File No. 70-8617
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
AMENDMENT No. 2
to
FORM U-1
APPLICATION-DECLARATION WITH RESPECT TO
PARTICIPATION BY
EUA ENERGY INVESTMENT CORPORATION
IN A JOINT VENTURE TO DEVELOP AND COMMERCIALIZE
A BIOMASS-FIRED COMBUSTION TURBINE POWER GENERATION FACILITY
UNDER
THE PUBLIC UTILITY HOLDING COMPANY ACT OF 1935
EUA ENERGY INVESTMENT CORPORATION
P.O. Box 2333, Boston, Massachusetts 02107
(Name of companies filing this statement
and address of principal executive office)
EASTERN UTILITIES ASSOCIATES
(Name of top registered holding company
parent of applicant or declarant)
CLIFFORD J. HEBERT, JR., TREASURER
EASTERN UTILITIES ASSOCIATES
P.O. Box 2333, Boston, Massachusetts 02107
(Name and address of agent for service)
The Commission is requested to mail signed copies
of all orders, notices and communications to:
ARTHUR I. ANDERSON, P.C.
McDermott, Will & Emery
75 State Street
Boston, Massachusetts 02109
This Amendment No. 2 to the Application-Declaration on Form U-1 filed April
27, 1995, as amended by Amendment No. 1 dated May 17, 1995, hereby amends
said Application-Declaration as follows:
1. The following sentence is hereby added to the end of Paragraph II.F of
Item 1:
Notwithstanding the foregoing, EEIC shall have no obligation to make
any working capital line of credit available to the BIOTEN Partnership in
the event that EEIC elects not to make the Increased Participation
Contribution.
2. The following new paragraph II.G is hereby added to Item 1:
G. Investment Considerations. In making its decision to invest in the
proposed BIOTEN Partnership, EEIC has assumed the following:
(1) EEIC's sales forecast for the BIOTEN Partnership was derived in
part from a business analysis prepared in 1993 by UI-USA, Inc., a
member of BIOTEN, in connection with a then proposed private
placement offering intended to raise sufficient funds to complete
the research and development of the precursor to the biomass-
fired combustion turbine generator system currently being
developed by the members of BIOTEN. (The private placement
offering was obviated by EEIC's agreement to provide research and
development funding pursuant to the Research and Development
Agreement set forth as Exhibit B-1 to the Application-
Declaration.) EEIC's projected unit sales are more conservative
than those originally assumed by UI-USA.
(2) EEIC's projection of the revenues of the proposed BIOTEN
Partnership is based upon the following assumptions:
(a) Based on EEIC's and BIOTEN's experience with the
construction of the commercial prototype plant, EEIC
assumes an eight-month period for assembly and delivery
of a sold unit.
(b) Revenues from the sale of electricity generated by the
commercial prototype plant are forecasted based upon
the Tennessee Valley Authority's avoided cost data of
approximately $.02 per Kwhr.
(c) Because the commercial prototype plant will be a test
facility, it will have "down time" for performance
testing, fuel testing, equipment changes, etc.
Therefore, EEIC's projected revenues from the sale of
electricity by the commercial prototype plant do not
include any profits to the BIOTEN Partnership.
(3) In making its investment decision, EEIC has also relied on
information (i) it has gathered from interviews with prospective
customers, (ii) from the U.S. Department of Energy's Regional
Biomass Energy Programs, and (iii) from the Tennessee Valley
Authority's Biomass Program regarding market demand for sawdust
disposal, environmental regulations prohibiting the dumping of
solid waste of a biomass nature in landfill dumping grounds, and
changes affecting the market for biomass disposal.
EEIC believes that the commercial prototype unit has been designed to
be an efficient means of biomass and sawdust disposal, appropriately sized
to handle the disposal needs of the areas in which units are likely to be
located without raising prohibitively expensive transportation and supply
problems.
3. Paragraph IV.C is hereby amended and restated to read as follows:
C. Services Provided By System Companies. The BIOTEN Partnership
will have its own employees, including employees of BIOTEN and BIOTEN
Operations who may enter into employment agreements with the BIOTEN
Partnership, and others as necessary. Any activities that EEIC needs to
perform under the Agreement to Form Joint Venture or the Partnership
Agreement would be accomplished by employees of EUA Service and, in the
case of one engineer with extensive experience with cogeneration
facilities, by EUA Cogenex Corporation. EUA Service may provide management
services including but not limited to financial, accounting, engineering
design and review, construction management, data processing and records
management services, as appropriate, to the BIOTEN Partnership. All such
services (including the services of the EUA Cogenex Corporation engineer)
would be rendered at cost; the services provided by EUA Service employees
would be rendered pursuant to the standard Service Contract entered into
between EUA Service and the other EUA System companies, a copy of which is
attached hereto as Exhibit B-3. With the exception of the services of the
EUA Cogenex Corporation engineer mentioned above, no EUA System company
other than EUA Service will provide services to the BIOTEN Partnership, and
no employees of the EUA System's retail electric utilities will be assigned
to any activities involving the BIOTEN Partnership. The Applicant does not
anticipate the need to hire any additional personnel in connection with
EEIC's participation in the BIOTEN Partnership.
