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

SECURITIES AND EXCHANGE COMMISSION

[Release No. 35-26530]

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

Amended (``Act'')

June 7, 1996.

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 July 1, 1996, 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

should 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.

New England Electric System (70-8819)

New England Electric System (``NEES''), 25 Research Drive,

Westborough, Massachusetts 05182, 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 45, 90 and 91 thereunder.

The Federal Energy Regulatory Commission (``FERC'') has recently

promulgated guidelines setting forth requirements for open and

comparable transmission access. In response, NEES seeks to establish a

subsidiary to be named NEES Transmission Services, Inc. (``NEES

Trans''), for the purpose of operating the transmission assets owned

by, or subject to the control of, NEES' utility subsidiaries (``NEES

Transmission Assets'').

In operating these assets, NEES will serve as the interface between

wholesale electric customers and the NEES transmission system as the

transmission service provider. NEES Trans will serve both associates

and nonassociates and will charge the same tariff to each. NEES Trans

will make no retail sales of electricity.

Rights to operational control over the NEES Transmission Assets

will be provided by a Transmission and Support Agreement

(``Agreement'') among NEES, NEES Trans, and NEES' utility subsidiaries

Massachusetts Electric Company (``MEC''), The Narragansett Electric

Company (``NERC''), Granite State Electric Company (together with MEC

and NEC, ``Retail Companies'') and New England Power Company (``NEP'').

Pursuant to the Agreement, NEES Trans will have operational control

over the NEES Transmission Assets only to the extent necessary to

accomplish a FERC-jurisdictional transmission transaction. The

Agreement also grants NEES Trans use of the distribution systems of the

Retail Companies as they may be needed to support wholesale

transactions.

NEES does not propose to transfer ownership of the NEES

Transmission Assets to NEES Trans at this time. However, NEES will have

the responsibility of planning the expansion of the transmission system

and will notify NEP of the need for additions to the system. NEES Trans

will have the obligation to expand transmission capacity as needed, to

arrange for NEES affiliates to license, engineer and construct the

necessary additions, and to provide operational services necessary to

maintain transmission system reliability.

NEES proposes to provide initial financing for NEES Trans by the

purpose of one thousand shares of common stock, par value $1.00 per

share, for a total purchase price of $1,000. NEES then proposes to make

capital contributions and/or loans to NEES Trans from time to time, in

amounts not to exceed $10 million in the aggregate outstanding at any

one time. Any such loans will be in the form of non-interest bearing

subordinated notes payable in twenty years or less from the date of

issue. NEES requests authority to make such investments through

December 31, 1999.

NEES Trans additionally seeks authority through October 31, 1997 to

borrow and lend money in the NEES Money Pool, the terms of which are

described in an order of the Commission dated October 25, 1995 (HCAR

No. 25399), and to borrow from banks on a short-term basis. NEES

proposes that NEES Trans have access to the NEES Money Pool on the same

priority as the Retail Companies. The aggregate principal amount of

debt outstanding under this authority will not at any time exceed $15

million. Amounts owed under the Money Pool would be payable on demand.

Amounts owned to banks for short-term borrowings would be payable

within one year.

The proceeds from the proposed borrowings are to be used (i) to pay

then outstanding notes initially issued to banks and/or borrowings from

the Money Pool and (ii) for other cooperate purposes relating to

ordinary business operations, including working capital, and funds to

cover timing differences in payments received and payments due.

NEES' utility subsidiaries and NEES' service company subsidiary,

New England Power Service Company, may assign certain technical and

support staff personnel to NEES Trans to work on NEES Trans operations.

Not more than two percent of the total employees of such companies

would be assigned to NEES Trans in any one year. All costs associated

with such staff (including compensation, overheads, and benefits) would

be fully reimbursed by NEES Trans in accordance with rules 90 and 91 of

the Act.

Central Power and Light Company, et al. (70-8869)

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

Street, Corpus Christi, Texas 78401-2802, Public Service Company of

Oklahoma (``PSO''), 212 East Sixth Street, Tulsa, Oklahoma 74119-1212,

and West Texas Utilities Company (``WTU''), 301 Cypress, Abilene, Texas

79601 (collectively, ``Applicants''), each a

[[Page 30267]]

wholly owned subsidiary company of Central and South West Corporation,

a registered holding company, have filed an application-declaration

under sections 6(a), 7, 9(a), 10 and 12(d) of the Act and rule 44

thereunder.

Applicants propose, through December 31, 1999, to: (i) incur

obligations in connection with the proposed issuance by Red River

Authority of Texas (``Red River'') of up to $113.3 million aggregate

principal amount of pollution control revenue bonds (``New Bonds'') in

one or more series; (ii) obtain credit enhancement for the New Bonds,

with could include bond insurance, a letter of credit or a liquidity

facility;\1\ (iii) issue first mortgage bonds (``First Mortgage

Bonds'') as security for the payment of the New Bonds; (iv) deviate

from the Commission's Statement of Policy Regarding First Mortgage

Bonds (``Statement of Policy'');\2\ and (v) use hedging products to

manage interest rate risk or lower their interest rate costs.

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\1\ Applicants anticipate that they would be required to pay a

premium or fee to obtain the credit enhancement.

\2\ HCAR No. 13105, as supplemented by HCAR No. 16369.

