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

SECURITIES AND EXCHANGE COMMISSION

[Release No. 35-26183]

Filings Under the Public Utility Holding Company Act of 1935, as

Amended (``Act'')

December 9, 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 January 3, 1995, to the Secretary, Securities and Exchange

Commission, Washington, D.C. 20549, and serve a copy on the relevant

applicant(s) and/or declaration(s) at the address(es) specified below.

Proof of service (by affidavit or, in case of an attorney at law, by

certificate) should be filed with the request. Any request for hearing

shall identify specifically the issues of fact or law that are

disputed. A person who so requests will be notified of any hearing, if

ordered, and will receive a copy of any notice or order issued in the

matter. After said date, the application(s) and/or declaration(s), as

filed or as amended, may be granted and/or permitted to become

effective.

Consolidated Natural Gas Company, et al. (70-7508)

Consolidated Natural Gas Company (``CNG'') a registered holding

company, and its wholly-owned subsidiary company, CNG Financial

Services, Inc. (``CNGF''), both located at CNG Tower, 625 Liberty

Avenue, Pittsburgh, Pennsylvania 15222-3199, have filed an application-

declaration under Sections 6(a), 7, 9(a), 10, 12(b), 12(c) and 13 of

the act and Rules 42, 43, 45 and 87-90 thereunder.

CNG and CNGF request authorization, through December 31, 1998, for

CNGF to finance the purchase of certain gas utilizing equipment (``Gas

Equipment'')\1\ by creditworthy\2\ customers who purchase or may be

expected to purchase gas directly or indirectly from the local

distribution companies (``LDCs''), gas marketing or gas pipeline

subsidiaries of the CNG system. In addition, CNG seeks authorization to

provide CNGF with up to an aggregate of $25 million in funds, on a

revolving basis, through December 31, 1998, to enable CNGF to make Gas

Equipment financing loans to such customers. CNGF may obtain funds from

CNG through this day by (1) selling CNGF common stock. $10,000 par

value, to CNG, and/or (2) obtaining open account advances from CNG and/

or (3) obtaining long-term loans from CNG.

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\1\The Gas Equipment to be financed would fall into one or more

of the following categories: (1) Standard Gas Appliances -- the type

of standard gas appliances contemplated by Rule 48, including such

gas equipment as ranges, dryers, waterheaters and furnaces: (2) New

Technology Equipment -- gas equipment marketed to promote new or

unfamiliar technology that uses gas as a fuel (which could include

equipment using existing technology designed for a new application),

such as gas heat pumps, gas air conditioning and gas turbines; (3)

Alternate Fuel Equipment -- gas equipment that enables an end-user

to use natural gas as an alternative to another fuel; such equipment

would include both conversion equipment necessary to convert non-gas

utilizing equipment to equipment that can use gas as a fuel (e.g.,

energy connective apparatus enabling a coal-burning boiler to use

gas as a fuel) and gas utilizing equipment that is manufactured and

sold as a complete indivisible unit (e.g., compact gas generators).

\2\A customer would be deemed creditworthy if it had asset and

equity strength indicating a degree of expected liquidity and good

financial management. Such a condition would lead CNGF to believe

there exists a reasonable degree of probability that the Gas

Equipment financing loan would be repaid at maturity.

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Open account advances made to CNGF will be made by book entry only,

not evidenced by short-term notes, and will bear the same interest rate

as open account advances made to participants in the CNG System Money

Pool, which is equal to the effective weighted average rate of interest

on CNG's commercial paper and/or revolving credit borrowing. All such

advances will be payable on demand and may be prepaid at any time

without premium or penalty. Long-term loans to CNGF will be evidenced

by long-term non-negotiable notes (which may be book entry) of CNGF

maturing over a period of time to be determined by the officers of CNG,

with the interest predicated on and substantially equal to CNG's cost

of funds for comparable borrowings by CNG. In the event that CNG has

not had recent comparable borrowings, the rates will be tied to the

Solomon Brothers, Inc. Bond Market Roundup, or to a comparable rate

index, on the date nearest to the time of takedown. All such loans may

be prepaid at any time without premium or penalty.

CNG states that it will obtain the funds it loans to CNGF through

internal cash generation, issuance of long-term debt securities as

authorized by Commission orders dated April 21, 1993 (HCAR No. 25800)

and April 14, 1994 (HCAR No. 26026), borrowings under a credit

agreement, as authorized by Commission orders dated March 28, 1991

(HCAR No. 25283) and September 9, 1992 (HCAR No. 25626), or through

other authorizations approved or to be approved by the Commission.

Applicants also seek authorization for CNGF, from time to time

through December 31, 1998, to purchase, at par from CNG, shares of

CNGF's $10,000 par value common stock previously sold to CNG to obtain

funds, as described above, to hold such required shares as treasury

shares and to resell such shares to CNG at par.

Applicants state that customers receiving loans (``Financing

Customers'') will come primarily from the commercial and/or industrial

sectors and will result mainly from contacts between CNG Systems LDCs

and their end-use customers.\3\ CNGF proposes to conduct its Gas

Equipment financing activities both within and outside of the four

states of Virginia, West Virginia, Pennsylvania and Ohio where the CNG

System LDC's are located (collectively, ``LDC States''). However,

applicants state that during the twelve-month period beginning on the

first day of January in the year following the date CNGF commences Gas

Equipment financing activities pursuant to a Commission order issued in

the matter, and for each subsequent calendar year thereafter, the total

dollar value of Gas Equipment financing loans made to Financing

Customers in the LDC States will exceed the total dollar value of Gas

Equipment financing loans made to Financing Customers in all other

states.

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\3\CNGF will not act as a representative of any gas equipment

manufacturer or supplier but may recommend specific manufacturers or

types of gas equipment to end-users. For example, a CNG System LDC

marketing representative may recommend to a glass manufacturing

company that a new type of gas equipment be installed in a furnace

to increase production efficiency.

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CNGF will provide Gas Equipment financing to Financing Customers by

(1) making short-term loans to cover the period of installation of the

Gas Equipment until permanent financing can be obtained by the customer

or (2) making long-term loans for a period of time not to exceed the

lesser of 10 years or the expected useful life of the equipment. The

aggregate amount of Gas Equipment financing loans by CNGF outstanding

at any one time will not exceed $25,000,000, with an individual

customer financing limit of $5,000,000 at any one time.

Loans to Financing Customers may be secured or unsecured and will

be made at a spread above the cost of funds from CNG in order to cover

CNGF's costs and earn a return on its capital. CNGF does not have any

full-time employees, and Applicants expect CNGF to obtain accounting,

credit, financial, management, marketing, operating, technical and

clerical support, at cost, from CNG Service Company (``Service

Company'') pursuant to a written service agreement.

For the Commission, by the Division of Investment Management,

pursuant to delegated authority.

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 94-30916 Filed 12-15-94; 8:45 am]

BILLING CODE 8010-01-M