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

SECURITIES AND EXCHANGE COMMISSION

[Release No. 35-26370]

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

Amended (``Act'')

September 8, 1995.

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 October 2, 1995, to the Secretary, Securities and Exchange

Commission, Washington, D.C. 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 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.

Central Power and Light Company (70-7572)

Central Power and Light Company (``CPL''), 539 N. Carancahua

Street, Corpus Christi, Texas 78401-2431, an electric utility

subsidiary company of Central and South West Corporation, a registered

holding company, has filed a post-effective amendment to its

application under sections 9(a) and 10 of the Act and rule 54

thereunder.

By order dated April 13, 1989 (HCAR No. 24863), (``1989 Order''),

the Commission authorized CPL to lease to nonaffiliated third parties:

(1) Approximately 23,400 square feet of excess space on the first two

floors of its corporate headquarters building (``Headquarters

Building''); (2) approximately 17,800 square feet of excess space on

the third and fourth floors, in the basement and on the roof of the

Headquarters Building; and (3) space in one of its former office

buildings (``Other Building'') pending eventual sale of the Other

Building.

CPL now requests authority to lease any existing or future excess

space in the Headquarters Building to unaffiliated third parties at

what CPL considers to be market rates for such space at the time of

entering such leases. CPL also requests authority to lease several of

its other rentable properties or portions thereof (``other

Properties'') to unaffiliated third parties until such properties are

sold or are again put into use by CPL at what CPL considers to be

market rates for the Other Properties at the time of entering such

leases. The Other Properties shall include the following types of

properties: (1) Area or regional offices, which typically consist of

less than 10,000 square feet; (2) service centers which include office

and warehouse facilities and which typically consist of less than

20,000 square feet; (3) district or regional offices, which typically

consist of less than 20,000 square feet; (4) excess capacity in CPL

training facilities; miscellaneous facilities which are being held for

future use or sale and which typically consist of less than 10,000

square feet; and (5) other improved and unimproved land. All rental

payments from nonaffiliated third parties for excess space in the

Headquarters Building and the Other Properties are, and in the future

will be, accounted for as rent from property devoted to electric

operations.

Jersey Central Power & Light Company, et al. (70-7862)

Jersey Central Power & Light Company (``JCP&L''), 300 Madison

Avenue, Morristown, New Jersey 07460, Metropolitan Edison Company

(``Met-Ed'') and Pennsylvania Electric Company (``Penelec''), 2800

Pottsville Pike, Reading, Pennsylvania 19605 (collectively, ``GPU

Companies''), electric utility subsidiaries of General Public Utilities

Corporation, a registered holding company, have filed a post-effective

amendment to their application under sections 9(a) and 10 of the Act

and rule 54 thereunder.

By order dated August 15, 1991 (HCAR No. 25361), (``1991 Order''),

the Commission, among other things, authorized JCP&L, Met-Ed and

Penelec to enter into separate fuel lease agreements and to establish

related financing arrangements to provide for the acquisition of

nuclear fuel and certain related services for the Three Mile Island

Unit 1 nuclear generating station (``TMI-1'') and the Oyster Creek

nuclear generating station (``Oyster Creek''). The GPU Companies

jointly own TMI-1 in the following percentages: Met-Ed--50%; JCP&L--

[[Page 47796]]

25%; and Penelec--25%. JCP&L owns a 100% interest in Oyster Creek. TMI-

1 and Oyster Creek are operated and maintained on behalf of the GPU

Companies by GPU Nuclear Corporation, a subsidiary of GPU.

Pursuant to the 1991 Order, a nuclear fuel trust (``Fuel Trust'')

was established in accordance with a trust agreement under which United

States Trust Company of New York acts as trustee. The Fuel Trust is the

sole stockholder of two nonaffiliated Delaware corporations, TMI-1 Fuel

Corporation and Oyster Creek Fuel Corporation (collectively, ``Fuel

Companies'') which own certain nuclear fuel assemblies and component

parts (``Nuclear Material'') for use at TMI-1 and Oyster Creek,

respectively. The GPU Companies have entered into separate lease

agreements (``1991 Lease Agreements'') by which TMI-1 Fuel Corporation

leases Nuclear Material for TMI-1 to the GPU Companies in proportion to

their respective undivided ownership interests in TMI-1, and Oyster

Creek Fuel Corporation leases Nuclear Material for Oyster Creek to

JCP&L. In connection with the 1991 Lease Agreements, The Prudential

Life Insurance Company of America and certain of its affiliates entered

into lending agreements to provide for borrowings by the Fuel Companies

of up to a total of $250 million to finance the acquisition costs of

Nuclear Material under such lease agreements.

