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

SECURITIES AND EXCHANGE COMMISSION

[Release No. 35-26735]

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

Amended (``Act'')

June 27, 1997.

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 21, 1997, 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.

Consolidated Natural Gas Company, et al. (70-8577) (70-8577)

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

company located at CNG Tower, 625 Liberty Avenue, Pittsburgh,

Pennsylvania 15222-3199, and its wholly-owned nonutility subsidiary

companies, CNG Energy Services Corporation (``Energy Services'') and

CNG Products and Services, Inc., (``Products and Services''), \1\

located respectively at One Park Ridge Center, Pittsburgh, Pennsylvania

15244-0746 and CNG Tower, 625 Liberty Avenue, Pittsburgh, Pennsylvania

15222-3199 (collectively ``Applicants''), have filed a post-effective

amendment to their application-declaration under sections 6(a), 7,

9(a), 10 and 12(b) of the Act and rules 43, 45 and 54 thereunder

seeking a supplemental order pertaining to the provision of certain

energy-related services and related loan financing. A notice of the

filing of the initial application-declaration was issued by the

Commission on July 21, 1995 (Holding Co. Act Release No. 26337) and an

initial order was issued on August 28, 1995 (Holding Co. Act Release

No. 26363).

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\1\ CNG incorporated CNG Special Products and Services, Inc., in

1995, as a wholly-owned non-utility subsidiary of its CNG Energy

Services Corporation subsidiary. The name was changed in late 1995

to CNG Products and Services, Inc. Products and Services provides

energy-related, customer-convenience type services to customers of

the local distribution companies in the CNG System and to others,

primarily customers of non-affiliated utilities. The ``CNG System''

consists of CNG and its wholly-owned utility and non-utility

subsidiaries.

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The initial order authorized Products and Services to provide

customers with ten categories of energy-related services (collectively,

``Original Customer Services''). \2\ It also authorized CNG to provide

Products and Services with up to $10 million in related revolving loan

financing through December 31, 2000. Applicants now seek a supplemental

order authorizing additional categories of energy-related services and

allowing Products and Services to provide financing to customers \3\ in

connection with the sale and installation of certain energy-related

equipment (collectively, ``New Customer Services'').

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\2\ The specific customer services approved by the initial order

were as follows: (1) ``Service Line Maintenance Program'' (repair of

service lines owned by and located on customers' property, in

exchange for a nominal monthly fee); (2) ``Appliance Guard'' (an

extended service warranty covering the cost of repairing customers'

appliances); (3) ``Payment Power'' (bill payment protection, up to

$400 a month for six months); (4) ``Routine Furnace Services''

(routine furnace inspection and repair); (5) ``One-Package Appliance

Inspection and Replacement'' (annual inspection, maintenance or

replacement of any appliance, including hot water heaters); (6)

``Community Bill Payment Center'' (a centralized bill payment center

for ``one stop'' payment of all utility and municipal bills); (7)

``Energy Audits and Services'' (energy audits for institutional

customers together with a turn-key service package); (8) ``Propane

Services'' (in areas where it is not economical for local

distribution companies to extend natural gas service via underground

pipelines); (9) ``Gas Fired Electric Generators'' (installation of

temporary or permanent gas-fired turbines for on-site generation and

consumption of electricity); and (10) ``Pipeline Maintenance,

Construction and Managerial Support Services for Others''

(management, construction and required maintenance for pipelines

owned by non-affiliated utilities and provision of consulting

services to small non-affiliated utilities).

\3\ As in the initial order, the term ``customers'' refers to

both customers of CNG's local distribution companies (``LDCs'') and

others, primarily customers of utilities not affiliated with CNG.

CNG has five wholly-owned LDCs: (1) The East Ohio Gas Company,

serving approximately 1,081,000 customers primarily in northeastern

Ohio; (2) The People's Natural Gas Company, serving approximately

332,000 customers in southwestern Pennsylvania; (3) Virginia Natural

Gas, Inc., serving approximately 184,000 customers in southeastern

Virginia; (4) Hope Gas, Inc., serving approximately 111,000

customers in central and northern West Virginia; and (5) West Ohio

Gas Company, serving approximately 60,000 customers in a region in

western Ohio centered around Lima.

