Filings Under the Public Utility Holding Company Act of 1935 (``Act'')

SECURITIES AND EXCHANGE COMMISSION

[Release No. 35-26047]

Filings Under the Public Utility Holding Company Act of 1935

(``Act'')

May 6, 1994.

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 amendments 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 May 31, 1994, to the Secretary, Securities and Exchange

Commission, Washington, DC 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 ill be notified or 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.

The Southern Development and Investment Group (70-8173)

The Southern Development and Investment Group, Inc., a non-utility

subsidiary of The Southern Company (``Southern''), a registered holding

company, and Southern, each of 64 Perimeter Center East, Atlanta,

Georgia 30346, have filed an application-declaration under sections

6(a), 7, 9(a), 10, 12(b) and 13(b) of the Act and Rules 45, 50(a)(5),

81, 87, 90 and 91 thereunder.

Southern proposes to invest up to $275 million in Development from

time to time through December 31, 1998 in order to fund the following

activities, as discussed in more detail below: (a) To enable

Development to develop, construct, and acquire an energy management

prototype network ($175 million); (b) to provide Development with

necessary working capital in connection with its research and

development and technical consulting activities, as well as to pay

other general and administrative expenses ($50 million), including--(i)

Funding to commercialize POWERcall ($10 million of the total $50

million) and (ii) payment of predevelopment costs associated with

potential investments in other energy management facilities and energy

recovery facilities ($10 million of the total $50 million); and, (c) to

finance the costs of equipment and/or provide customer financing of

equipment in connection with energy management and efficiency services

provided by Development ($50 million).

Southern proposes to acquire, and Development proposes to issue and

sell, common stock and notes up to $275 million from time to time

through December 31, 1998, with maturities no later than December 31,

2003. Such loans will bear an interest rate equal to a rate not to

exceed the prime rate in effect on the date of the loan at a bank

designated by Southern. In addition, Development proposes to convert

the notes to capital contributions (through Southern's forgiveness of

the debt evidenced thereby). Alternatively, Southern proposes to make

up to $275 in cash capital contributions to Development from time to

time through December 31, 1998.

Development proposes to issue and sell to third parties, and

Southern proposes to guarantee, up to $275 million in notes or other

recourse liabilities from time to time through December 31, 1998, the

maturities of which will not extend past December 31, 2003. The loans

evidenced by such notes will be made with an interest rate not to

exceed 3% over the lender bank's prime rate.

Development proposes to acquire promissory notes evidencing the

debt of customers in connection with financing energy management and

efficiency equipment. Further, Development may assign evidences of

customer indebtedness to Southern in consideration of a reduction in

the amount of outstanding notes, in which case the aggregate amount of

outstanding customer indebtedness held by Southern would be added to

the aggregate amount of outstanding notes issued by Development and

held by Southern for purposes of the proposed $50 million limit.

Southern proposes to provide performance guarantees and to

undertake other contractual obligations with respect to the performance

and other obligations of Development under contracts and bids with

third parties. Southern proposes to provide guarantees in an aggregate

amount outstanding at any one time of $200 million through December 31,

2003; provided, that any guarantees or indemnifications outstanding at

December 31, 2003 shall continue until expiration or termination in

accordance with their terms. For purposes of computing the above

limitation, neither Southern's agreements to provide guarantees or

indemnifications of sureties of Development which have not actually

been issued, nor Development's joint venture partner's respective

shares of any joint venture obligations or indemnification of sureties

of the joint venture, shall be counted. In addition, Southern and

Development request that they have the flexibility to negotiate

specific guarantees and similar provisions and arrangements with third

parties, and indemnifications of sureties, as the need to do so arises,

without further Commission authorization.

Development proposes to enter into new service agreements with

Southern Company Services, Inc. (``Services'') and each of the

operating electric utility companies (each an ``Operating Company'',

collectively, ``Operating Companies'') that will be substantially

identical to the existing agreements between Development and Services.

Development proposes to undertake activities, including advertising

and marketing studies, additional pilot tests, testing of various

manufacturers' equipment, and purchases of equipment and software

enhancements, among other activities, with a view to commercializing

POWERcall and related customer services\1\ throughout Alabama and

Georgia and in the Gulf region of Mississippi and Florida. Development

also requests authority to enter into agreements with utilities that

are interconnected with Southern System companies pursuant to which

Development would offer POWERcall and related services to the customers

of such non-affiliated utilities. Development proposes to invest up to

$10 million in connection with these activities.

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\1\POWERcall is described as a utility customer service

involving the installation of a device at a customer's premises

which would monitor and automatically report power outages to a

utility's operations center. Development states that it is

investigating the additional capabilities of the monitoring device

and its related software to determine the commercial feasibility of

providing certain monitoring services in addition to POWERcall. Such

additional services would include both energy-related services, such

as automated meter reading and temperature monitoring, and other

services, such as fire, intrusion and health alarm services.