The GPU Companies now propose to enter into an agreement

(``Agreement'') with Union Bank of Switzerland, New York Branch

(``UBS'' or ``Agent'') for UBS to provide a new credit facility

(``Facility''), which would provide for borrowings of up to $210

million by the Fuel Companies from UBS and other lenders for which UBS

would act as Agent (collectively, ``Lenders''). The Fuel Companies will

enter into one or more Facilities providing for aggregate borrowings of

up to $210 million and under which: (1) letters of credit (``LC's'')

would be issued by UBS, as Agent, to provide credit enhancement for

commercial paper to be issued by the Fuel Companies and (2) revolving

credit loans would be made by the Lenders to the Fuel Companies. In

addition, the 1991 Lease Agreements would be amended and/or restated in

certain respects consistent with the establishment of the Facilities.

Under the Facility, the Fuel Companies would issue and sell their

commercial paper from time-to-time to finance acquisition costs of

Nuclear Material. To reduce borrowing costs, the Fuel Companies'

commercial paper credit would be enhanced through the issuance by UBS

of LC's in an aggregate face amount of up to $210 million outstanding

at any time, subject to the following sublimits: (1) JCP&L--$127.5

million; (2) MetEd--$55 million and (3) Penelec--$27.5 million. The

commercial paper would be evidenced by commercial paper notes (``CP

Notes''). Under the Agreement, the Fuel Companies would enter into

separate credit agreements (``New Credit Agreements'') pursuant to

which the Agent would issue its LC's and each Fuel Company would agree

to reimburse the Lenders for related drawings.

The Fuel Companies would also be entitled to borrow directly under

the Facility in lieu of issuing CP Notes. To evidence its obligations

to repay direct borrowings, each Fuel Company will issue and sell to

the Lenders its promissory notes (``New Notes''). The aggregate

principal amount of New Notes outstanding at any time would not exceed

the lesser of: (1) $210 million less the outstanding principal amount

of CP Notes and (2) the Stipulated Casualty Value of all Nuclear

Material, as defined in the 1991 Lease Agreements, under lease at such

time, less the outstanding principal amount of CP Notes. The Facility

would have an initial term of three years, renewable on the first

anniversary and on each anniversary thereafter.

The New Notes would be secured on the same basis as the existing

notes issued in connection with the 1991 Lease Agreements and would

bear interest at either an Alternative Base Rate or a Eurodollar Rate.

The Alternative Base Rate is a fluctuating annual rate equal to the

higher of: (1) The Agent's publicly announced prime rate and (2) 50

basis points above the rate on overnight federal funds transactions

with members of the Federal Reserve System arranged by Federal funds

brokers. Eurodollar Rate Notes would bear interest at the Eurodollar

Rate plus the Applicable Margin, as defined, and would be fixed at the

Fuel Company's option for interest periods of 1, 2, 3 or 6 months. The

Eurodollar Rate is defined as the annual interest rate for deposits in

U.S. dollars as reported in the Dow Jones Telerate system or if such

rate is not reported, at the LIBOR rate, in each case for the two

business day period prior to the interest period. The Applicable Margin

would range from 27.5 to 65 basis points depending on the GPU Company's

senior secured long-term debt ratings.

Central Power & Light Co. (70-8677)

Central Power and Light Company (``CP&L''), 539 No. Carancahua St.,

Corpus Christi, Texas 78401, a wholly-owned electric utility subsidiary

company of Central and South West Corporation, 1616 Woodall Rodgers

Freeway, P.O. Box 660164, Dallas, Texas 75266-0164, a registered

holding company, has filed an application-declaration under sections

6(a), 7, 9(a), 10 and 12(d) of the Act and rules 44 and 54 thereunder.

CP&L seeks authorization through December 31, 1998, to incur

obligations in connection with the proposed issuance by Nueces County

Navigation District No. 1 (``Nueces'') and/or Guadalupe-Blanco River

Authority, Texas (``Guadalupe'') in one or more series of up to

$95,000,000 aggregate principal amount of Pollution Control Revenue

Bonds. Of this amount, up to $45,000,000 may be Pollution Control

Revenue Refunding Bonds (``Refunding Bonds'') and up to $50,000,000 may

be new money Revenue Bonds (``New Money Bonds''). The issuance by

Neuces and Guadalupe (``Issuers'') of New Money Bonds and Refunding

Bonds (collectively, ``New Bonds'') may be combined.

