric Energy, Inc.,
will remain a holding company, though exempt from registration under PUHCA.
After the merger, the Commission will have the same ratemaking and regulatory
authority to regulate the rates and services of LG&E and KU as it did before the
Merger. The merger will have no effect on LG&E's or KU's contractual
relationship with or ownership interest in the Ohio Valley Electric Corporation,
and no effect on KU's contractual relationship with or ownership interest in
Electric Energy, Inc. LG&E will continue in existence as a corporation organized
under Kentucky law. KU will continue in existence as a corporation organized
under Kentucky and Virginia law.
7. Both PowerGen and LG&E Energy shareholders must approve the merger.
PowerGen has scheduled its shareholder meeting for June 5, 2000, and LG&E Energy
expects to schedule a shareholder meeting in early June 2000.
8. Performance of the Agreement is subject to a number of other conditions
as well.
It is subject to approval by the Virginia State Corporation Commission, and
such regulatory approval as may be required by the Tennessee Regulatory
Authority.
Applicants must receive approval of the merger from the Federal Energy
Regulatory Commission ("FERC").
5
<PAGE>
Applicants must receive approval by the Securities and Exchange Commission
("SEC"), after which PowerGen and all the intermediate companies expect to
register with the SEC as holding companies under PUHCA. As a result of
provisions in PUCHA, Applicants plan to utilize a service company ("LG&E Energy
Services, Inc.") to provide LG&E and KU with administrative, management and
support services pursuant to a Service Agreement. The Kentucky regulatory
implications of PUHCA registration are discussed below.
A filing under the Hart-Scott-Rodino Antitrust Improvements Act of 1976
will be made, but Applicants do not believe the merger implicates any provision
of the federal antitrust laws.
A filing under the Exon-Florio provisions of the Omnibus Trade and
Competitiveness Act of 1988 will be made, although Applicants do not believe
that the merger will affect national security interests or that any action will
be taken under that statute.
Copies of the final Service Agreement, as well as the other filings noted
herein, will be filed with this Commission when or shortly after they are filed
with the other commissions or agencies.
In addition, PowerGen may be required to make filings or give notice under
the United Kingdom's Electricity Act of 1989, the Fair Trading Act of 1973 and
regulations of the European Community.
Because the Applicants will undergo the aforementioned approvals, the
merger will be in accordance with the law.
IV. Corporate Structure and Regulation Following the Merger
9. After receipt of all necessary regulatory approvals and satisfaction or
waiver of other conditions to the consummation of the transaction, Merger Sub
will merge with LG&E Energy and LG&E Energy will be the surviving Kentucky
corporation. The merger structure is
6
<PAGE>
shown in Appendix I to this Application. After the merger, PowerGen will then
indirectly own 100% of the issued and outstanding stock of LG&E Energy, and LG&E
Energy will own 100% of the common stock of LG&E and KU. The holders of LG&E
Energy common stock will not become holders of PowerGen's ordinary shares, but
each share of LG&E Energy's common stock will be converted into the right to
receive $24.85 cash. The shares held by owners of PowerGen's ordinary shares
will not be converted or exchanged. The preferred stock and debt obligations of
LG&E and KU will not be changed, converted, or otherwise exchanged in the merger
and will continue to be the respective obligations of LG&E and KU following the
merger.
10. Following the merger, LG&E Energy will continue as a separate Kentucky
corporation with two direct operating utility subsidiaries: LG&E and KU. LG&E
will continue its separate corporate existence, operating under the name
"Louisville Gas and Electric Company." KU will continue its separate corporate
existence, operating under the name of "Kentucky Utilities Company."
11. At the time the merger becomes effective, PowerGen will promptly
increase the size of its Board of Directors to allow LG&E Energy's Chief
Executive Officer to be appointed to PowerGen's Board of Directors. LG&E
Energy's Chief Executive Officer shall also continue to serve as Chairman and
Chief Executive Officer of LG&E Energy. Some of the Directors of LG&E Energy at
the effective time of the merger will be invited to serve as members of a U.S.