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Development also requests authority to develop, purchase,

construct, own and operate a prototype energy management communications

network\2\ at various locations within the Southern System. Development

requests authority to invest up to $175 million in equity investments

in such prototype systems, which would cover design and marketing costs

and the costs of building, purchasing, or leasing fiber and coaxial

cable lines and related equipment, facilities and properties.

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\2\Development states that, by utilizing his network, it

proposes to offer to customers power usage and outage monitoring

services (including POWERcall), two way customer/utility

communications, automated billing, energy and conservation

information, including ``Good Cents'' messages and information, and

communications-based programs, such as ``distance learning,'' that

may be offered in conjunction with a utility's industrial

development activities, among other potential utility and utility-

related interactive communications services. Development states that

the network may also be used for internal system communication of

voice and data.

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Development proposes to make available the balance of the bandwidth

capacity to other communications providers of voice, data, and video

services, such as cable television companies, local and long distance

telephone companies, computer networks, commercial merchants (e.g.,

home shopping networks), or large private users, such as banks,

pursuant to leases, network sharing agreements or licensing

transactions negotiated at arms' length for varying terms at market

values.

Development proposes to provide the necessary system operations and

maintenance services in connection with its energy management

communications network and will charge third party communications

providers the fair market value of such services based on their level

of use of the system.

Development also proposes to offer to utility customers directly,

or indirectly through public utility companies, a broader range of

energy management services, including demandside management (``DSM'')

measures, and, in connection therewith, proposes to invest in energy

management equipment and/or provide customer financing for the purchase

of equipment from third party vendors and suppliers. Specifically,

Development proposes to: (1) Engage in energy management services,

including--(a) Design of modifications and new equipment, (b)

management or direct installation of new equipment, (c) the entry into

performance contracts (where Development is paid on the basis of actual

energy savings), (d) the arrangement of third-party financing for

conservation programs, (e) the training personnel in use of equipment,

and (f) the observation of the operation of installed system to insure

that it meets design specifications; (2) offer demand-side management

services, including--(a) design of energy conservation programs, (b)

implementation of energy conservation programs, (a) performance

contracts for DSM work, and (d) the monitoring and/or evaluating of DSM

programs; (3) invest in energy management equipment; and, (4) provide

customer financing for the purchase of energy management equipment from

third parties.

Development requests authority to use up to $50 million of the

funds provided by Southern to make investments in energy efficiency and

conservation assets and/or loans to customers to enable such customers

to finance the purchase of such assets.

Development requests authority to provide the following general

types of technical consulting services to non-affiliated entities,

including utilities, industrial and commercial concerns and

governments: management expertise, such as strategic planning, finance,

feasibility studies, organization, energy efficiency, safety,

environmental and conservation matters, policy matters and management

services; technical services and expertise, such as design,

engineering, procurement, construction supervision, information systems

and services, environmental and conservation planning, auditing,

engineering and construction, engineering and construction planning and

procedures, data processing, system planning and operational planning;

training expertise, including training in the area of operation,

equipment repair, and maintenance; and technical and procedural

resources and systems, such as are embedded in computer, information,

and communications systems, programs or manuals developed or acquired

by Southern System companies. In addition, Development seeks authority

to render certain services that Southern Electric International, Inc.

(``SEI'') now provides in accordance with the Commission orders dated

July 17 and December 18, 1981 (HCAR Nos. 22132 and 22315A,

respectively) to public utility companies and others having need for

the procurement of materials, machinery, equipment, services and

supplies used in the generation, transmission, and distribution of

electric power and the maintenance of inventories of spare parts, such

as through joint procurement organizations (e.g., Pooled Inventory

Management Services), which may include, as members, participants, or

shareholders companies that are subsidiaries of Southern. Development

also seeks authority to assume SEI's obligations under existing

contracts to the extent that they can be assigned.

Development also requests authorization to offer to third parties

Intellectual property\3\ created or acquired by Development or its

associate companies within the Southern System.

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\3\``Intellectual Property'' is defined as ``any process,

program or technique which is protected by the copyright, patent or

trademark laws, or as a trade secret, and which has been

specifically and knowingly incorporated into, exhibited in, or

reduced to a tangible writing, drawing, manual, computer program,

product or similar manifestation or thing.'' see HCAR Nos. 22132 and

22315A (July 17 and December 18, 1981, respectively).

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Development also proposes to undertake preliminary development

activities with respect to potential investments in energy and resource

recovery facilities and technologies, including but not limited to coal

gasification facilities and other synthetic fuels technologies,

landfill gas recovery, refuse derived fuels, and other alternative

fuels technologies. Development states that it will not make any

capital investment in any such facility exceeding $1 million

individually or $10 million in the aggregate, except pursuant to

separate Commission authorization.