The purpose of the Refunding Bonds is to reacquire all or a portion

of four previously issued Pollution Control Revenue Bonds (``Old

Bonds''). The purpose of the New Money Bonds is to reimburse CP&L for

expenditures that qualify for tax-exempt financing or to provide for

current solid waste expenditures.

CP&L also seeks authority to manage interest rate risk or lower its

interest rate costs on any variable rate New Bond through the issue of

caps, floors, and collars during the life of the New Bonds.

The Old Bonds were issued to finance the acquisition and

improvements of air and water pollution control facilities at two

plants--the Barney M. Davis Power Station and the Coleto Creek

generating plant--operated by CP&L. The Old Bonds were issued pursuant

to Indentures of Trust (``Indentures'') with two banks as trustees,

NationsBank of Texas, N.A. and Texas Commerce Bank--Dallas, N.A.

(``Trustees''), and had the following terms:

------------------------------------------------------------------------

First

Series Interest Maturity redemption

rate date date

------------------------------------------------------------------------

1974A.................................. 7\1/8\% 6/1/04 6/1/84

1974B.................................. 7\1/8\% 6/1/04 6/1/84

1977................................... 6% 11/1/07 11/1/87

1977A.................................. 6% 11/1/07 11/1/87

------------------------------------------------------------------------

CP&L and the Issuers entered into installment sales agreements

(``Sale Agreements'') for the issuance of the Old Bonds. In connection

with the issuance of the New Bonds, CP&L will

[[Page 47797]]

amend the Sale Agreements, enter into agreements with substantially the

same terms, and/or enter into new installment sale agreements

(collectively, ``Amended Sale Agreements'').

The New Bonds will bear a fixed or floating interest rate, may be

secured with First Mortgage Bonds, and will mature in not more than

forty years. The interest rate, redemptions provision and other terms

applicable to the New Bonds will be determined in negotiations between

CP&L and one or more investment banking firms that will purchase or

underwrite (``Purchasers'') the New Bonds.

CP&L anticipates that the New Bonds will be redeemable at its

option upon the occurrence of various events specified in the Amended

Sale Agreements and the Indentures, which might be amended or

supplemented (``Supplemental Indentures''), or a new indenture (``New

Indenture''). The New Bonds will be subject to optional redemption with

premiums to be determined by negotiations between CP&L and the

Purchasers, and will be subject to mandatory redemption if the interest

on the New Bonds becomes subject to federal income tax.

CP&L may obtain a credit enhancement for the New Bonds, which would

include bond insurance, a letter of credit or a liquidity facility.

CP&L anticipates it may be required to provide credit enhancement if it

issues floating rate bonds. A premium or fee would be paid for the

credit enhancement, which would still result in a net benefit through a

reduced interest rate on the New Bonds. CP&L will not provide credit

enhancement unless it is economically beneficial.

CP&L also seeks authority to issue First Mortgage Bonds as security

for the New Bonds, subject to applicable indenture restrictions under a

Supplemental Indenture to its Mortgage Indenture dated November 1, 1943

to the First National Bank of Chicago and A.H. Bohm (``Mortgage

Indenture''). The First Mortgage Bonds will be held by the Trustee for

the New Bonds for the benefit of the New Bonds holders and will not be

transferable, except to a successor trustee. The First Mortgage Bonds

will be issued in the exact amount and with substantially the same

terms as the New Bonds. To the extent payments in respect of the New

Bonds are made in accordance with their terms, corresponding payment

obligations under the First Mortgage Bonds will be deemed satisfied.

The redemption, sinking fund, and dividend provisions of the First

Mortgage Bonds may deviate from the Statement of Policy Regarding First

Mortgage Bonds. CP&L anticipates that the New Bonds will be sold by the

Issuers pursuant to a Bond Purchase Agreement (``Purchase Agreement'')

between the Issuers and one or more Purchasers.

The proceeds of the New Bonds will be used to redeem the Old Bonds

pursuant to the terms of the Indentures (``Redemption'') and reimburse

CP&L for expenditures made that qualify for tax-exempt financing or to

provide for current solid waste expenditures. The proceeds of any

offering also may be used to reimburse CP&L for Old Bonds previously

acquired. Additional funds required to pay for the Redemption and the

costs of issuance of the New Bonds will be provided by CP&L from

internally generated funds and short-term borrowings.