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The proposed New Customer Services would consist of the following:

(1) Energy-Related Equipment--Products and Services would sell and

install (a) energy-related appliances such as furnaces, air

conditioners, hot water heaters, heat pumps, gas grills, gas lights,

gas logs and related fireplace equipment, natural gas vehicle (``NGV'')

conversion equipment (to convert a non-gas powered vehicle to ``dual-

fuel'' capability) and the NGV refueling equipment necessary to allow

customers to refuel their NGVs at home, and other similar appliances,

and (b) energy-related products that enhance safety, increase energy

efficiency, or provide energy-related information, such as home

security systems (including carbon monoxide, smoke and fire detectors,

and fire extinguishers), energy consumption monitoring devices

(including software programs), demand side management devices to

increase energy efficiency or reduce energy consumption, and other

similar products. (2) Energy-Related Safety Inspection and Repair

Services--Products and Services would offer residential and commercial

customers a safety inspection and repair service to detect and correct

problems such as carbon monoxide leaks, and faulty equipment wiring.

(3) Energy-Related Electronic Measurement Services--Products and

Services would offer

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residential, commercial and industrial customers a variety of enhanced

measurement and billing services (such as, in the case of residential

consumers, the ability to use a home phone or computer to determine

what their energy bill is at any point during the month, or, in the

case of large commercial consumers, the ability to continuously monitor

energy consumption, prices and fuel-switching opportunities) that will

enable them to better monitor and control their energy consumption and

expenditures. (4) Energy-Related Marketing and Consulting Services--

Products and Services would offer marketing services to non-affiliated

businesses by providing non-affiliated LDCs and other third parties

with bill insert and automated meter reading services as well as other

consulting services such as advice in how to set up a billing mechanism

or marketing program.\4\ (5) Risk Management Products for Gas

Customers--A variety of financial instruments may be made available to

gas customers interested in hedging energy price or consumption

fluctuations under existing contracts. These instruments will not be

used for speculative purposes. (6) Expanded Service Line Maintenance

Program--Products and Services proposes to expand the scope of the

Service Line Maintenance Program approved in the initial order to cover

any type of energy-related service line (wire or pipe) owned by the

customer. In exchange for a nominal monthly fee, Products and Services

would agree to pay for any needed repairs to customers' lines.\5\

Applicants state that Products and Services does not, and will not as a

result of this expanded maintenance program, own or operate any

facilities or utility assets as defined in sections 2(a)(3), 2(a)(4) or

2(a)(18) of the Act. (7) Customer Financing--Applicants seek

authorization for Products and Services to offer its own or to broker

non-associate third-party financing to commercial, industrial and

residential customers (``Customer Financing'') to facilitate purchases

by its customers of goods and services included within the Energy-

Related Equipment category of New Customer Services. Customer Financing

also would be available for purchases by CNG's gas utility customers of

Energy-Related Equipment where the customer is not otherwise purchasing

goods and services promoted by Products and Services. Customer

Financing would take the form of direct loans, installment purchase

arrangements and loan guarantees. (8) Incidental Products and

Services--Applicants seek authorization to provide certain incidental

products and services related to the seven categories of New Customer

Services listed above and the ten categories of Original Customer

Services authorized in the initial order (``Incidental Products and

Services''). The proposed Incidental Products and Services would be

closely related to the consumption of energy and/or the maintenance of

property by customers. The need for such products and services would

arise as a result of, or evolve out of, and would not differ materially

from, the Original Customer Services and/or New Customer Services

described above.\6\ (The Original Customer Services and the proposed

New Customer Services, are hereafter collectively referred to as

``Customer Services.'')

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\4\ Applicants state that this category of New Customer Services

expands on the ``Pipeline Maintenance, Construction and Managerial

Support Services for Others,'' category of Original Customer

Services approved by the initial order.

\5\ Applicants believe that customers will find it more

convenient and cost effective to pay one monthly fee to Products and

Services instead of separate monthly fees to a variety of utilities

(gas, electric, telephone, cable, water, etc.).

\6\ Applicants state that the Proposed Incidental Products and

Services would not involve the manufacture of energy-consuming

equipment but could be related to, among other things, the

maintenance, financing, sale or installation of such equipment.

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Products and Services conducts or will conduct its Customer

Services business both within and outside of the four states of

Virginia, West Virginia, Pennsylvania and Ohio where the CNG System

LDCs are located (collectively, ``LDC States''). However, applicants

state that during the twelve-month period beginning on the first day of

the Month following the date on which Products and Services commences

its New Customer Services business pursuant to a supplemental order

issued by the Commission in this matter, and for each subsequent

calendar year thereafter, total Customer Services revenues of Products

and Services derived from customers in the LDC States will exceed total

Customer Service revenues of Products and Services derived from

customers in all other states.

