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

SECURITIES AND EXCHANGE COMMISSION

[Release No. 35-26264]

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

Amended (``Act'')

March 31, 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 April 24, 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.

Indiana Michigan Power Company (70-6458)

Indiana Michigan Power Company (``I&M''), One Summit Square, P.O.

Box 60, Fort Wayne, Indiana 46801, an electric utility subsidiary of

American [[Page 17841]] Electric Power Company, Inc. (``AEP''), a

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

application-declaration under Sections 9(a), 10 and 12(d) of the Act

and Rule 44(b) thereunder.

By order dated June 11, 1980 (HCAR No. 21618), I&M was authorized

to dispose of and acquire certain pollution control systems

(``Project'') at its Rockport Generating Station (``Plant''), under

construction near the City of Rockport in Spencer County, Indiana

(``City'') to comply with Indiana environmental control standards.

I&M's disposition and acquisition was undertaken under an Agreement of

Sale with the City, dated June 1, 1980, and in connection with the

issuance by the City of pollution control revenue bonds in the amount

of $40 million to finance the project (HCAR No. 21642, June 25, 1980).

This represented a portion of I&M's then estimated cost of $150 million

for its 50% obligation for the Project shared with AEP Generating

Company.

By order dated December 4, 1984 (HCAR No. 23514), the Commission

authorized I&M to enter another Agreement of Sale with the City

providing for the disposition and acquisition of the Project in

connection with the issuance by the City of $110 million principal

amount of pollution control bonds (``Series 1984A Bonds'') to finance

the Project (HCAR No. 23528, December 12, 1984). By order dated August

2, 1985 (HCAR No. 23781), the Commission authorized I&M to enter into a

First Amendment to Agreement of Sale with the City providing for the

issuance and sale of three additional series of pollution control bonds

(``Series 1985 Bonds''), each in the principal amount of $50 million

with a maturity of August 1, 2014. The second series of the Series 1985

Bonds consists of adjustable rate bonds bearing interest at a rate

which is adjusted every five years based upon an index and payable

semiannually (``Adjustable Rate Bonds'').

I&M now proposes to cause the City to issue and sell a series of

refunding bonds (``Refunding Bonds'') in the aggregate principal amount

of $50 million with an interest rate adjustment, as determined by I&M.

The proceeds of Refunding Bonds will be used to redeem the Adjustable

Rate Bonds. I&M could convert the interest rate on the Refunding Bonds

between the various modes from changing daily to fixed for a term up to

maturity. The Refunding Bonds will be issued under and secured by the

Indenture and a sixth supplemental indenture and will mature at a date

or dates not more than forty years from the date of issuance.

In connection with the issuance of the Refunding Bonds, I&M may

enter into one or more interest rate hedging arrangements, including an

interest rate swap, cap, collar, or similar agreement (collectively

``Hedging Facility'') with a bank or other financial institution

(``Counterparty''). The Hedging Facility will be an interest rate

conversion agreement designed to allow I&M to actively manage and limit

its exposure to variable interest rates or to lower its overall

borrowing cost on any fixed rate Refunding Bond. The Hedging Facility

will set forth the specific terms upon which I&M will agree to pay the

Counterparty payments and/or fees for limiting its exposure to interest

rates or lowering its fixed rate borrowing cost, and the other terms

and conditions of any rights or obligations thereunder. I&M may provide

credit enhancement for the Refunding Bonds in the form of a letter of

credit, surety bond or bond insurance and pay any related fees.

West Penn Power Company (70-6505)

West Penn Power Company (``West Penn''), 800 Cabin Hill Drive,

Greensburg, Pennsylvania 15601, an electric public-utility subsidiary

company of Allegheny Power System, Inc., a registered holding company

has filed a post-effective amendment to its declaration under Sections

6(a) and 7 of the Act.

By order dated May 3, 1985 (HCAR No. 23679), West Penn was

authorized, among other things, to issue long-term promissory notes in

connection with the issuance of pollution control revenue bonds series

E (``Series E Bonds'') by the Washington County Development Authority

(``County'') up to an aggregate principal amount of $18 million. The

series E Bonds in the aggregate principal amount of $15.4 million were

issued by the County, maturing April 1, 2014, along with West Penn's

corresponding promissory note for $15.4 million. The proceeds of the

Series E Bonds were applied by West Penn to the payment at maturity of

the series D bonds and to the costs of issuance.

