File No. 70-8617
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
POST-EFFECTIVE AMENDMENT NO. 7
to
FORM U-1
APPLICATION-DECLARATION WITH RESPECT TO
PARTICIPATION BY
EUA ENERGY INVESTMENT CORPORATION AND ITS SUBSIDIARIES
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
EUA BIOTEN, INC.
750 West Center Street, West Bridgewater, MA 02379
(Names of companies filing this statement
and addresses of principal executive offices)
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 Post-Effective Amendment No. 7 ("Post-Effective Amendment #7") amends and
supplements Post-Effective Amendment No. 6, which amended and restated, in its
entirety, Post-Effective Amendment No. 5 filed by EUA Energy Investment
Corporation ("EEIC") and EUA BIOTEN, Inc. ("EUA BIOTEN") dated January 12,
1998, and supplements and amends the Application-Declaration on Form U-1 filed
by EEIC on April 27, 1995, as subsequently amended by Amendment No. 1 dated
May 17, 1995, Amendment No. 2 dated June 19, 1995, Amendment No. 3 dated June
21, 1995, Post-Effective Amendment No. 1 dated October 4, 1996, Post-Effective
Amendment No. 2 dated November 8, 1996 and Post-Effective Amendment No. 3
dated November 14, 1996 (as amended and restated in Post-Effective Amendment
No. 4 dated November 24, 1997) (the "Application-Declaration"). EUA BIOTEN, a
Massachusetts corporation and a wholly-owned subsidiary of EEIC, hereby joins
as an additional Applicant in this Application-Declaration. EEIC and EUA
BIOTEN are sometimes referred to hereinafter each as an "Applicant" and
collectively as the "Applicants".
1. The second paragraph of Section II.A of Item 1 is hereby amended and
restated in its entirety to read as follows:
The first BIOTEN Unit would serve as a demonstration facility (the
"Demo Unit"). The Demo Unit would be financed by BIOTEN Partnership or an
entity to be formed by BIOTEN Partnership to do business in India, and the
obligations to pay the purchase price to BIOTEN Partnership or to such to-be-
formed entity would be secured by a promissory note from First Customer in
favor of BIOTEN Partnership or such entity, the value of which promissory note
would increase at specified milestones to simulate the making of progress
payments that are financed by the promissory note (the "First Customer
Promissory Note"). Title to the Demo Unit would be transferred to First
Customer upon completion of the Demo Unit and prior to any sale of
electricity generated by such Demo Unit. BIOTEN Partnership would operate and
maintain the Demo Unit on behalf of First Customer, pursuant to a separate
operation and maintenance agreement, during a demonstration period of up to
twelve months following the completion of the Demo Unit and thereafter.
Although the specific terms of such operation and maintenance agreement have
yet to be negotiated, such agreement (i) will provide that First Customer
shall pay a flat monthly fee to BIOTEN Partnership for such operation and
maintenance services, which fee shall include, but not be limited to,
reimbursement to BIOTEN Partnership of the budgeted costs of operating the
Demo Unit during such Demonstration Period, and (ii) may provide that First
Customers hall pay to BIOTEN Partnership a performance bonus, in addition to
the monthly fee described in clause (i) of this sentence, upon the achievement
of to-be-agreed-upon performance criteria. BIOTEN Partnership expects that
construction of the Demo Unit will be completed and acceptance testing
performed within twenty-four months following the execution and commencement
of funding under a definitive construction agreement. Subject to the Demo
Unit meeting the minimum agreed upon performance criteria, work on the
remaining BIOTEN Unit is expected to be completed within twelve months
following First Customer's acceptance of the Demo Unit. Title to the second
BIOTEN Unit would be transferred to First Customer prior to any sale of
electricity generated by such unit. If First Customer so desires, BIOTEN
Partnership would enter into an operation and maintenance agreement on the
terms and conditions described above for operation and maintenance of any
BIOTEN Unit(s) transferred to First Customer subsequent to the Demo Unit. The
final installment payment for each BIOTEN UNIT shall be made no later than
upon completion of a demonstration period for such BIOTEN Unit. The
demonstration period for a BIOTEN Unit other than the Demo Unit is expected to
be less than four months duration. Upon First Customer's acceptance of the
Demo Unit, First Customer would assist BIOTEN Partnership's promotion of the
BIOTEN Technology worldwide by permitting site visits and participating in
other such activities as appropriate. In the event the Demo Unit does not
satisfy the agreed upon minimum performance criteria, BIOTEN Partnership would
be obligated to remove the Demo Unit at its expense, First Customer would have
no obligation to purchase either BIOTEN Unit, and First Customer's obligations
under the First Customer Promissory Note would be cancelled.
The following sentences are hereby inserted after the second sentence of
paragraph 3 of Section II.A of Item 1:
None of BIOTEN Partnership, EUA BIOTEN, Inc. or their respective subsidiaries
would itself, however, acquire any ownership interest in any foreign
manufacturer of components for implementation of the BIOTEN technology without
first obtaining Commission approval. Title to each BIOTEN Unit would be
transferred to its buyer prior to any sale of electricity generated by such
unit.