Applicants state that CNG's LDCs will assist Products and Services

with customer billing, accounting, and other energy-related services

and anticipate that these services can be provided to Products and

Services by the current staff at the LDCs. They state that all services

required to conduct the Customer Services and Incidental products and

Services businesses that are provided to Products and Services by the

LDCs or any other CNG System company will be billed at cost in

accordance with section 13(b) of the Act and rules 87, 90 and 91

thereunder.

Public Service Company of Oklahoma (70-9055)

Public Service Company of Oklahoma (``PSOK''), 212 East 6th Street,

Tulsa, Oklahoma, 74119-1212, a wholly-owned electric utility subsidiary

of Central and South West Corporation (``CSW''), a registered holding

company, has filed an application under sections 9(a) and 10 of the Act

and rule 54 thereunder seeking authorization to acquire up to 712,000

total shares (up to 4.9% of the voting shares) of Scientech, Inc.

(``Scientech''), a privately owned Idaho corporation that provides

utility related services (and some ancillary and minor products such as

replacement parts and components for commercial nuclear facilities) to

the nuclear utility industry (``utility services business'') and

certain United States Government agencies (``government agency services

business'').\7\

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\7\ Scientech has four wholly-owned subsidiaries, three majority

owned subsidiaries and one minority owned subsidiary. The wholly-

owned subsidiaries are UNC Analytical Services, Inc. (d/b/a Belfort

Engineering and Environmental Services, Inc.), Grant Environmental,

Inc., NUS Information Services, Inc., and NUS Instruments, Inc. The

majority owned subsidiaries are SRVNet, Inc., Technology

Applications, Inc., and SCIENTECH de Venezuela, Inc. The minority

owned subsidiary is SEMTECH, Inc.

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Scientech's utility services business is aimed at electric

utilities, which are restructuring and outsourcing in an increasingly

competitive environment. Scientech provides services (including

engineering and other services), systems (including security systems),

and instruments, which describe, regulate, monitor and enhance the

safety and reliability of plant operations and their environmental

impacts (collectively, ``risk and reliability services'').\8\ Nearly

40% of Scientech's utility services business involves the analysis and

evaluation of operational safety and risk using proprietary software.

Approximately 20% of Scientech's utility services business is

associated with engineering and operational support activities

involving nuclear materials and facilities, design and

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installation of microwave transmission systems, and training and

simulator instruction for nuclear power plants. Approximately 10% of

Scientech's utility services business is involved with the design and

installation of enhanced physical security systems, and another 10%

involves support services related to environmental compliance and

cleanup. Information management and other network services account for

15% of Scientech's utility services business, and the other 5% involves

software sales, including software used to support power plant

operations.

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\8\ Scientech also provides risk and reliability services

internationally. These services, which totaled approximately $1.3

million for the fiscal year ended January 31, 1997, are currently

being provided to the governments of and/or utilities in Canada,

Japan, Korea, and former Soviet Block countries. Approximately 75%

of these services are being funded under contract with the

Department of Energy and the Nuclear Regulatory Commission. Most of

the remaining work is performed under direct contract with Japanese

and Canadian utilities.

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Under contracts with the Department of Energy relating to the

nuclear industry, Scientech provides government agency services to the

Department of Defense and the Nuclear Regulatory Commission.

Scientech's government agency services business principally involves

the design and installation of enhanced physical security systems and

work requiring skills in safety analysis and assessment, knowledge of

secure handling of nuclear materials, technical review, technical

policymaking, and technical policy implementation.

A majority of Scientech's $53 million in actual revenues for its

fiscal year ended January 31, 1997 came from its government agency

services business. However, Scientech has adopted a strategy of

reducing its reliance on government contracts an applying its expertise

to capture a greater share of the utility services market. In September

1996, Scientech purchased the business and a portion of the assets

(primarily customer accounts receivable and other current assets

relating to utility services customers) of Halliburton NUS, a nuclear

utility services provider. On a pro forma basis, including the

Halliburton NUS acquisition, Scientech's utility services and

government contracts businesses would have each accounted for

approximately 48% of total of total revenues of approximately $70

million.

Scientech also applies some of its expertise to applications

outside of government agencies and the utility industry. It has sold

environmental services to mining operations, internet services to non-

utilities and risk and reliability services to the industrial sector.