4. Section (1) of Paragraph IV.D of Item 1 is hereby amended to read as
follows:
(1) A description of the BIOTEN Partnership's operations and sales, if
any, for the quarter reporting;
5. Item 2 is hereby amended and restated in its entirety to read as
follows:
ITEM 2. FEES, COMMISSIONS, AND EXPENSES.
The fees, commissions and expenses of the Applicants expected to be
paid or incurred, directly or indirectly, in connection with the
transaction described above are estimated as follows:
Securities and Exchange Commission Fees $ 2,000
EUA System companies' fees and expenses $110,000
Legal Fees $225,000
Miscellaneous $ 3,000
TOTAL $340,000
6. The last entry of Item 3 is hereby amended and restated to read as
follows:
ITEM 3. APPLICABLE STATUTORY PROVISIONS.
Performance of services by Section 13(b); Rules
EUA Service Corp. and by EUA 87(b)(1), 90 and 91.
Cogenex Corporation for the
BIOTEN Partnership.
7. Item 6 is hereby amended and restated in its entirety to read as
follows:
ITEM 6. EXHIBITS AND FINANCIAL STATEMENTS
(* Filed herewith.)
(** Filed simultaneously herewith; confidential
treatment requested.)
(a) Exhibits.
Exhibit A-1 Form of Articles of Organization of the
EEIC Subsidiary (previously filed)
Exhibit A-2 Form of By-Laws of the EEIC Subsidiary
(previously filed)
Exhibit A-3 Form of 1995 Agreement of General
Partnership of BIOTEN General
Partnership (filed pursuant to
confidential treatment request)
Exhibit B-1 Research and Development Agreement dated
December 9, 1994, as amended by
Amendment No. 1 in the form attached
hereto (filed pursuant to confidential
treatment request)
Exhibit B-2 Form of 1995 Agreement to Form Joint
Venture (filed pursuant to confidential
treatment request)
Exhibit B-3 Form of Service Agreement between EUA
BIOTEN, Inc. and EUA Service Corporation
(filed pursuant to confidential
treatment request)
* Exhibit F Opinion of Counsel
Exhibit H Proposed Form of Notice (previously
filed)
(b) Financial Statements.
** b-1 Financial Projections for BIOTEN General
Partnership (1995-2000) and Notes
Thereto
b-2 Financial Statements of EUA Energy
Investment Corporation for the period
ended March 31, 1995 (filed with Rule 24
Certificate dated June 9, 1995, File No.
70-7426)
SIGNATURE
Pursuant to the requirements of the Public Utility Holding Company Act
of 1935, the undersigned Applicant has duly caused this statement to be
signed on its behalf by the undersigned duly authorized individual.
EUA ENERGY INVESTMENT CORPORATION
By: /s/Clifford J. Hebert, Jr.
Clifford J. Hebert, Jr.
Treasurer
Dated: June 19, 1995
Exhibit F
[FORM OF MCDERMOTT, WILL & EMERY OPINION]
__________ __, 1995
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington D.C. 20549
Re: File No. 70-8617 -- EUA Energy Investment Corporation
Application-Declaration with Respect to Participation
in a Joint Venture to Develop and Commercialize A
Biomass-Fired Combustion Turbine Power Generation
Facility
Ladies and Gentlemen:
As counsel for EUA Energy Investment Corporation ("EEIC"),
we are furnishing this opinion to be used in connection with the
application-declaration on Form U-1 under the Public Utility
Holding Company Act of 1935 (the "Act") filed by EEIC with the
Securities and Exchange Commission (the "Commission") on April
27, 1995, as amended, File No. 70-8617, (the "Application-
Declaration"). In the Application-Declaration, EEIC requests
Commission authorization to participate in and to provide
financing to a joint venture general partnership to be organized
under Tennessee law ("BIOTEN") in order to develop and
commercialize biomass-fired combustion turbine power generation
facilities and any product and/or service offered in connection
with such facilities, and to form a new wholly owned subsidiary
(the "EEIC Subsidiary") to participate as a general partner
thereof. EEIC requests authorization to contribute to the EEIC
Subsidiary certain proprietary materials (the "Proprietary
Materials") to be developed by and on behalf of EEIC and certain
contract rights under, and equipment purchased pursuant to, an
Option Agreement by and between EEIC and Page Turbines
International, Inc. for the purchase of LM 1500 turbine engines
in exchange for all of the issued and outstanding capital stock
of the EEIC Subsidiary.