Advisory Board to provide advice with respect to the operations of LG&E Energy
and its subsidiaries, business and regulatory developments in the United States,
and such other matters as the Advisory Board members, PowerGen, and LG&E Energy
shall mutually agree. Following the merger, LG&E Energy's Board of Directors
shall consist of three members, one of whom
7
<PAGE>
shall be the current Chairman of LG&E Energy prior to the merger. Similar
compositions for the boards of LG&E and KU are expected after the merger. The
respective corporate officers of LG&E and KU shall be entitled to maintain their
current titles and responsibilities as officers of LG&E and KU, respectively,
unless and until otherwise determined by LG&E's Board of Directors and KU's
Board of Directors, respectively.
12. LG&E and KU will continue to function as public utilities subject to
the regulatory jurisdiction of this Commission and, as to KU, the Virginia State
Corporation Commission, and, to the extent required by applicable law, the
Tennessee Regulatory Authority. The FERC will continue to regulate LG&E's and
KU's transmission services and wholesale rates as before the merger. LG&E will
continue to own and operate various non-jurisdictional subsidiaries consistent
with this Commission's approvals in Case No. 89-374, including those
subsidiaries engaged in the lease and operation of the facilities of Big Rivers
Electric Corporation as approved by this Commission in Case Nos. 97-204 and
97-267.
Holding Company Registration Under PUHCA
----------------------------------------
13. PowerGen and the intermediate companies are expected, subject to SEC
approval of the merger, to register as holding companies under PUHCA. As
registered holding companies, they will be subject to various statutory and
administrative requirements under PUHCA. The SEC has jurisdiction over
registered holding companies and, among other things, places certain
restrictions on affiliate transactions including the holding companies' ability
to provide services to the utility operating subsidiaries, and the allocation of
costs to and from utility operating companies within the holding company
structure. As part of the merger approval under PURCA, the SEC will review the
Applicants' non-utility operations, LG&E's continued operation as a combined gas
and electric company and the corporate structure
8
<PAGE>
proposed for the merged company. Further, the SEC will request certification
from state regulatory commissions confirming that they have the authority and
resources to protect ratepayers within their jurisdiction and intend to exercise
their authority.
14. The Applicants will request that the SEC approve the continued
operation of LG&E as a combination electric and gas utility. In the SEC filing,
the Applicants will demonstrate that continued operation by LG&E as a
combination electric and gas utility is in the public interest. The loss of the
ability to operate as a combination utility would result in higher costs for
both electric and natural gas service because the economies of shared services
and resources would be lost. Applicants will submit to the Commission a copy of
the SEC filing on this issue once it is available. The SEC will consider the
preference of this Commission when considering whether to allow continued,
combined operations. Applicants request that the Commission include in its Order
approving the merger a finding that it is in the public interest for LG&E to
remain a combination electric and gas utility.
15. Registration under PURCA will also impose a number of restrictions on
the operations of PowerGen and its subsidiary companies that are not Foreign
Utility Companies ("FUCOs") as defined by Section 33 of PUHCA. These
restrictions include a requirement that the SEC approve in advance securities
issuances, sales and acquisitions of utility assets. and acquisitions of other
businesses. In addition, PURCA limits the ability of registered holding
companies and their subsidiaries to engage in various businesses. Generally
stated, PUHCA limits a holding company's activities to utility operations,
activities needed to support utility operations. energy related businesses, and
telecommunications.
16. PURCA prohibits registered holding companies from providing services to
operating utility subsidiaries for a fee, and further greatly restricts
operating companies from
9
<PAGE>
providing services directly to each other. Consequently, LG&E Energy Services,
Inc. will be formed as a service company subsidiary to LG&E Energy to provide
centralized administrative and corporate services. The SEC will then regulate
the provision of services and allocation of costs from LG&E Energy Services,
Inc. to LG&E and to KU to ensure that appropriate measures are used. Customers
will experience no change in utility service due to the establishment of LG&E
Energy Services, Inc. Services will be provided pursuant to the provisions of a
Service Agreement between LG&E, KU and LG&E Energy Services, Inc. A draft copy
of the Service Agreement is attached as Appendix J. The Service Agreement is not
yet finalized, and will be subject to SEC approval when filed. However, a copy
of the proposed Service Agreement will be provided to the Commission when filed
with the SEC, and an additional copy will be provided to the Commission when
approved by the SEC.