These services totalled approximately $2 million for the fiscal year

ended January 31, 1997, which was approximately 3% of Scientech's total

revenue. Based on Scientech's present business strategy and its view of

optimum growth opportunities, it is anticipated that Scientech will

continue to provide the same or similar types of products and services

to non-utility and non-government customers and the percentage of

Scientech's total revenue from sales of products and services to such

customers will not materially increase.

Scientech's through its subsidiary, NUS Information Services, Inc.,

has performed a small amount of work at the South Texas Project

(``STP''), a nuclear generating facility partially owned by a CSW

electric utility subsidiary, Central Power and Light Company.

Currently, STP is subscribing to four informational database services

provided by NUS Information Services, Inc. It also has an open work

order for database maintenance. No other services are presently being

provided by Scientech or its subsidiaries to the CSW system.\9\ After

consummation of PSOK's proposed investment in Scientech, Scientech and/

or its subsidiaries may provide additional services or products to the

CSW system, although no such services or products have been identified

at this time.\10\

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\9\ The CSW system is comprised of CSW and its utility and non-

utility subsidiaries. The four utility subsidiaries of the CSW

system are Central Power & Light Company, PSOK, Southwestern

Electric Power Company and West Texas Utilities Company.

\10\ Applicant contends that Commission authorization under

section 13(b) of the Act is not required for Scientech and/or its

subsidiaries to provide services to the CSW system because, as

discussed below, PSOK will never own more than 4.9% of the voting

stock of Scientech and, consequently, Scientech will be neither an

affiliate nor a subsidiary company as defined in the Act.

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PSOK has entered into a Stock Purchase Agreement, dated June 2,

1997, between Dr. Lawrence J. Ybarrondo, Chairman of the Board of

Directors and founder of Scientech (and certain related trusts and

family members) (collectively, the ``Sellers'') and PSOK.\11\ Pursuant

to the Stock Purchase Agreement, and subject to certain conditions

including receipt of an order from the Commission approving this

application, PSOK shall purchase from the Sellers, at a purchase price

of $6.00 per share, or an aggregate purchase price of $3,036,000, an

aggregate of 506,000 shares of Scientech common stock (representing

approximately 25% of the total outstanding capital stock of Scientech),

consisting of 70,000 shares of Class A Voting Common Stock (``Class A

Stock'') and 436,000 shares of Class B Nonvoting Common Stock (``Class

B Stock'').\12\ The 70,000 shares of Class A Stock represent 4.5% of

the Class A Stock to be outstanding immediately following consummation

of PSOK's proposed investment in Scientech and the 436,000 shares of

Class B Stock represent 100% of the Class B Stock to be outstanding

immediately following consummation of PSOK's proposed investment.

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\11\ Sellers and PSOK have also entered into an Escrow

Agreement, Shareholders Agreement and Registration Rights Agreement,

all dated June 2, 1997.

\12\ Each share of Class A Stock entitles its holder to one vote

on any matter coming before the Scientech shareholders for a vote.

The holders of Class B Stock are not entitled to vote on any matter

coming before the shareholders, except that no amendment to

Scientech's Articles of Incorporation may be effected without the

affirmative vote of holders of a majority of the outstanding shares

of Class B Stock.

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The Stock Purchase Agreement also grants, subject to receipt of the

Commission approval sought in this application, an option for PSOK to

purchase from Sellers an additional 206,000 shares of Class B Stock,

not later than September 2, 1998, at a purchase price per share of

$9.00 (``Option Shares''). Purchase of these additional shares would

give PSOK ownership of approximately 34% of the total outstanding

capital stock of Scientech. The acquisition of all shares, including

any Option Shares, will be funded by PSOK out of internally generated

funds.

Each holder of Class B Stock has the right, at any time, at the

option of the holder and without payment of any further consideration,

to exchange each share of Class B Nonvoting Stock into one share of

fully paid Class A Voting Stock.\13\ However, Applicant states that

PSOK will not take any action that would cause PSOK to own or control,

and PSOK will not own or control, more tan 4.9% of the voting stock of

Scientech at any one time.

\13\ Holders of Class A Stock have a corresponding right to

convert their Class A shares into Class B shares.

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For the Commission, by the Division of Investment Management,

pursuant to delegated authority.

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 97-17541 Filed 7-2-97; 8:45 am]

BILLING CODE 8010-01-M