Gulf States Utilities Company (70-8375)

Gulf States Utilities Company (``GSU''), 350 Pine Street, Beaumont,

Texas 77701, an electric utility subsidiary company of Energy

Corporation, a registered holding company, has filed an application-

declaration pursuant to sections 6(a), 7, 9(a), 10, 12(c) and 12(d) of

the Act and Rules 42, 44(b), 50 and 50(a)(5) thereunder. GSU proposes

to engage in the transactions described herein from time to time

through December 31, 1995.

GSU proposes to issue and sell not more than $700 million aggregate

principal amount of: (1) One or more series of its preferred stock,

cumulative, $100 par value, and/or its preferred stock, cumulative,

without per value (``Preferred''); (2) one or more new series of its

first mortgage bonds (``Bonds''); and/or (3) one or more new sub-series

of the medium term note series of its first mortgage bonds (``MTNs'').

Each series of Bonds or sub-series of MTNs will be sold at such

price, will bear interest at such rates and will mature on such date

(not more than 40 years from the first day of the month of issuance) as

will be determined at the time of sale. No series of Bonds or sub-

series of MTNs will be issued at rates in excess of those generally

obtained at the time of pricing for sales of first mortgage bonds or

medium term notes having the same maturity, issued by companies of

comparable credit quality and having similar terms, conditions and

features. The price, exclusive of accrued interest, to be paid for each

series of Bonds to be sold at competitive bidding will be within a rang

of not more than 5 percentage points, but shall not exceed 5 percentage

points above or below 100% of the principal amount of such series of

Bonds, and the price of each sub-series of MTNs will be within a range

of 95-105% of the principal amount. GSU requests an exemption from the

Commission's Statement of Policy Regarding First Mortgage Bonds (HCAR

No. 13105, February 16, 1956, as modified by HCAR No. 16369, May 8,

1969) (``Bond SOP'') to the extent that, among other things, the

redemption provisions, the sinking fund provisions (or lack thereof),

the covenant limiting common stock dividends and/or the maintenance and

replacement provisions (or lack thereof) with respect to any series of

Bonds or sub-series of MTNs deviate from the Bond SOP.

The price, exclusive of accumulated dividends, for each series of

Preferred will be determined at the tome of sale and will not be less

than par or stated value on a per share basis. The price to be paid for

any series of Preferred to be sold at competitive bidding will not be

less than par or stated value nor more than 102.75% thereof per share,

plus accumulated dividends, if any. No series of Preferred would be

sold if the dividend rate thereon would exceed those generally obtained

at the time of pricing for sales of preferred stock of the same par or

stated value, issued by companies of comparable credit quality and

having similar terms, conditions and features. GSU requests an

exemption from the Commission's Statement of Policy Regarding Preferred

Stock (HCAR No. 13106, February, 16, 1956, as modified by HCAR No.

16758, June 22, 1970) (``Stock SOP'') to the extent that, among other

things, the redemption provisions of any series of Preferred deviate

from the Stock SOP.

Depending upon market conditions, GSU may sell one or more series

of Preferred having a par value of $100 to underwriters for deposit

with a bank or trust company (``Depositary''). The underwriters would

then receive from the Depositary and deliver to the repurchasers in the

subsequent public offering shares of depositary preferred stock

(``Depositary Preferred''), each representing a stated fraction of a

share of the Preferred. Depositary Preferred would be evidenced by

depositary receipts. Each owner of Depositary Preferred would be

entitled proportionally to all the rights and preferences of the series

of Preferred (including dividends, redemption and voting). A holder of

Depositary Preferred will be entitled to surrender Depositary Preferred

to the Depositary and receive the number of whole shares of Preferred

represented thereby. A holder of Preferred will be entitled to

surrender shares of Preferred to the Depositary and receive a

proportional amount of Depositary Preferred.

GSU proposes to use the net proceeds derived from the issuance and

sale of the Bonds, MTNs and/or Preferred for general corporate

purposes, including, but not limited to, the repayment of outstanding

securities when due and/or the possible redemption, acquisition or

refunding of certain outstanding securities prior to their stated

maturity or due date.

GSU states that it may sell the Bonds, MTNs and Preferred pursuant

to the competitive bidding requirements of Rule 50, or, by means of

agency arrangements or direct placement with purchasers under an

exception from the competitive bidding requirements of Rule 50 pursuant

to Rule 50(a)(5), in the event that GSU determines that a negotiated

public offering or private placement would be advantageous. GSU

requests authorization to undertake negotiations with respect to

arrangements for the issuance and sale of the Bonds, MTNs and

Preferred. It may do so.