17. The SEC will have regulatory authority regarding the governance of LG&E
Energy Services, Inc. and the allocation of costs to the operating utilities.
The SEC regulations are designed to ensure that the activities performed by the
service company are "necessary or appropriate in the public utility interest or
for the protection of investors or consumers and to insure that such [services]
are performed economically and efficiently for the benefit of such associated
companies at cost, fairly and equitably allocated among such companies." 15
U.S.C. (S)79m(b). Applicants believe that the proposed corporate structure and
PURCA registration would not have a negative effect upon the ability of the
Commission to regulate LG&E and KU. Accounting for service company costs will
comply with the SEC's Uniform System of Accounts for Mutual Service Companies
and Subsidiary Service Companies under PURCA, which for all practical purposes
is identical to the FERO Uniform System of Accounts. Costs will either be
directly assigned to the benefiting subsidiary or allocated using allocation
methods approved by
10
<PAGE>
the SEC. Applicants believe that the Commission can be assured that costs are
allocated between regulated and unregulated subsidiaries, and between utility
operating companies, in an appropriate manner with no adverse consequences to
utility customers. In addition, the SEC will have audit authority over all
transactions between LG&E Energy Services, Inc. and the operating companies
(LG&E and KU) and has historically invited both FERC and state regulatory
commissions to participate in this process. Consequently, this Commission can
participate in future SEC proceedings. Applicants also agree to permit the
Commission reasonable access to the books and records of not only LG&E Energy
and its subsidiaries, but to PowerGen and the intermediate companies, consistent
with the exercise of the Commission's jurisdiction and authority.
18. The merger will not alter the authority of the Commission to regulate
LG&E's and KU's utility operations. LG&E and KU will continue to be public
utilities under and subject to the Commission's jurisdiction. The merger and
subsequent holding company registrations will not prevent the Commission or FERC
from reviewing the books and records of either LG&E and KU or of their
non-utility affiliates or parents and the companies will provide access to their
personnel as well. After the merger, the Commission shall have the same
ratemaking and regulatory authority to regulate the rates and services of LG&E
and KU as it did before the merger. Furthermore, Applicants commit that they
will not assert that the SEC's jurisdiction legally preempts the Commission from
disallowing recovery in retail rates of the cost of goods and services that LG&E
or KU obtain from LG&E Energy Services, Inc., provided that LG&E and KU
otherwise retain the right to assert that the charges are reasonable and
appropriate.
19. Section 33(a)(2) of PUHCA (15 U.S.C.(S)79z-5b) provides, inter alia,
----------
that certain exemptions from its provisions afforded PowerGen UK and EME,
foreign utility companies, are
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not applicable unless every State commission having jurisdiction over the retail
electric rates of a public utility company that is an affiliate of PowerGen UK
and EME has certified to the SEC that it has the authority and resources to
protect ratepayers subject to its jurisdiction and that it intends to exercise
its authority.
20. Upon approval of the proposed merger, Applicants request that this
Commission certify to the SEC pursuant to Section 33(a)(2) of PUHCA that this
Commission has the authority and resources to protect LG&E's and KU's ratepayers
subject to its jurisdiction and that it intends to exercise its authority.
V. The Merger Is for a Proper Purpose
21. The purpose of the merger is to make LG&E Energy part of a much larger
enterprise well-positioned to serve customers given accelerating changes in the
energy industry across the world, while maintaining the historic connections
between both LG&E and KU and the communities they serve. The merger is critical
for ensuring that both LG&E and KU remain able to continue to meet their
commitments to their customers, to their communities and to the Commonwealth as
a whole.