Due to changes in interest rates, the County proposes to refund the

Series E Bonds by issuing a new series of pollution control revenue

bonds (``Series G Bonds''). The County proposes to issue $15.4 million

aggregate principal amount of Series G Bonds maturing on the

corresponding day in the year 2014 that they are issued in 1995. The

proceeds from the sale of the Series G Bonds will be used to refund

Series E Bonds. The Series G Bonds will be issued under a supplemental

trust indenture with a corporate trustee (``Trustee''), approved by

West Penn, and will be sold at such time, interest rate, maturity and

price as approved by West Penn pursuant to market conditions.

West Penn proposes to issue concurrently with the issuance of the

Series G Bonds, its non-negotiable Pollution Control Note (``Note''),

at any time on or before December 31, 1997, with terms and conditions

corresponding to the Series G Bonds in respect to principal amount,

interest rates and redemption provisions and having installments of

principal corresponding to any mandatory sinking fund payments and

stated maturities. Market conditions prevailing at the time of the

offering may warrant the issuance of the Series G Bonds with floating

interest rates during all or a portion of the stated life of the Series

G Bonds. However, West Penn does not anticipate that to be the case.

West Penn proposes that should it determine to use a floating interest

rate, it will notify the Commission.

The Note will be secured by a second lien on the equipment and

facilities at West Penn's Mitchell Power Station in Washington County

(``Facilities'') and certain other properties, pursuant to the Mortgage

and Security Agreement delivered by West Penn to the Trustee creating a

mortgage security interest in the Facilities and certain other

property. Payment on the Note will be made to the Trustee under and

indenture and applied by the Trustee to pay the maturing principal and

redemption price of and interest and other costs on the Series G Bonds

as they become due. West Penn proposes to pay any Trustees' fees or

other expenses incurred by the County.

American Electric Power Company, Inc., et al. (70-7022)

American Electric Power Company, Inc. (``AEP''), a registered

holding company, and AEP Generating Company (``Generating''), an

electric public-utility subsidiary of AEP, both of 1 Riverside Plaza,

Columbus, Ohio 43215, have filed a post-effective amendment to their

application-declaration filed under sections 9(a), 10, 12(b) and 12(d)

of the Act and rules 44 and 45 thereunder.

By order dated August 17, 1984 (HCAR No. 23399), Generating

acquired a \1/2\ undivided interest in the Rockport Generating Station

(``Plant'') with Indiana & Michigan Electric Company, now Indiana

Michigan Power Company (``I&M''), also a subsidiary of AEP, including

responsibility for 50% of the costs associated with acquiring certain

[[Page 17842]] air and water pollution control devices (``Project'').

By order dated October 4, 1984 (HCAR No. 23445) (``October 1984

Order''), Generating was authorized to enter into an Agreement of Sale

(``Agreement'') with the City of Rockport, Indiana (``City'') providing

for the construction and installation of the Project by the City, and

the issuance by the City of pollution control revenue bonds (``Series

1984 A Bonds'') to finance Generating's share of the Project. The

October 1984 Order authorized the issuance of the Series 1984 A Bonds

in a principal amount of $150 million.

The October 1984 Order contemplated that the proceeds of the sale

of the Series 1984 A Bonds would be deposited by the City with Lincoln

National Bank and Trust Company of Fort Wayne, as trustee under an

Indenture of Trust (``Indenture'') dated as of October 1, 1984 between

the City and Lincoln National Bank & Trust Company (now Norwest Bank

Fort Wayne, N.A.), as trustee (``Trustee'') between the City and such

Trustee, pursuant to which the Series 1984 A Bonds are to be issued and

secured. The October 1984 Order also contemplated that such proceeds

would be applied to payment of the cost of construction of the project.

The Agreement also provided for the sale of the Project to Generating,

the payment by Generating of the purchase price of the Project, and the

assignment and pledge to the Trustee of the City's interest in, and of

the monies receivable by the City under the Agreement.