CP&L believes that the Redemption of the Old Bonds and the issuance

of floating rate Refunding Bonds could result in substantial savings

and benefit ratepayers. Whether or not net present value savings are

available, CP&L proposes to refund the Series 1974A and the Series 1977

Bonds to eliminate the sinking fund requirement so that the current

amount of tax-exempt bonds outstanding will be maintained. CP&L also

proposes to refund the Series 1974B and the Series 1977A Bonds to

achieve savings from consolidating several series of bonds into one or

two series.

New England Electric System, et al. (70-8679)

New England Electric System (``NEES''), a registered holding

company, and its subsidiary companies, Massachusetts Electric Company

(``Mass. Electric''), New England Electric Transmission Corporation

(``NEET''), Narragansett Energy Resources Company (``NERC''), New

England Energy Incorporated (``NEEI''), New England Hydro-Transmission

Electric Company, Inc. (``Mass. Hydro''), New England Hydro-

Transmission Corporation (``NH Hydro''), New England Power Company

(``NEP''), and New England Power Service Company (``NEPSCO''), all of

25 Research Drive, Westborough, Massachusetts 01582, Granite State

Electric Company, 33 West Lebanon Road, Lebanon, New Hampshire 03766,

and The Narragansett Electric Company (``Narragansett''), 280 Melrose

Street, Providence, Rhode Island 02901, (collectively, ``Applicants'')

have filed an application-declaration under sections 6(a), 7, 9(a), 10,

and 12(b) of the Act and rules 43 and 45 thereunder.

The subsidiaries noted below (``Borrowing Companies'') propose,

from November 1, 1995 to October 31, 1997, to borrow from the NEES

intrasystem money pool (``Money Pool'') and/or banks, and/or, in the

case of Mass. Electric, Narragansett, and NEP, through the issuance of

commercial paper up to the following amounts:

Granite................................................. $10,000,000

Mass. Electric.......................................... 150,000,000

Narragansett............................................ 100,000,000

NEET.................................................... 10,000,000

Mass. Hydro............................................. 25,000,000

NH Hydro................................................ 25,000,000

NEP..................................................... 375,000,000

NEPSCO.................................................. 25,000,000

---------------

Total............................................. 720,000,000

The proceeds from the borrowings will be used: (i) to pay

outstanding notes to banks and/or commercial paper dealers and/or

borrowings from the Money Pool; (ii) to provide new money, and/or to

reimburse the treasury, for capital expenditures; and (iii) for other

corporate purposes relating to ordinary business operations, including

working capital and the financing of construction and property

acquisitions.

Applicants request authority to lend to the Money Pool from surplus

funds that may be available in their treasuries. Loans by the Money

Pool to the Borrowing Companies may or may not be evidenced by notes.

The interest rate for such loans will be 108% of the monthly average of

the rate for high grade 30-day commercial paper sold through dealers by

major corporations as published in the Wall Street Journal. Although

there are no stated maturities, Money Pool loans are payable on demand

and may be prepaid without penalty.

Applicants state that bank loans will be evidenced by notes

maturing less than one year from date of issuance, with a negotiated

interest rate. Fees will be paid to the banks in lieu of compensating

balance arrangements. The effective interest cost of bank loans will

not exceed the greater of the bank's base or prime lending rate or the

rate published in the Wall Street Journal as the high federal funds

rate, plus, in either case, one percent. Some bank borrowings may be

without prepayment privileges. Payment of any short-term promissory

notes prior to maturity will be made on the basis most favorable to the

Borrowing Companies, taking into account fixed maturities, interest

rates, and any other relevant financial considerations.

Mass. Electric, Narragansett, and NEP also propose to issue and

sell commercial paper to one or more nationally recognized commercial

paper dealers (``CP Dealer''). Initially, the CP Dealer will be CS

First Boston

[[Page 47798]]

Corporation and/or Merrill Lynch Money Markets Incorporated.

The effective interest cost to the issuer of commercial paper will

generally not exceed the effective interest cost of the base lending

rate at the First National Bank of Boston. However, the effective

interest cost of such paper is based on the supply of, and demand for,

that and similar paper at the time of sale, and interest costs have

from time to time exceeded bank base rates. While it is not anticipated

that the effective annual cost of borrowing through commercial paper

will exceed the annual base rate borrowing from the First National Bank

of Boston, commercial paper may be issued with a maturity of not more

than 90 days with an effective cost in excess of the then-existing

lending rate.

For the Commission, by the Division of Investment Management,

pursuant to delegated authority.

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 95-22844 Filed 9-13-95; 8:45 am]

BILLING CODE 8010-01-M