22. Applicants recognize that the energy industry across the world has
entered a period of accelerating evolution, continuing deregulation and
regulatory change and increased competition. In this environment, size and
scale have become critical and necessary prerequisites to success. The merger
will result in sharing the best practices to provide the best possible service
to customers at the lowest cost. By becoming part of a larger entity with
greater resources, LG&E and KU will be better able to utilize new, economically
beneficial developments in transmission and distribution technology, information
systems, and capital markets. The Earnings Sharing Mechanism that has been
established by the Commission for
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LG&E and KU provides the ideal means of providing customers with a share of any
benefits or cost reductions that may result from these efficiencies. Moreover,
because PowerGen's existing utility operations are outside the U.S., there will
be no increase in market concentration at either the wholesale or retail levels.
23. PowerGen's experience in the UK and elsewhere will also benefit
Kentucky consumers as the energy market evolves. In the past decade, the UK's
electricity and gas markets have been restructured as the industry has evolved
from a state owned monopoly to private ownership and competition. The solutions
reached in industry restructuring in the UK are themselves still evolving and
cannot be simplistically transplanted into the U.S. market. However, PowerGen's
experience and expertise will be important in advancing LG&E's and KU's efforts
in the competitive wholesale market, as well as in preparing LG&E and KU for
restructuring and in helping to ensure they are prepared to compete and serve
their customers well when retail restructuring occurs.
24. The merger brings benefits to customers, employees of LG&E Energy and
its subsidiaries, the Commonwealth as a whole and LG&E Energy's shareholders (a
majority of whom are residents of Kentucky).
After the merger, LG&E and KU will have the financial, technical, and
managerial capabilities that are needed to provide efficient customer service to
their utility customers. Customers will be better off as a result of this
transaction and may benefit from improved service quality and operating
efficiency resulting from reciprocal adoption of best practices. For employees,
the merger represents an opportunity for growth as Kentucky becomes the U.S.
base of operations for a large international entity. The transaction ensures
that LG&E Energy and its employees remain at the forefront of an increasingly
competitive U.S. electric industry, while
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foreign operations provide opportunities for LG&E Energy employees abroad. For
Kentucky, the merger ensures that utility operations in Kentucky will remain
headquartered in Kentucky, and that Kentucky will be the base for PowerGen's
other anticipated U.S. operations. LG&E Energy's shareholders will receive a 58%
premium over the trading price for their shares as of the last trading day
before announcement of the merger.
25. PowerGen is firmly committed to maintaining and supporting the
relationships between LG&E and KU and the communities they serve. Following the
merger, KU will continue to maintain its headquarters in Lexington, Kentucky,
and LG&E will continue to maintain its headquarters in Louisville, Kentucky.
26. The merger will enable LG&E and KU to become part of a merged entity
with the size, resources, scale, and the experience to succeed in the rapidly
evolving energy industry. Though part of a larger entity, LG&E and KU will
continue to be regulated utilities subject to this Commission's jurisdiction
with a continuing focus on serving their customers. The merger thus serves the
interests of LG&E's and KU's customers, their communities and of the
Commonwealth as a whole, and is therefore for a proper purpose.
VI. Following the Merger, LG&E and KU Will Have Abilities to Provide Reasonable
Service
27. Following the merger, the customers of LG&E and KU will continue to
receive the same high-quality energy services and do business with their
respective utilities as before the merger. PowerGen has the same level of
commitment to high quality services that LG&E Energy has, and will fully support
maintaining the LG&E and KU track record for service. As a result, LG&E and KU
will continue to be highly responsive to customer needs. LG&E will remain in
Louisville, Kentucky, and will maintain a substantial presence in Louisville and
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LG&E's service territory. KU's headquarters will remain in Lexington, Kentucky,
and KU will maintain a substantial presence throughout its service territory in
order to conduct its statewide operations. LG&E and KU will continue to operate
through regional offices with local service personnel and line crews available
to respond to customers' needs.
28. LG&E and KU will continue as direct subsidiaries of LG&E Energy and
will continue to have the financial, technical, and managerial abilities
required to provide high-quality, reliable service consistent with their
statutory obligation to provide reasonable service.