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Of the total aggregate principal amount of New Bonds to be issued,

(i) up to $63.3 million aggregate principal amount may be pollution

control revenue refunding bonds (``Refunding Bonds''), and (ii) up to

$50 million aggregate principal amount may be new money revenue bonds

(``New Money Bonds''). The issuance of New Money Bonds may be combined

with the issuance of Refunding Bonds.

The Refunding Bonds will be used to reacquire all or a portion of

$63.3 million of outstanding 7\7/8\ Pollution Control Revenue Bonds

Series 1984 issued by Red River (``Old Bonds'').\3\ The New Bonds will

be used to reimburse the Applicants' treasuries for any expenditures

made that qualify for tax-exempt financing or for current solid waste

expenditures.

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\3\ The Old Bonds may not be redeemed prior to their first

redemption date and thereafter may be redeemed at the then

applicable redemption price plus accrued interest to the redemption

date. The Old Bonds will be redeemable on September 15, 1996 at 103%

of principal amount.

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Applicants and Red River entered into an installment sale agreement

(``Sale Agreement'') to provide for the issuance of the Old Bonds. The

proceeds from the Old Bonds were used to acquire, construct and improve

certain air and water pollution control and solid waste disposal

facilities at the Oklaunion Electric Generating Plant, located near

Vernon, Texas, in which CPL, PSO and WTU own 7.8%, 15.6% and 54.7%

undivided interests, respectively. In connection with the issuance of

the New Bonds, Applicants will (i) amend or supplement the Sale

Agreement, (ii) enter into an agreement with substantially the same

terms as the Sale Agreement and/or (iii) enter into a new installment

sale agreement.

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

or may not be secured with First Mortgage Bonds and will mature in not

more than forty years. The interest rate, redemption provisions and

other terms and conditions applicable to the New Bonds will be

determined by negotiations between the Applicants and one or more

investment banking firms or other entities that will purchase or

underwrite the New Bonds (``Purchasers''). It is anticipated that: (i)

the New Bonds will be redeemable at any time in whole at the option of

the Applicants at the principal amount thereof plus accrued interest,

upon the occurrence of various extraordinary events specified in the

Amended Sale Agreement; (ii) the New Bonds will be subject to optional

redemption in whole or in part at times and with premiums to be

determined by negotiations between the Applicants and the Purchasers;

and (iii) the New Bonds will be subject to special mandatory

redemption, in whole or in part, at the principal amount thereof plus

accrued interest, in the event the interest on the New Bonds becomes

subject to federal income tax.

Pursuant to the Sale Agreement, Applicants transferred the

Facilities to Red River, which financed the acquisitions and related

costs thereof with the proceeds of the Old Bonds. The Sale Agreement

contains commitments by the Applicants to pay to Red River at specified

times amounts sufficient to enable Red River to pay debt service on the

Old Bonds, including principal, interest and redemption premium, if

any.

Applicants also request authority to issue First Mortgage Bonds as

security for the payment of the New Bonds, at its option, depending

upon market conditions at the time of issuance of the New Bonds. The

First Mortgage Bonds will be held by the Trustee solely for the benefit

of the holders of the New Bonds and will not be transferable except to

a successor Trustee. The First Mortgage Bonds will be issued in the

exact amounts and have substantially the same terms as the New Bonds.

Applicants also state that the First Mortgage Bonds and the New

Bonds may include: (i) up to a 15 year optional redemption limitation;

(ii) an omission of sinking fund provisions; and (iii) a limitation on

dividends to a percentage of net income available for dividends on

common stock if the Applicant's common stock equity is not maintained

at a certain percentage of total capitalization. Applicants request

that the Commission authorize these deviations from the Statement of

Policy.

The proceeds of the offering of the New Bonds will be used to: (i)

redeem the Old Bonds pursuant to the terms of the Indenture; and (ii)

reimburse the Applicant's treasuries for any expenditures made that

qualify for tax-exempt financing or to provide for current solid waste

expenditures. The proceeds of any offering may also be used to

reimburse the Applicants' treasuries for Old Bonds previously acquired.

Applicants may be required to deposit the proceeds of the New Bonds

with the Trustee in connection with the Redemption of the Old Bonds.

Any additional funds required to pay for the redemption of Old Bonds

and the costs of issuance of the New Bonds will be provided by the

Applicants from internally generated funds and short-term borrowings

pursuant to orders of the Commission dated March 31, 1993, September

28, 1993, March 18, 1994, June 15, 1994 and March 21, 1995 (HCAR Nos.

25777, 25897, 26007, 26066 and 26254, respectively), or subsequent

orders.

Applicants propose to manage interest rate risk and/or lower their

interest costs through the use of hedging products, including fixed-

for-floating interest rate swaps, forward swaps (i.e., where a swap

agreement is entered into but the exchange of fixed and floating

payments does not begin until a future date, which is generally the

call date on outstanding bonds), caps and collars and through forward

transactions. Applicants also request authorization to enter into

revenue (or offsetting) interest rate swap arrangements, or other

contractual arrangements, in order to limit the impact of anticipated

movements in interest rates or offset the effect of existing interest

rate swap agreements.

For the Commission, by the Division of Investment Management,

pursuant to delegated authority.

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 96-15111 Filed 6-13-96; 8:45 am]

BILLING CODE 8010-01-M