3. The following Paragraph C is hereby added to the end of Section II of
item 1:
C. Limitations on Liability. As a result of the structure of the
Proposed Transactions, no EUA System company other than BIOTEN Partnership,
EUA BIOTEN, Inc., BIOTEN Operations, Inc. and any special purpose subsidiary
or joint venture formed or created by BIOTEN Partnership as contemplated
hereunder (each, an "EUA BIOTEN entity") would be liable to any third party on
account of or in connection with the activities proposed in this Application-
Declaration on Form U-1, as amended. Any EUA System company other than an EUA
BIOTEN entity that renders services to BIOTEN Partnership and/or its
affiliates as contemplated hereunder: (i) shall be fully indemnified by BIOTEN
Partnership against liabilities to or claims of third parties arising out of
the performance of such services; and (ii) shall have no liability and shall
make no warranty to BIOTEN Partnership and/or its affiliates other than the
obligation to re-perform such services at cost in the event of incomplete,
incorrect or otherwise unsatisfactory performance by such EUA System company.
The following sentence is hereby added to the end of Section III.A:
The proceeds of the working capital line of credit and capital contributions
authorized hereunder would be used, among other things, (a) to finance the
engineering, procurement and construction of the Demo Unit and any subsequent
demonstration facilities authorized hereunder, (b) to provide working capital
during the engineering, procurement and construction phases of the initial
BIOTEN Units until such time as there exist completed BIOTEN Units that
internally generate revenues for BIOTEN Partnership, (c) to fund equipment and
incidental costs for same (e.g., insurance and shipping) for BIOTEN
Partnership, (d) for office and administrative expenses of BIOTEN Partnership
(domestic and foreign) including, without limitation, marketing, engineering
and design, and financial services, (e) for support of BIOTEN Partnership's
commercial demonstration facility located in Red Boiling Springs, Tennessee,
including maintenance, improvements and debt expenses associated therewith.
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 this Post-Effective Amendment #6 are estimated as follows:
Legal Fees $105,000
Accounting and Local
Regulatory Fees $ 75,000
TOTAL $180,000
The following entry hereby replaces the third listing previously included in
Item 3:
ITEM 3. Applicable Statutory Provisions. The sections of the Act and rules or
exemptions thereunder that the Applicants consider applicable to the proposed
transactions are set forth below:
Acquisition by BIOTEN Partnership Sections 9(a) and 10 and
of initial ownership interest in Rule 43(a).
Demo Unit.
7. The following new exhibit is hereby added to Item 6:
Exhibit F-2 Opinion of Counsel (filed herewith)
SIGNATURE
Pursuant to the requirements of the Public Utility Holding Company Act
of 1935, each of the undersigned Applicants has duly caused this statement to
be signed on its behalf by the undersigned duly authorized individual.
EUA ENERGY INVESTMENT CORPORATION
EUA BIOTEN, INC.
By: /s/ Clifford J. Hebert, Jr.
Clifford J. Hebert, Jr.
Their Treasurer
Dated: April 10, 1998
April 10, 1998
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington D.C. 20549
Re: File No. 70-8617 -- Application-Declaration with Respect to
Participation by EUA Energy Investment Corporation and its
Subsidiaries 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") and EUA
BIOTEN, Inc. ("EUA BIOTEN"), we are furnishing this opinion to be used in
connection with the filing of Post-Effective Amendments Nos. 6 and 7 to the
application-declaration on Form U-1 (the "Application-Declaration"; File No.
70-8617), under the Public Utility Holding Company Act of 1935, as amended
(the "Act"), filed by EEIC and EUA BIOTEN with the Securities and Exchange
Commission on February 3, 1998 and April 10, 199 8, respectively. In the
Application-Declaration, EEIC and EUA BIOTEN propose to develop a business
opportunity in India by designing, constructing, installing, operating and
maintaining two biomass-fired combustion turbine power generation facilities,
each comprising a combustion turbine offset combustor, electric generator and
other associated equipment (each such facility, a "BIOTEN Unit"), as provided
in that certain draft Memorandum of Understanding dated January __, 1998 by
and between BIOTEN Partnership and a Co-operative Society located in the State
of Maharashtra, India and registered with the Registrar of Co-operatives,
Government of Maharashtra ("First Customer"). The first such BIOTEN Unit
would serve as a demonstration unit a nd would be financed by BIOTEN
Partnership or an affiliate thereof and secured by a promissory note from
First Customer. EEIC and EUA BIOTEN also propose to develop, through BIOTEN
Partnership, to-be-formed special purpose subsidiaries of BIOTEN Partnership
and/or joint ventures between BIOTEN Partnership and third-parties, additional
business opportunities in India as well as in other countries throughout the
world, on terms and conditions similar to those for First Customer's BIOTEN
Units, subject to the working capital and capital contribution authorizations
requested in the Application-Declaration. Title to each BIOTEN Unit would be
transferred to its purchaser prior to any sale of electricity generated by
such unit.