GSU also proposes to enter into arrangements for the issuance and

sale of tax-exempt bonds (``Tax-Exempt Bonds''), and in connection

therewith, GSU proposes to enter into one or more equipment lease/

sublease arrangements (``Equipment Lease''), pursuant to which one or

more governmental authorities (``Issuers'') may issue one or more

series of Tax-Exempt Bonds under one or more indentures (``Indenture'')

in an aggregate principal amount not to exceed $250 million. The net

proceeds from the sale of the Tax-Exempt Bonds will be used to finance

certain facilities including but not limited to sewage and/or solid

waste disposal or pollution control facilities (``Facilities'') that

have not heretofore been the subject of such financing, or to refinance

outstanding tax-exempt bonds issued for that purpose.

GSU further proposes, under the Equipment Lease, to acquire,

construct and install the Facilities, and lease the Facilities to the

Issuers and simultaneously sublease such Facilities from the Issuers at

subrentals sufficient (together with other monies held by the trustee

under the applicable Indenture and available for such purpose) to pay

the principal or redemption price of, premium, if any, interest and

other amounts owing on the Tax-Exempt Bonds together with related

expenses. Under the Equipment Lease, GSU will also be obligated to pay

certain fees incurred in connection with the transactions.

The Equipment Lease and the Indenture may provide for either a

fixed interest rate or an adjustable interest rate for each series of

the Tax-Exempt Bonds. No series of Tax-Exempt Bonds would be sold if

the fixed interest rate or initial adjustable interest rate thereon

would exceed the lower of 13% or rates generally obtained at the time

of pricing for sales of tax-exempt bonds having the same maturity,

issued for the benefit of companies of comparable credit quality and

having similar terms, conditions and features. The Tax-Exempt Bonds

will mature not earlier than five years from the first day of the month

of issuance nor later than 40 years from the date of issuance. Each

series may be subject to redemption and/or sinking fund provisions.

GSU proposes to arrange for one or more irrevocable letters of

credit, in an aggregate amount up to $300 million and for a term not to

exceed ten years, from a bank, in favor of the trustee for one or more

series of Tax-Exempt Bonds. GSU would enter into a letter of credit and

reimbursement agreement (``Reimbursement Agreement'') with the bank

under which GSU would agree to reimburse the bank for amounts drawn

under the letter of credit within 60 months with the interest rate not

to exceed the bank's prime commercial loan rate plus 2% and to pay

certain fees, including up-front fees not to exceed $100,000 and annual

fees not to exceed 1\1/4\% of the face amount of the letter of credit.

Provision may be made for extension of the term of such letter of

credit or for the replacement thereof, upon its expiration or

termination, by another letter of credit.

In addition, or as an alternative to a letter of credit, GSU may:

(1) Provide an insurance policy for one or more series of Tax-Exempt

Bonds, and/or (2) obtain authentication of and pledge one or more new

series of its First Mortgage Bonds (``Collateral Bonds'') to be issued

under GSU's mortgage and delivered to the trustee or the bank to

evidence and secure GSU's obligations under the Equipment Lease or the

Reimbursement Agreement. Such Collateral Bonds could be issued: (1) In

a principal amount equal to the principal amount of Tax-Exempt Bonds

and bearing interest at a rate equal to the rate of interest on such

Tax-Exempt Bonds; (2) in a principal amount equivalent to the principal

amount of Tax-Exempt Bonds plus an amount equal to interest on those

Tax-Exempt Bonds for a specified period and bearing no interest; (3) in

a principal amount equivalent to the principal amount of Tax-Exempt

Bonds or in such amount plus an amount equal to interest on those Tax-

Exempt Bonds for a specified period, but carrying a fixed interest rate

that would be lower than the fixed interest rate of the Tax-Exempt

Bonds; or (4) in a principal amount of Tax-Exempt Bonds at an

adjustable rate of interest, varying with such Tax-Exempt Bonds but

having a ceiling rate of 13%. Each series of the Collateral Bonds that

would bear interest would do so at a fixed interest rate or initial

adjustable interest rate not to exceed 13%. The terms of the Collateral

Bonds will correspond to the terms of the related Tax-Exempt Bonds. The

maximum amount of the Collateral Bonds would be $300 million, and the

Collateral Bonds would be in addition to the aggregate limitation on

the Bonds specified above. In connection with the proposed Tax-Exempt

Bonds financing, GSU requests a finding of the Commission that

competitive bidding of Collateral Bonds pursuant to Rule 50 is

inappropriate since the Collateral Bonds would be issued and pledged

solely to secure GSU's obligations and no public offering of the

Collateral Bonds would be made.