(a) Financial Abilities
29. Following the merger, LG&E and KU intend to continue to maintain their
balanced capital structure. PowerGen has in place bank facilities to finance the
acquisition of LG&E Energy's common stock. PowerGen may also dispose of certain
of its existing assets or some of LG&E Energy's (other than Kentucky
jurisdictional) assets as part of its overall plan to refocus its strategic
direction. Neither LG&E Energy nor any of LG&E Energy's subsidiaries, including
LG&E and KU, will incur any additional indebtedness or issue any securities to
finance any part of the purchase price paid by PowerGen for the LG&E Energy
stock.
PowerGen's Board of Directors does not intend to allow dividend policy to
affect adversely the financial integrity or rates of either LG&E and KU after
the merger. Both utilities will also benefit from PowerGen's enhanced ability to
attract capital at reasonable rates and PowerGen's sustained ability to maintain
already-strong mortgage bonds and investment grade credit ratings. If for any
reason PowerGen is unable to provide needed capital, both LG&E and KU will have
the ability in the future to seek alternative funding, subject to necessary
regulatory approval. PowerGen assures the Commission that no cross guarantees of
debt will be in place between the utilities and PowerGen or non-utility
affiliates of PowerGen. LG&E and KU will
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provide financing for PowerGen's investments only through payment of dividends
from shareholder-owned funds and will not guarantee the credit of any affiliates
without Commission approval. Neither LG&E Energy nor any of LG&E's subsidiaries,
including LG&E and KU, will borrow or issue any security, incur any debt or
pledge any assets to finance any part of the purchase price for LG&E Energy's
shares. PowerGen represents and agrees that the costs of the purchase of LG&E
Energy's shares shall be excluded from the cost of service and rates of LG&E and
KU.
(b) Technical and Managerial Abilities
30. LG&E and KU will continue to operate through regional offices with
local service personnel and field crews available to respond to customers' needs
and personnel necessary to operate and dispatch their existing systems. The
post-merger management of LG&E Energy is expected to include the existing
management of LG&E Energy, LG&E and KU.
LG&E and KU will continue to be able to draw on the larger and more diverse
managerial and employee pool that resulted from the merger approved by this
Commission in Case No. 97-300. In addition, because both utilities will be part
of a much larger entity with a more prominent international position, both
should be better able to attract and retain the most qualified job applicants
and employees. As part of the larger global entity, employees should also
benefit from new and wider career opportunities. PowerGen is one of the UK's
largest generating companies, and owns the UK's third largest regional electric
distribution company. Moreover, PowerGen has, over the last decade, transitioned
from a government owned monopoly to a participant in a competitive marketplace.
This experience and expertise will be available to LG&E and KU as the U.S.
market restructures and evolves. Neither LG&E nor KU will serve as an employer
of last resort for employees, assets, or products associated with failed
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or troubled non-utility affiliate ventures of either PowerGen or LG&E Energy. As
a result of the merger, the management of LG&E and KU stand to be strengthened
and will not suffer a diversion of valuable management resources.
31. Following the consummation of the merger, LG&E Energy's Board of
Directors will consist of three persons, one of whom will be the current
Chairman. Some of the existing Directors of LG&E Energy will be invited to serve
as members of a U. S. Advisory Board to provide advice with respect to
operations of LG&E Energy and its subsidiaries' businesses, regulatory
developments in the United States generally, and such other matters upon which
the members of the Advisory Board, PowerGen, and LG&E Energy shall mutually
agree. The current Chairman and CEO of LG&E Energy will become a member of
PowerGen's Board of Directors and will continue as Chairman and Chief Executive
Officer of LG&E Energy.