The Agreement also provided that each installment of the purchase

price for the Project payable by Generating would be in such amount

(together with other monies held by the Trustee under the Indenture for

that purpose) as would enable the City to pay, when due and payable,

(i) the interest of the Series 1984 A Bonds, any additional bonds and

any refunding bonds, (ii) the principal amount of the Series 1984 A

Bonds, any additional bonds and any refunding bonds payable at the time

of their respective stated maturities and (iii) amounts, including any

accrued interest, payable in connection with any mandatory redemption

of the Series 1984 A Bonds, any additional Bonds or any refunding

bonds. In addition, the October 1984 Order reserved jurisdiction ``with

respect to the fees and commissions to be incurred by [Generating] and

AEP in connection with this transaction, and the terms of sale under

the Agreement.''

By order dated September 6, 1985 (HCAR No. 23821) (``1985 Order''),

Generating was authorized to enter into a First Amendment to Agreement

of Sale (``1985 Agreement'') with the City providing for the issuance

and sale of three additional series of pollution control bonds

(collectively, ``Series 1985 Bonds''), each in the principal amount of

$55 million with a maturity of September 1, 2014. One series of the

Series 1985 Bonds was issued with a variable interest rate (``Variable

Rate Bonds'') the rate of which was based upon an index and not to

exceed 12% per annum, determined weekly and payable monthly. A second

series of the Series 1985 Bonds was issued with the interest payable

semi-annually at a rate which will be adjusted every five years based

upon an index (``Adjustable Bonds''). A third series of the Series 1985

Bonds was issued with the interest rate fixed at 9\3/8\% per annum,

payable semi-annually (``Fixed Rate Bonds''), and these Fixed Rate

Bonds were issued subject to optional redemption following an initial

period not to exceed ten years. The proceeds of the Series 1985 Bonds

were used to cover a portion of the cost of construction of the Project

and to refund the outstanding short-term Series 1984 A Bonds in the

principal amount of $150 million. The 1985 Order included no

reservation of jurisdiction.

AEP and Generating now propose that Generating enter into a Second

Amendment to Agreement of Sale (``1995 Agreement'') with the City

whereby the City will issue and sell one or more additional series of

Pollution Control Revenue Refunding Bonds (``Refunding Bonds'') in the

aggregate principal amount of up to $110 million with an interest rate

adjustment (as determined by Generating). Generating could convert the

interest rate on the Refunding Bonds between the various modes from

changing daily to fixed for a term up to maturity. It is stated that

the proceeds of such Refunding Bonds will be used to redeem the Fixed

Rate Bonds and the Adjustable Bonds.

In connection with the issuance of the Refunding Bonds, Generating

proposes to enter into one ore more interest rate hedging arrangements

(including an interest rate swap, cap, collar or similar agreement)

(``Hedging Facility'') with a bank or other financial institution

(``Counterparty''). The Hedging Facility will be an interest rate

conversion agreement designed to allow Generating to actively manage

and limit its exposure to variable interest rates or to lower its

overall borrowing cost on any fixed rate Refunding Bond. The Hedging

Facility will set forth the specific terms upon which Generating will

agree to pay the Counterparty payments and fees for limiting its

exposure to interest rates or lowering its fixed rate borrowing cost,

and the other terms and conditions of any rights or obligations

thereunder. The terms of each Hedging Facility would be negotiated by

Generating with the respective Counterparty and would be the most

favorable terms that can be negotiated by Generating.

The Refunding Bonds will be issued pursuant to the Indenture

between the City and the Trustee (now Norwest Bank Fort Wayne, N.A.),

as supplemented by a Fifth Supplemental Indenture of Trust between the

City and the Trustee (``Supplemental Indenture'') and the 1995

Agreement. Pursuant to the Indenture and the Fifth Supplemental

Indenture, the proceeds of the sale of the Refunding Bonds will be

deposited with the Trustee and applied by the Trustee, together with

other funds supplied by Generating, to the redemption of: (i) The Fixed

Rate Bonds at a price of 102% of the principal amount thereof; and (ii)

the Adjustable Bonds at a price equal to their principal amount.