GSU also proposes to use, in addition to or as an alternative for

the proceeds from the sale of the Bonds, MTNs, Preferred and/or Tax-

Exempt Bonds, other available funds to acquire, through tender offers,

open market or negotiated purchases, in whole or in part, prior to

their respective maturities, not more than $600 million aggregate

principal amount and par value and/or stated value of: (1) One or more

series of GSU's outstanding first mortgage bonds or sub-series of MTNs,

(2) one or more series of GSU's outstanding preferred stock, (3) one or

more series of outstanding tax-exempt bonds heretofore issued for the

benefit of GSU, (4) GSU's outstanding series of debentures, and/or (5)

GSU's outstanding series of preference stock. GSU states that it will

not use the proceeds from the sale of the Bonds, MTNs, Preferred and/or

Tax-Exempt Bonds to enter into refinancing transactions unless: (1) the

estimated present value savings derived from the net difference between

interest or dividend payments on a new issue of comparable securities

and those securities refunded is, on an after-tax basis, greater than

the present value of all repurchasing, redemption, tendering and

issuing costs, assuming an appropriate discount rate, determined on the

basis of the then estimated after-tax cost of capital of Entergy

Corporation and its subsidiaries, consolidated; or (2) GSU shall have

notified the Commission of the proposed refinancing transaction

(including the terms thereof) and obtained appropriate authorization to

consummate the transaction.

Louisiana Power & Light Co. (70-8391)

Louisiana Power & Light Company (``LP&L''), 639 Loyola Avenue, New

Orleans, Louisiana 70113, an electric utility subsidiary company of

Entergy Corporation (``Entergy''), a registered holding company, has

filed an declaration, pursuant to Sections 6(a) and 7 of the Act and

Rule 50(a)(5).

LP&L proposes to issue and sell up to $326 million in secured lease

obligation bonds (``Refunding Bonds''), in one or more series through

December 31, 1995, in order to redeem approximately $310 million in

previously issued and sold secured lease obligation bonds (``Original

Bonds'').

By orders dated September 26, 1989 (HCAR No. 24956) and September

27, 1989 (HCAR No. 24958) (``Orders''), LP&L sold to and leased back

from three separate trusts ``(Lessors''), on a long-term net lease

basis pursuant to three separate facility leases (``Leases''), an

approximate 9.3% aggregate ownership interest (``Undivided Interests'')

in Unit No. 3 of the Waterford nuclear power plant (``Waterford 3'') in

three almost identical but separate transactions. The First National

Bank of Commerce (``Owner-Trustee'') is the trustee for these trusts.

LP&L now has an approximate 9.3% leasehold interest in Waterford 3.

The purchase price of the Undivided Interests was $353.6 million.

About $43,603,000 was provided through equity contributions of the

owner-participant in each of the three Lessor trusts. About

$309,997,000 was provided through issuance of the Original Bonds by the

Owner-Trustee in an underwritten public offering. The Original Bonds

consist of three separate series of secured lease obligation bonds,

with an annual interest rate of 10.30%, to mature on January 2, 2005,

issued in an aggregate principal amount of $140,452,000 (``2005

Bonds''), and three separate series of secured lease obligation bonds,

with an annual interest rate of 10.67%, to mature on January 2, 2017,

issued in an aggregate principal amount of $169,545,000 (``2017

Bonds'').

LP&L now proposes to have the Owner-Trustee issue the Refunding

Bonds either under three amended and supplemented Indentures of

Mortgage and Deeds of Trust dated September 1, 1989 or under comparable

instruments (``Indentures''). The Refunding Bonds will be issued to

refund the Original Bonds. In the alternative, LP&L proposes to refund

all or a portion of the Original Bonds with interim funds obtained from

banks or other institutions by the Owner-Trustee (``Interim Funds'')

and to then issue Refunding Bonds to retire the Interim Funds.

The proceeds from the sale of the Refunding Bonds and possibly the

proceeds of the Interim Funds, possibly together with funds provided by

LP&L, will be used to redeem the Original Bonds and to meet associated

issuance costs. The 2005 Bonds are optionally redeemable on July 2,

1994 for 105.150% of their principal amount. The 2017 Bonds are first

optionally redeemable on July 2, 1994 for 108.003% of their principal

amount. Should Original Bonds be retired with the Interim Funds, the

proceeds of Refunding Bonds will be used to retire the Interim Funds.

It is not anticipated that there would be a redemption premium

associated with the retirement of the Interim Funds. The Refunding

Bonds will be structured and issued under the documents and pursuant to

the procedures applicable to the issuance of the Original Bonds, which

documents and procedures are described in the Orders, or comparable

documents with similar terms and provisions.

The Interim Funds would be provided through one or more domestic or

foreign financial institutions (``Interim Lenders''), which would make

loans to the Lessors evidenced by notes issued by the Lessors. The term

of the Interim Funds would be up to the remainder of the basic lease

terms under the Leases. LP&L might assume the Interim Funds upon the

occurrence of certain events or if it exercises certain purchase

options under the Leases. The Interim Funds would be refunded with the

proceeds of the Refunding Bonds. LP&L would use its best efforts to

arrange for refunds with desirable interest rates as quickly as

possible after the Interim Funds are required.