32. The merger preserves the heritage of the relationship that LG&E, KU and
the Commonwealth have built, and continues the charitable/civic/education
process that is of critical importance to the Commonwealth. After the effective
date of the merger, PowerGen has agreed to make, or to cause LG&E and KU
(through the LG&E Energy Foundation or otherwise) to continue to make, annual
charitable and community contributions to the communities they serve, and
otherwise maintain a substantial level of involvement in community activities in
the Commonwealth comparable to or greater than normal annual aggregate levels of
charitable contributions, community development, and related activities carried
on by LG&E and KU prior to the date of the merger. PowerGen acknowledges that
the primary purpose of the LG&E Energy Foundation is to support charitable
causes in LG&E's and KU's service territories, and shall cause and ensure that,
following the merger, it continues to support charitable causes in such service
territories. The Foundation will remain under the control of the Board of
Directors
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of LG&E Energy, and the Foundation's Board of Directors will consist, in
majority, of employees knowledgeable of community interests within the service
territories of LG&E and KU.
33. LG&E and KU will continue to support economic development within the
communities they serve and throughout the Commonwealth. Each currently works
closely with state and local economic development agencies to attract and retain
businesses and jobs in the Commonwealth. After the merger, LG&E and KU will not
only continue these activities, but, because they will be part of a larger
global operation, will have broader contacts worldwide and be better able to
both attract economic development to the Commonwealth and strengthen existing
relationships. For example, Toyota is not only one of KU's largest customers,
but one of PowerGen's customers as well. This increased worldwide presence and
increased connection will enhance their economic development efforts, as well as
those of the Commonwealth.
(c) Utility Accounts and Affiliate Transactions
34. Following consummation of the merger, LG&E and KU will continue to
operate as public utilities, will keep their respective books and records, will
make accounting entries according to the Uniform System of Accounts (LG&E Energy
Services, Inc.'s costs will comply with the SEC's essentially identical system),
and will render appropriate reports in the same manner as they do now. Payment
for the LG&E Energy shares will be recorded in PowerGen's books, not those of
LG&E Energy or its subsidiaries, which will neither incur debt nor issue equity
to fund the purchase of shares. After the merger, LG&E Energy, LG&E, and KU also
will continue to adhere to the applicable conditions described in the
Commission's orders in Case Nos. 89-374, 10296, and 97-300, including but not
limited to, reporting requirements, and
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access to the books and records of other affiliates and subsidiaries engaged in
transactions with LG&E and KU.
VII. The Merger Is Consistent with the Public Interest
35. The merger is consistent with the public interest. As indirect
subsidiaries of PowerGen, LG&E and KU will be part of a larger, stronger entity
with an international presence. They will be better able to withstand the impact
of increased competition and industry change, and better able to ensure that
their customers continue to receive the benefits flowing from their combined
operation. The operation of LG&E Energy as a wholly owned, indirect subsidiary
of PowerGen is essential to preserve the strength and stability of LG&E Energy
and its utility subsidiaries at a time of increasing change and competition. The
merger will preserve the benefits currently provided to customers and is
consistent with the public interest. The merger will not detract from the
benefits customers currently receive as a result of the merger approved in Case
No. 97-300, including LG&E's and KU's merger surcredits, and the merger dispatch
savings and lower fuel costs distributed through LG&E's and KU's fuel adjustment
clauses. The merger will have no impact on LG&E's and KU's commitment to operate
under the Earnings Sharing Mechanism tariffs. Indeed, the framework created by
the Earning Sharings Mechanism provides a balanced approach to regulation within
the Commonwealth.
VIII. Testimony and Exhibits
36. The Application is supported by appendices to this application. E.A.
Wallis, Chairman and Chief Executive of PowerGen, and Roger W. Hale, Chairman
and Chief Executive Officer of LG&E Energy have filed testimony regarding the
purpose of the merger and the managerial abilities of PowerGen, LG&E Energy,
LG&E and KU after the merger. Testimony by Caroline A. Sheers, Director of
Mergers and Acquisitions of PowerGen, describes
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PowerGen's financial ability to consummate the transaction, the financial
strength of the merged company after the transaction and the potential for
achieving efficiencies. Testimony by Michael D. Robinson, Vice President and
Controller of LG&E Energy, addresses the accounting issues following the merger.