While Generating will not be a party to the underwriting

arrangements for the Refunding Bonds, the 1995 Agreement provides that

the Refunding Bonds shall have such terms as shall be specified by

Generating. Generating understands that interest on the Refunding Bonds

will be exempt from Federal income taxation under the provisions of

section 103 of the Internal Revenue Code of 1986, as amended (except

for interest on any Refunding Bond during a period in which it is held

by a person who is a substantial user of the Project or a related

person).

It is expected that the Refunding Bonds will mature at a date or

dates not more than 40 years from the date of their issuance. The

Refunding Bonds may be subject to mandatory or optional redemption

under circumstances and terms specified at the time of pricing or

change in interest rate. In addition, the Refunding Bonds may not, if

it is deemed advisable, be redeemable at the option of the city in

whole or in part at ant time for a period to be determined at the time

of pricing or change in interest rate of the Refunding Bonds. It is

stated that no Refunding Bond may bear interest at an initial interest

rate higher than 9%.

It is stated that no series of Refunding Bonds will be issued at

rates in excess of those generally obtained at the time of pricing for

sales of substantially similar tax-exempt bonds (having the same

maturity, issued by entities of comparable credit quality and having

similar terms, conditions and features). [[Page 17843]]

In connection with an adjustment in the interest rate, the

Refunding Bonds may be tendered, or may be deemed to be tendered, to

the Trustee, by the owners thereof. Generating intends to remarket any

Refunding Bonds so tendered through a remarketing agent, and may have a

Liquidity Provider back up Generating's obligations. The Refunding

Bonds will be subject to redemption at the direction of Generating

under certain circumstances.

AEP and Generating also propose that Generating provide some form

of credit enhancement for the Refunding Bonds, a letter of credit,

surety bond or bond insurance, and Generating may pay a fee in

connection therewith. In addition, Generating may provide for a

Liquidity Provider for interest payments, remarketing, redemption or

maturity of the Refunding Bonds. Any letter of credit would not exceed

$130 million.

The type of credit enhancement may change while the Refunding Bonds

are outstanding. Unreimbursed drawings under the letter of credit would

bear interest at not more than 2% above the bank's prime rate.

Generating may pay an annual or up-front fee for the credit enhancement

which would not exceed 1.25% annually of the face amount.

In addition, AEP and Generating propose that AEP guarantee payment

of the principal of, premium, if any, and interest on the Refunding

Bonds pursuant to a guaranty agreement (``Guaranty'') to be executed

and delivered to the Trustee and the City. Under a Guaranty, AEP would

unconditionally guarantee the obligations of Generating under the 1995

Agreement.

The Refunding Bonds could be payable from funds drawn under an

irrevocable letter of credit, bond insurance policy, Standby Bond

Purchase Agreement or other comparable obligation of a third party.

Generating will not agree to the issuance of any Refunding Bond by

the City if: (i) The stated maturity of any such Bond shall be more

than 40 years; (ii) the discount from the initial public offering price

of any such Bond shall exceed 5% of the principal amount thereof; or

(iii) the initial public offering price shall be less than 95% of the

principal amount thereof. Generating will not enter into the proposed

refunding transaction unless the estimated present value savings

derived from the net difference between interest payments on a new

issue of comparable securities and on the securities to be refunded is,

on a after tax basis, greater than the present value of all redemption

and issuing costs, assuming an appropriate discount rate. The discount

rate used shall be the estimated after-tax interest rate on the

Refunding Bonds to be issued.

AEP and Generating state that the transactions described above will

be consummated no later than December 31, 1996.

EUA Energy Investment Corporation (70-8585)

EUA Energy Investment Corporation (``EEIC''), P.O. Box 2333,

Boston, Massachusetts, 02107, a wholly owned subsidiary of Eastern

Utilities Associates (``EUA''), a registered holding company, has filed

an application-declaration under sections 6(a), 7, 9(a), 10, 12 and

13(b) of the Act and rules 43, 45, 87, 90 and 91 thereunder.