LP&L is obligated to make payments under the Leases in amounts that

will provide for scheduled payments of principal and interest on the

Refunding Bonds when due. Upon the refund of the Original Bonds,

amounts payable by LP&L under the Leases will be adjusted pursuant to

the terms of supplements to the Leases to be entered into. A similar

procedure would be used if the Interim Funds are used.

Neither the Refunding Bonds nor the Interim Funds will be direct

obligations of or guaranteed by LP&L. However, under certain

circumstances, LP&L might assume all or a portion of the Refunding

Bonds of the Interim Funds. Each Refunding Bond will be secured by,

inter alia, (i) A lien on and security interest in the Undivided

Interest of the Lessor that issues the Refunding Bond and (ii) certain

other amounts payable by LP&L thereunder. The notes of the Lessor in

evidence of the Interim Funds would also be secured.

The Refunding Bonds are to be issued in registered form without

coupons in denominations of $1,000 or integral multiples thereof.

Interest on the Refunding Bonds of each series will be payable January

2 and July 2 of each year to commence with the interest payment date

after the initial issuance of the Refunding Bonds. Interest on Interim

Funds could be paid on a different basis. The Refunding Bonds might be

redeemed if a Lease is to be terminated prior to the end of the basic

lease term provided for therein. Similar provisions would be applicable

to the Interim Funds.

Instead of Refunding Bonds issued through the Owner-Trustee, LP&L

might arrange for a funding corporation to issue the Refunding Bonds,

in which case the proceeds from Refunding Bonds would be loaned by the

funding corporation to the Lessors, which would issue notes (``Lessor

Notes'') to the funding corporation to evidence the loans and secure

the Refunding Bonds, and the Lessors would use the loans to redeem the

Original Bonds.

The terms of the Lessor Notes and the indentures for their issuance

would reflect the redemption and other terms of the Refunding Bonds.

The rental payments of LP&L would be used for payments on principal and

interest on the Lessor Notes, which payments would be used for payments

on Refunding Bonds when due. The Refunding Bonds would be secured by

the Lessor Notes, which would be secured by a lien on and security

interest in the Undivided Interests and by certain rights under the

Leases.

An alternative to Refunding Bonds issued by the Owner-Trustee would

be for LP&L to use a trust structure in which the Lessors would issue

Lessor Notes to one or more passthrough trusts and the trusts would

issue certificates in evidence of ownership interests in the trusts.

The debt terms of the Refunding Bonds would be comparable to the terms

of the Lessor Notes and the indentures for their issuance.

LP&L might have some Refunding Bonds or trust certificates to be

sold by competitive bidding, negotiated underwritten public offering,

or private placement with institutional investors. LP&L intends to

arrange the Interim Funds through commercial banks or similar

institutions.

LP&L believes that it would be impossible to sell the Refunding

Bonds or the trust certificates, or to arrange the Interim Funds, by

competitive bidding in accordance with Rule 50. Thus LP&L requests

under Rule 50(a)(5) an exception from the competitive bidding

requirements of the rule. LP&L further requests authorization to

negotiate for the sale of the Refunding Bonds or the trust certificates

or for the Interim Funds. It may do so.

LP&L shall not have the Owner-Trustee sell the Refunding Bonds or

the trust certificates, or acquire the Interim Funds, unless: (i) The

estimated present value savings derived from the net difference between

interest payments on a new issue of comparable securities and those

securities refunded is, on an after-tax basis, in excess of the present

value of all redemption and issuance costs, based on an appropriate

discount rate, determined on the basis of the then estimated after-tax

cost of capital of Entergy and its consolidated subsidiaries, or (ii)

LP&L shall have obtained Commission authorization.

Under the separate 1989 participation agreements relative to the

sale of the Undivided Interests, LP&L issued three separate promissory

notes to the owner-participants in an aggregate principal amount equal

to the highest of either the maximum net casualty value or the maximum

net special casualty value payable under the Leases during the basic

lease term.--$208,236,768 on July 2, 1994, which is expected to be the

approximate date of the sale. Redemption of the Original Bonds could,

in some circumstances, cause an increase in these values and therefore,

require an increase in the principal amount of the related promissory

notes.

In addition, LP&L is required to collateralize its obligations to

the owner-participants five years after the sales either through first

mortgage bonds in a principal amount equal to that of the promissory

notes or a letter of credit (HCAR No. 24956, September 26, 1989). To

the extent the proposed transactions would necessitate the issuance of

promissory notes or first mortgage bonds in a principal amount in

excess of that previously authorized, LP&L also seeks authorization of

such increases.