Testimony by Dr. Karl McDermott, Vice President of National Economic Research
Associates, Inc., addresses criteria assessing whether a merger or acquisition
is in the public interest, and applies those criteria to the acquisition of LG&E
Energy by PowerGen. Dr. Donald J. Mullineaux, Director of the School of
Management at the Gatton College of Business and Economics at the University of
Kentucky addresses whether the acquisition is in the interest of the
Commonwealth and its citizens and discusses the benefits flowing from the
acquisition. Testimony by Robert M. Hewett, Group Executive of Regulatory
Affairs of LG&E and KU, addresses regulatory issues and the technical and
managerial capability LG&E and KU will have following the merger. The verified
testimony of the above listed witnesses is attached as Appendix K to this
Application.
WHEREFORE, Applicants request that the Commission, after hearing, enter a
final order as follows:
1. Finding that, after the acquisition of ownership and control of LG&E
Energy Corp. by PowerGen pursuant to the merger, Louisville Gas and Electric
Company and Kentucky Utilities Company will continue to have the financial,
technical, and managerial abilities necessary to provide reasonable service to
their respective customers, and that the transfer of ownership and acquisition
of control of Louisville Gas and Electric Company and Kentucky Utilities Company
is in accordance with law, for a proper purpose, and consistent with the public
interest pursuant to KRS 278.020;
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2. Approving the transfer of ownership of Louisville Gas and Electric
Company and Kentucky Utilities Company through the acquisition of ownership and
control of LG&E Energy Corp. by PowerGen upon the merger of Merger Sub into LG&E
Energy Corp. pursuant to KRS 278.020(4) and (5);
3. Determining that neither LG&E Energy Corp. nor PowerGen or any
intermediate company between LG&E Energy Corp. and PowerGen will, by reason of
ownership of all outstanding shares of common stock of LG&E Energy Corp., which
in turn owns all outstanding common shares of Louisville Gas and Electric
Company and Kentucky Utilities Company, be a utility in Kentucky as defined in
KRS 278.010(3) as they will not own, operate, or manage any facilities used in
connection with the generation, production, transmission, and distribution of
electricity to or for the public for compensation or own, operate, or manage any
facility used in connection with the production, manufacture, storage,
distribution, sale, or furnishing of natural or manufactured gas to or for the
public, for compensation for light, heat, power or other uses; and
4. Finding that it is in the public interest for LG&E to remain a
combination gas and electric utility following consummation of the merger
5. Applicants further request that the Commission certify to the SEC under
Section 33(a)(2) of PUHCA that this Commission has the authority and resources
to protect the ratepayers of LG&E and KU subject to its jurisdiction and it
intends to exercise its authority.
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March 15, 2000 /s/ David Jackson
------------------------------------
David Jackson
General Counsel & Company Secretary
PowerGen plc
53 New Broad Street
London, EC2 1SL
/s/ John R. McCall
------------------------------------
John R. McCall,
Executive Vice President
General Counsel and
Corporate Secretary
Michael S. Beer
Senior Corporate Attorney
LG&E Energy Corp.
220 West Main Street
Louisville, Kentucky 40202
/s/ Richard F. Newell
------------------------------------
Richard F. Newell
Kendrick R. Riggs
J. Wade Hendricks
Ann E. Eberle
Maureen M. Carr
OGDEN NEWELL & WELCH
1700 Citizens Plaza
500 West Jefferson Street
Louisville, Kentucky 40202
<PAGE>
CERTIFICATE OF SERVICE
----------------------
This is to certify that, on March 15, 2000, a copy of the foregoing was
filed with the Public Service Commission of Kentucky by hand delivery and sent
by overnight courier or mail, postage-prepaid to:
Hon. Elizabeth E. Blackford
Hon. Dennis G. Howard, II
Assistant Attorneys General
Office for Rate Intervention
1024 Capital Center Drive
Frankfort, KY 40602
Hon. David F. Boehm
Hon. Michael L. Kurtz
Boehm, Kurtz & Lowry
2110 CBLD Center
36 East Seventh Street
Cincinnati, OH 45202
Hon. Carol Raskin
Legal Aid Society. Inc.