In connection with the formation of BIOTEN and the
development and operation of a commercial prototype plant and
commercial units modeled thereon, EEIC, for itself and for the
proposed EEIC Subsidiary, requests authorization for the EEIC
Subsidiary to contribute the aforementioned Proprietary
Materials, contract rights and equipment to BIOTEN in exchange
for a general partner interest therein. EEIC also requests
Commission authorization (i) to make capital contributions to
BIOTEN, from time to time through the period ending December 31,
1998, in an aggregate total amount of up to $3,907,000 to fund
BIOTEN's working capital needs and (ii) to make loans and
advances to BIOTEN, from time to time through the period ending
December 31, 1998, in an aggregate amount not to exceed
$3,000,000.
It is our opinion, subject to the assumptions hereinafter
stated, that in the event the transactions for which EEIC has
requested authorization as described above (the "Proposed
Transactions") are consummated in accordance with the
Application-Declaration as amended:
All Massachusetts state laws applicable to the
Proposed Transactions will have been complied with by EEIC and,
upon its formation, by the EEIC Subsidiary.
Each of EEIC and the EEIC Subsidiary is or will be a
validly organized and duly existing corporation under the laws of
The Commonwealth of Massachusetts. Upon issuance, the capital
stock of the EEIC Subsidiary will be validly issued, fully paid
and nonassessable, EEIC will be entitled to the rights and
privileges appertaining thereto set forth in the Articles of
Organization of the EEIC Subsidiary, and EEIC will have legally
acquired the capital stock of the EEIC Subsidiary.
(c) Upon due execution and delivery of the BIOTEN
Partnership Agreement and each of the agreements contemplated
thereby or in connection therewith, the obligations of the EEIC
Subsidiary and, to the extent applicable, of EEIC, thereunder
will be the valid and binding obligations of the EEIC Subsidiary
and of EEIC, respectively, in accordance with the respective
terms of each such agreement, and the EEIC Subsidiary will have
legally acquired its general partner interest in BIOTEN.
(d) The consummation of the Proposed Transactions will not
violate the legal rights of the holders of any of the securities
issued by EEIC, the EEIC Subsidiary, or any of their associate
companies, Eastern Utilities Associates ("EUA"), Eastern Edison
Company ("Eastern Edison"), Blackstone Valley Electric Company
("Blackstone"), EUA Cogenex Corporation ("Cogenex"), EUA Cogenex-
Canada Inc. ("Cogenex-Canada"), EUA Service Corporation ("EUA
Service"), Montaup Electric Company ("Montaup"), Newport Electric
Corporation ("Newport"), Eastern Unicord Corporation ("Unicord"),
EUA Ocean State Corporation ("EUA Ocean State"), Ocean State
Power ("OSP I"), Ocean State Power II ("OSP II"), OSP Finance
Company ("OSP Finance"), EUA TransCapacity, Inc.
("TransCapacity"), Northeast Energy Management, Inc. ("NEM"), EUA
Citizens Conservation Services, Inc. ("CCS") and EUA Highland
Corporation ("Highland").
This opinion, in addition to being subject to the
consummation of the Proposed Transactions in accordance with the
Application-Declaration, is also subject to the following
additional assumptions:
compliance with such orders as the Commission may issue
from time to time upon the Application-Declaration, as amended;
and
the accuracy of information furnished to us as to
the outstanding securities of EEIC's associate companies, EUA,
Eastern Edison, Blackstone, Cogenex, Cogenex-Canada, EUA Service,
Montaup, Newport, Unicord, EUA Ocean State, OSP I, OSP II, OSP
Finance, TransCapacity, NEM, CCS and Highland, and that there
is no provision or condition in any note or other document in
connection with outstanding short-term notes of any of EEIC, the
EEIC Subsidiary and their aforementioned associate companies
limiting the Proposed Transactions.
This opinion relates only to federal law and the laws of The
Commonwealth of Massachusetts.
We consent to the use of this opinion in connection with the
Application-Declaration filed with the Commission.
Very truly yours,
McDermott, Will & Emery
EXHIBIT B-1, FINANCIAL PROJECTIONS FOR BIOTEN GENERAL PARTNERSHIP (1995-
2000) AND NOTES THERETO, FILED PURSUANT TO CONFIDENTIAL REQUEST