EEIC proposes to incorporate a Massachusetts business corporation

(``EEIC Subsidiary'') to be the general partner of a proposed joint

venture limited partnership to be formed under Massachusetts law

(``Home & Family''). EEIC Subsidiary, through Home & Family, intends to

develop and commercialize, a home environmental audit and environmental

remediation business including, but not limited to, home environmental

testing of soil, air, water and substances found in or about the home

and the remediation of home environmental problems (the ``Business

Opportunity'').

EEIC, together with Home & Family Limited Partnership, a

Massachusetts limited partnership (``H&F LP''), is developing certain

trademarks, packaging designs, marketing materials, copyrighted

materials, business plans and other materials relating to the Business

Opportunity (``Proprietary Materials''). EEIC owns all right, title and

interest in and to the Proprietary Materials. EEIC proposes to

contribute such Proprietary Materials to EEIC Subsidiary in exchange

for capital stock in EEIC Subsidiary. No other person or entity will

own stock in EEIC Subsidiary.

Upon (i) EEIC's receipt of Commission authorization, and (ii)

EEIC`s determination to proceed with the Business Opportunity following

successful completion of a research, development and test marketing

pilot program, H&F LP will contribute the name ``Home & Family,'' its

intellectual property and other proprietary materials to Home & Family

in exchange for a limited partner interest therein. EEIC, proposes to

then transfer the Proprietary Materials, with an agreed upon value of

$2,100,000, to Home & Family and to provide certain financing

(described below) to Home & Family in exchange for a general partner

interest therein.

The initial authorized capitalization of EEIC Subsidiary shall be

200,000 shares of common stock, $.01 par value per share, and EEIC will

be issued a portion of such common stock in exchange for its

contribution to EEIC Subsidiary of the Proprietary Materials.

References to EEIC hereinafter shall mean EEIC or EEIC Subsidiary,

where the context so allows.

EEIC proposes to make additional capital contributions to Home &

Family in an aggregate amount of up to $3,900,000 from time to time

through December 31, 1997, in exchange for which EEIC's capital

interest in Home & Family will increase correspondingly. In addition,

from time to time through December 31, 1997, EEIC also proposes, at its

discretion, to provide Home & Family with a working capital line of

credit with a maximum availability of $3,000,000, at an annual interest

rate equal to the base lending rate of The First National Bank of

Boston, N.A., plus 2 percent, for a term of three years. All such loans

and advances will be secured by all Home & Family assets, and will be

used by Home & Family exclusively for its working capital needs.

EEIC also proposes that any activities that it needs to perform

under certain agreements relating to the proposed transaction would be

accomplished by employees of EUA Service Corporation (``EUASC''). EUASC

may provide management services including but not limited to financial,

accounting, environmental, data processing and records management

services, as appropriate, to Home & Family. All such services would be

rendered at cost pursuant to the standard service contract entered into

between EUASC and the other EUA system companies. No employees of the

EUA system's retail electric utilities will be assigned to any

activities involving Home & Family.

The East Ohio Gas Company (70-8601)

The East Ohio Gas Company (``East Ohio''), 1717 East Ninth Street,

Cleveland, Ohio 44101-0759, a gas public-utility subsidiary of

Consolidated Natural Gas Company (``CNG''), 625 Liberty Avenue,

Pittsburgh, Pennsylvania 15222-3199, a registered holding company, and

CNG have filed a declaration under section 12(d) of the Act and rule 44

thereunder.

East Ohio and CNG propose that East Ohio sell certain utility

assets (``Assets''), including 378 production wells, connecting lines,

leases, access rights, contract rights and records associated with the

wells, to Belden & Blake Corporation (``Belden & Blake'') for $6.5

million. Belden & Blake is a [[Page 17844]] nonassociated oil and gas

drilling and exploration company.

East Ohio and CNG state that the sale of the Assets is part of East

Ohio's contribution towards the current effort of the CNG system to cut

costs and increase profits. East Ohio and CNG additionally state that,

as utility assets, the Assets provide less than \1/2\ of 1% of East

Ohio's total gas supply. Furthermore, by selling the Assets, East Ohio

will save about $900,000 a year in maintenance costs.

For the Commission, by the Division of Investment Management,

pursuant to delegated authority.

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 95-8542 Filed 4-6-95; 8:45 am]

BILLING CODE 8010-01-M