To accomplish the transactions described in the Application-
Declaration, EEIC and EUA BIOTEN seek Commission authorization to increase the
amount of the working capital line of credit currently authorized to be
provided to BIOTEN Partnership pursuant to the Commission's Order dated
November 14, 1996 (HCAR No. 35-26604) by an additional $7 million, to charge
interest on such working capital line of credit at rates of interest not to
exceed those previously authorized pursuant to the Commission's Order dated
June 21, 1995 (HCAR No. 35-26314), which rates exceed EEIC's effective cost of
capital, and to make additional capital contributions to BIOTEN Partnership in
an aggregate amount of up to $5 million, as a result of which increased
capital contributions BIOTEN Partnership would become a subsidiary of EUA
BIOTEN within the meaning of Section 2(a)(8) of the Act.
It is our opinion, subject to the additional assumptions, exceptions
and qualifications hereinafter stated, that in the event the transactions for
which EEIC and EUA BIOTEN have requested authorization as described above (the
"Proposed Transactions") are consummated in accordance with the Application-
Declaration, as amended:
(a) All Massachusetts state laws applicable to the Proposed
Transactions will have been complied with by EEIC and EUA BIOTEN.
(b) Each of EEIC and EUA BIOTEN is a validly organized and duly
existing corporation under the laws of The Commonwealth of Massachusetts.
(c) The consummation of the Proposed Transactions will not violate
the legal rights of the holders of any of the securities issued by EEIC, EUA
BIOTEN or any of their associate companies, Eastern Utilities Associates
("EUA"), Eastern Edison Company ("Eastern Edison"), Blackstone Valley Electric
Company ("Blackstone"), Montaup Electric Company ("Montaup"), Newport Electric
Corporation ("Newport"), EUA Cogenex Corporation ("Cogenex"), EUA Ocean State
Corporation ("Ocean State"), EUA Service Corporation ("ESC"), EUA
Telecommunications Corporation ("EUA Telecommunications"), Northeast Energy
Management, Inc. ("NEM"), EUA Citizens Conservation Services, Inc. ("CCS"),
EUA Cogenex-West Corporation ("Cogenex-West"), EUA Cogenex-Canada Inc.
("Cogenex-Canada") (each of NEM, CCS, Cogenex-West and Cogenex-Canada being an
associate or subsidiary company of Cogenex), EUA Energy Services, Inc.
("Energy Services"), Duke/Louis Dreyfus Energy Services (New England) L.L.C.
("D/LDNE") (D/LDNE being an associate company of Energy Services), EUA
TransCapacity, Inc. ("TransCapacity"), EUA Compression Services, Inc.
("EUACS") (TransCapacity, EUA BIOTEN and EUACS being associate companies of
EUA Energy), Ocean State Power ("OSP I"), Ocean State Power II ("OSP II") (OSP
I and OSP II being Rhode Island general partnerships) or OSP Finance Company
("OSP Finance").
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, exceptions and
qualifications:
(1) compliance with such orders as the Commission may issue from
time to time upon the Application-Declaration, as amended; and
(2) the accuracy of information furnished to us as to the
outstanding securities of EEIC, EUA BIOTEN and their associate companies, EUA,
Eastern Edison, Blackstone, Montaup, Newport, Cogenex, Ocean State, ESC, EUA
Telecommunications, NEM, CCS, Cogenex-West, Cogenex-Canada, Energy Services,
D/LDNE, TransCapacity, EUACS, OSP I, OSP II, and OSP Finance;
(3) that all requirements of applicable state securities or "blue
sky" laws will have been complied with;
(4) that the enforceability of the Proposed Transactions may be
subject to and affected by applicable bankruptcy, receivership, insolvency,
reorganization, moratorium, fraudulent conveyance or other laws affecting the
enforcement of the rights and remedies of creditors generally (including,
without limitation, such as may deny giving effect to waivers of rights to
debtors or guarantors); and such duties and standards as are or may be imposed
on creditors, including, without limitation, good faith, reasonableness and
fair dealing under any applicable statute, rule, regulation or judicial
decision; and
(5) that the enforceability of the Proposed Transactions may be
subject to and affected by general principles of equity (regardless of whether
such enforceability is considered in a proceeding in equity or at law) and the
exercise of equitable powers by a court of competent jurisdiction (and no
opinion is given herein as to specific performance or as to the availability
of other equitable remedies or equitable relief of any kind).
The opinions expressed in this letter relate only to federal law and
the laws of The Commonwealth of Massachusetts and we express no opinion with
respect to any other jurisdiction. To the extent that certain matters
addressed may involve the laws of other states, we have assumed that such
laws are not materially different from the laws of The Commonwealth of
Massachusetts.
We consent to the use of this opinion letter in connection with the
Application-Declaration filed with the Commission.
Very truly yours,
McDermott, Will & Emery