425 West Muhammad Ali Boulevard
Louisville, KY 40202
Hon. David A. McCormick
General Attorney
Office of The Judge Advocate General
Department of the Army
(DAJA-RL 3970)
901 N. Stuart Street Rm 713
Arlington. VA 22203-1837
Hon. Richard G. Raff
Staff Counsel
Public Service Commission
211 Sower Blvd.
Frankfort KY 40601
Hon. Don Meade
Counsel for IBEW, Local 2100
Miller & Meade, P.S.C.
802 Republic Bldg.
429 W. Muhammad Ali Blvd.
Louisville, KY 40202
Hon. Edward W. Gardner
Hon. Michael Keith Horn
Department of Law
200 East Main Street
Lexington, KY 40507
Mr. Jack E. Burch
Executive Director
Community Action Council
892 Georgetown Street
P.O. Box 11610
Lexington, KY 40576
Hon. Anthony G. Martin
Attorney at Law
325 Henry Clay Blvd.
Lexington, KY 40502
Hon. Joe F. Childers
Kentucky Association for
Community Action
201 West Short Street, Suite 310
Lexington, KY 40507
Hon. W. Henry Graddy, IV
W. H. Graddy & Associates
Kentucky Resources Council
103 Railroad Street
P.O. Box 4307
Midway, KY 40347
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<PAGE>
Hon. Mark W. Dobbins
Tilford, Dobbins, Alexander
Buckaway & Black
1400 One Riverfront Plaza
Louisville, KY 40202
Hon. Walker C. Cunningham, Jr.
Jefferson County Attorney
Suite 688, Starks Building
Louisville, KY 40202
Hon. Iris Skidmore
Hon. Ronald P. Mills
Counsel for NREPC
Office of Legal Services
Capital Plaza Tower, 5th Floor
Frankfort, KY 40601
Mr. John M. Stapleton
Director Division of Energy
663 Teton Trail
Frankfort, KY 40601
Michael S. Beer
Senior Corporate Attorney
LG&E Energy Corp.
220 West Main Street
Louisville, KY 40202
Mr. Kip Bowmar
Executive Director
Kentucky Association for
Community Action
900 Wilkinson Blvd.
Frankfort, KY 40601
Mr. Robert L. Madison
5407 Baywood Drive
Louisville, KY 40241-1318
Mr. Tom FitzGerald
Kentucky Resources Council, Inc.
P.O. Box 1070
Frankfort, KY 40602
Hon. John D. Myles
Attorney for KAPHCC
413 Sixth Street
Shelbyville, KY 40065
Mr. Robert M. Hewett
Group Executive-Regulatory Affairs
Kentucky Utilities Company
One Quality Street
Lexington, KY 40507
Hon. James M. Miller
Sullivan, Mountjoy, Stainback
and Miller, P.S.C.
100 St. Ann Building
P.0. Box 727
Owensboro, KY 42302-0727
Hon. Douglas L. Beresford
Hon. George F. Hobday, Jr.
LONG ALDRIDGE & NORMAN, LLP
701 Pennsylvania Avenue. N.W.
Suite 600
Washington, DC 20004
/s/ Kendrick R. Riggs
---------------------------------------
Counsel for PowerGen, LG&E Energy,
Louisville Gas and Electric Company and
Kentucky Utilities Company
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Exhibit C
See LG&E Energy Corporate Charts (filed on paper format on Form SE on April 26,
2000, File No. 70-9671).
<PAGE>
EXHIBIT D
See Powergen plc Corporate Chart filed as Exhibit F-1.1 to Powergen plc's Form
U-1 filed April 26, 2000, File No. 70-9671, and incorporated by reference
herein.
See Description of the Companies in the Powergen System, filed as Exhibit F-1.2
to Powergen plc's Form U-1 filed April 26, 2000, File No. 70-9671, and
incorporated by reference herein.
<PAGE>
Exhibit E
See Combined Powergen/LG&E Energy Corporate Chart filed as Exhibit F-3.1 to
Powergen plc's Form U-1 filed April 26, 2000, File No. 70-9671, and incorporated
by reference herein.