Metropolitan Edison Company (70-8401)

Metropolitan Edison Company (``Met-Ed''), 2800 Pottsville Pike,

Muhlenberg Township, Berks County, Pennsylvania 19640, a public-utility

subsidiary company of General Public Utilities Corporation (``GPU''), a

registered holding company, has filed an amended application-

declaration under sections 6(a), 7, 9(a), 10 and 12(b) of the Act and

rules 45, 50(a)(5) and 54 thereunder. A notice of the application-

declaration was issued by the Commission on April 22, 1993 (HCAR No.

26034) (``Prior Notice'').

As described in the Prior Notice, Met-Ed proposes to organize a

special purpose subsidiary (``Met-Ed Capital'') as either a limited

liability company under the Delaware Limited Liability Company Act

(``LLC Act'') or a limited partnership under the Pennsylvania or

Delaware Revised Uniform Limited Partnership Act. Met-Ed may also

organize a second special purpose wholly owned subsidiary under the

Delaware General Corporation Law (``Investment Sub'') for the sole

purpose of either: (i) Acquiring and holding a second class of Met-Ed

Capital common interests so as to comply with the requirement under the

LLC Act that a limited liability company have at least two members or

(ii) acting as the general partner of Met-Ed Capital, assuming a

limited partnership structure. Met-Ed Capital will then issue and sell

from time to time in one or more series through June 30, 1996 up to

$125 million aggregate stated value of preferred limited liability

company interests or limited partnership interests, in the form of

Monthly Income Preferred Stock, $25 per share stated value (``MIPS'').

Met-Ed states that there are certain changes to the transactions as

described in the Prior Notice. First, each note or Subordinated

Debenture, as described in the Prior Notice, will have a term of up to

50 years, rather than 30 years that may be extended for up to an

additional 20 years, subject to certain specified conditions.

In addition, Met-Ed states that there are certain changes to the

structure of Met-Ed Capital and Investment Sub. Met-Ed may acquire all

of the common stock of Investment Sub for a nominal consideration and

may capitalize Investment Sub with a demand promissory note in the

principal amount of up to 10% of the total capitalization of Met-Ed

Capital from time to time, or up to an initial principal amount of $13

million. If Met-Ed Capital is organized as a limited partnership,

Investment Sub may also acquire up to a 3% general partnership interest

in Met-Ed Capital. The amount of such capital contribution (up to $4.0

million), together with the gross proceeds received by Met-Ed Capital

from the issuance and sale of the MIPS (i.e., a maximum of $125

million), would be applied by Met-Ed Capital to acquire Met-Ed's

Subordinated Debentures. The total equity contributions by Met-Ed to

Met-Ed Capital would not exceed $35 million.

Finally, Met-Ed may acquire a separate class of limited partnership

interest in Met-Ed Capital for a nominal consideration to ensure that

Met-Ed Capital will at all times have a limited partner as required by

the Delaware Revised Uniform Limited Partnership Act.

Pennsylvania Electric Company (70-8403)

Pennsylvania Electric Company (``Penelec''), 1001 Broad Street,

Johnstown, Pennsylvania 15907, a public-utility subsidiary company of

General Public Utilities Corporation (``GPU''), a registered holding

company, has filed an amended application-declaration under sections

6(a), 7, 9(a), 10 and 12(b) of the Act and rules 45, 50(a)(5) and 54

thereunder. A notice of the application-declaration was issued by the

Commission on April 22, 1993 (HCAR No. 26034) (``Prior Notice'').

As described in the Prior Notice, Penelec proposes to organize a

special purpose subsidiary (``Penelec Capital'') as either a limited

liability company under the Delaware Limited Liability Company Act

(``LLC Act'') or a limited partnership under the Pennsylvania or

Delaware Revised Uniform Limited Partnership Act. Penelec may also

organize a second special purpose wholly owned subsidiary under the

Delaware General Corporation Law (``Investment Sub'') for the sole

purpose of either: (1) Acquiring and holding a second class of Penelec

Capital common interests so as to comply with the requirement under the

LLC Act that a limited liability company have at least two members or

(ii) acting as the general partner of Penelec Capital, assuming a

limited partnership structure. Penelec Capital will then issue and sell

from time to time in one or more series through June 30, 1996 up to

$125 million aggregate stated value of preferred limited liability

company interests or limited partnership interests, in the form of

Monthly Income Preferred Stock, $25 per share stated value (``MIPS'').

Penelec states that there are certain changes to the transactions

described in the Prior Notice. First, each Note or Subordinated

Debenture, as described in the Prior Notice, will have a term of up to

50 years, rather than 30 years that may be extended for up to an

additional 20 years, subject to certain specified conditions.

In addition, Penelec states that there are certain changes to the

structure of Penelec Capital and Investment Sub. Penelec may acquire

all of the common stock of Investment Sub for a nominal consideration

and may capitalize Investment Sub with a demand promissory note in the

principal amount of up to 10% of the total capitalization of Penelec

Capital from time to time, or up to an initial principal amount of $13

million. If Penelec Capital is organized as a limited partnership,

Investment Sub may also acquire up to a 3% general partnership interest

in Penelec Capital. The amount of such capital contribution (up to $4.0

million), together with the gross proceeds received by Penelec Capital

from the issuance and sale of the MIPS (i.e., a maximum of $125

million), would be applied by Penelec Capital to acquire Penelec's

Subordinated Debentures. The total equity contributions by Penelec to

Penelec Capital would not exceed $35 million.

Finally, Penelec may acquire a separate class of limited

partnership interest in Penelec Capital for a nominal consideration to

ensure that Penelec Capital will at all times have a limited partner as

required by the Delaware Revised Uniform Limited Partnership Act.

Allegheny Power System, Inc., et al. (70-8411)

Allegheny Power System, Inc., (``Allegheny''), 12 East 49th Street,

New York, New York, 10017, a registered holding company, has filed an

application-declaration under Sections 6(a), 7, 9(a), 10, 12(b) and

13(b) of the Act and Rules 45, 87,90 and 91 promulgated thereunder.

Allegheny requests Commission authorization through December 31,

1996 to organize and finance a new wholly-owned non-utility subsidiary

company--AYP Capital, Inc., (``AYP'')--that would invest directly or

indirectly in (i) companies involved in new technologies that are

related to the core business of Allegheny; and (ii) companies for the

acquisition and ownership of exempt wholesale generators (``EWGs'')

within the definition of Section 32 of the Act. Allegheny also proposes

through December 31, 1996 to invest up to $500,000 in AYP.

Allegheny proposes to incorporate AYP in Delaware with initial

authorized capital of up to 1,000 shares of common stock (no par value)

and to subscribe to 100 shares of AYP common stock for $10.00 per

share. Allegheny also proposes to fund AYP from time to time through

December 31, 1996 through purchases of additional AYP stock, or capital

contributions, in an aggregate amount not to exceed $500,000. AYP will

use those funds to pursue appropriate investment opportunities in new

technologies or in EWGs. Allegheny proposes to obtain funds for this

purpose from: (i) Sales of Allegheny common stock pursuant to its

Dividend Reinvestment and Stock Purchase and Employee Stock Ownership

and Savings Plans, (ii) regular bank lines of credit, or (iii) internal

sources. Allegheny states that it will not guarantee indebtedness of

AYP.

Allegheny states that it anticipates that AYP will have no paid

employees and that personnel employed by Allegheny Power Service

Corporation (``Allegheny Service''), a wholly-owned nonutility

subsidiary company of Allegheny, will provide a wide range of services,

on an as-needed basis, to AYP pursuant to a service agreement to be

entered into between AYP and Allegheny Service. Under this service

agreement, AYP will reimburse Allegheny Service for the cost of

services provided in accordance with Rules 90 and 91 of the Act. All

time spent by Allegheny Service employees on AYP matters will be billed

to and paid by AYP on a monthly basis.

Allegheny states that AYP will maintain separate financial records

with profit and loss statements. Allegheny Service, it is stated,

pursuant to the service agreement with AYP, will be responsible for the

financial records and for audit procedures that are in compliance with

generally accepted principles.

With respect to EWGs, Allegheny states that if AYP acquires an

interest in an EWG, it will use Allegheny Service employees or other

Allegheny system employees ``within a de minimis limit'' for services.

It is stated that AYP will not use in excess of 2% of the total

employees of all other Allegheny system domestic public utility

companies for services to an affiliated EWG.

With respect to new technologies related to its core business,

Allegheny states that there are significant opportunities for

investment in companies engaged in the development of new technologies

that would promote the public interest through efficient and clean

electric power generation and utilization. It is stated that the new

technologies would be related to: (i) Electric power conversion and

storage; (ii) conservation, load management, and demand side

management; (iii) environmental and waste treatment; (iv) advanced

computer hardware and software; (v) power-related electronic systems,

control systems and components; (vi) electronic automation systems and

components.

Allegheny states that, to invest in EWGs or in companies engaged in

new technologies, AYP might directly invest or seek experienced

investment partners and structure investment vehicles with those

partners. In either event, each investment, it is stated, will be

structured to limit the exposure of AYP to excessive liabilities and to

allow AYP a role in the direction of the business.

Allegheny states that it now has no proposed specific investment in

mind and that AYP shall make no investment without prior Commission

approval. Allegheny also states that neither it nor AYP will, without

Commission approval, finance the future acquisition by AYP of an EWG or

new technologies company.

For the Commission, by the Division of Investment Management,

pursuant to delegated authority.

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 94-11607 Filed 5-12-94; 8:45 am]

BILLING CODE 8010-01-M