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

SECURITIES AND EXCHANGE COMMISSION

[Release No. 35-26763]

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

Amended (``Act'')

October 3, 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 October 27, 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.

Columbia Gas System, Inc. (70-8925)

The Columbia Gas System, Inc. (``Columbia''), a registered holding

company, its service company subsidiary, Columbia Gas System Service

Corporation, its liquified natural gas subsidiary, Columbia LNG

Corporation, its trading subsidiary, Columbia Atlantic Trading

Corporation, all located at 12355 Sunrise Valley Drive, Suite 300,

Reston, Virginia 20191-3458; Columbia's five distribution subsidiaries,

Columbia Gas of Ohio, Inc., Columbia Gas of

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Pennsylvania, Inc., Columbia Gas of Kentucky, Inc., Columbia Gas of

Maryland, Inc., Commonwealth Gas Services, Inc., all located at 200

Civic Center Drive, Columbus, Ohio 43215; Columbia's two transmission

subsidiaries, Columbia Gas Transmission Corporation and Columbia Gulf

Transmission Company, located at 1700 MacCorkle Avenue, S.E.,

Charleston, West Virginia 25314; Columbia's exploration and production

subsidiary, Columbia Natural Resources, Inc., 900 Pennsylvania Avenue,

Charleston, West Virginia 25302; Columbia's propane distribution

subsidiaries, Commonwealth Propane, Inc. and Columbia Propane

Corporation, both located at 9200 Arboretum Parkway, Suite 140,

Richmond, Virginia 23236; Columbia's energy services and marketing

subsidiaries, Columbia Energy Services Corporation (``Columbia

Energy''), Columbia Service Partners, Inc. and Columbia Energy

Marketing Corporation, all located at 121 Hill Pointe Drive, Suite 100,

Canonsburg, Pennsylvania 15317; Columbia's network services subsidiary,

Columbia Network Services Corporation (``CNS'') and CNS' subsidiary,

CNS Microwave, Inc., both located at 1600 Dublin Road, Columbus, Ohio

43215-1082; and Columbia's other subsidiaries, Tristar Ventures

Corporation, Tristar Capital Corporation, Tristar Pedrick Limited

Corporation, Tristar Pedrick General Corporation, Tristar Binghamton

Limited Corporation, Tristar Binghamton General Corporation, Tristar

Vineland Limited Corporation, Tristar Vineland General Corporation,

Tristar Rumford Limited Corporation, Tristar Georgetown Limited

Corporation, Tristar Georgetown General Corporation, Tristar Fuel Cells

Corporation, TVC Nine Corporation, TVC Ten Corporation and Tristar

System, Inc., all located at 205 Van Buren, Herndon, Virginia 22070,

have filed a post-effective amendment to their joint application-

declaration under sections 6(a), 7, 9(a), 10 and 12(b) of the Act and

rules 45 and 53.

By order dated December 23, 1996 (HCAR No. 26634) (``Order''), the

Commission authorized the Applicants to establish their internal and

external financing program, through December 31, 2001. In particular,

the Order authorized Columbia, its existing nonutility subsidiaries and

any nonutility subsidiaries established before December 31, 2001, to

enter into guarantee arrangements, obtain letters of credit, and

otherwise provide credit support for their respective subsidiaries in

amounts of up to $500 million (``Guaranties''). Columbia and its

existing and future nonutility subsidiaries now propose to increase the

amount of Guaranties to $2 billion.

Columbia wants to increase its investments in non-rate regulated

businesses, particularly gas marketing operations, and will use the

Guaranties to support these activities. Columbia notes that, in May

1997, Columbia Energy entered into an agreement to purchase and market

the offshore natural gas production for the Kerr-McGee Corporation

(``Kerr-McGee'') of approximately 250 Mmcf per day. Columbia Energy

will mange all of Kerr-McGee's United States natural gas marketing

activities including scheduling, nominating, balancing pipeline

transportation and providing financial risk management services. Also,

Columbia Energy purchased Pennunion Energy Services L.L.C.

(``Pennunion''), an energy marketing subsidiary of the Pennzoil

Company. The Pennunion acquisition will add sales of 2. Bcf per day.

Conectiv, Inc. (70-9069)

Conectiv, Inc. (``Conectiv''), 800 King Street, Wilmington,

Delaware 19899, a Delaware corporation not currently subject to the

Act, has filed an application-declaration under sections 6(a), 7, 8,

9(a), 10, 11, and rules 80 through 91, 93 and 94 under the Act.

Conectiv proposes to acquire, by means of the Mergers described

below (``Mergers''), all of the issued and outstanding common stock of

Delmarva Power & Light Company (``Delmarva'') and Atlantic Energy, Inc.

(``Atlantic''). Conectiv makes four other requests. Following the

Mergers, Conectiv will register under section 5 of the Act.

First, Conectiv requests that Support Conectiv (``Support

Conectiv'') be designated as a subsidiary service company under rule 88

of the Act.\1\ Second, Conectiv requests approval of the terms of the

service agreement among companies in the Conectiv system and Support

Conectiv. Third, Conectiv seeks Commission approval for it to acquire

the gas properties of Delmarva and to continue to operate Delmarva as a

combination utility. Fourth, Conectiv seeks Commission approval for it

to acquire the nonutility activities, businesses and investments of

Delmarva and Atlantic.

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\1\ Support Conectiv will be incorporated before the

consummation of the Mergers to serve as the service company for the

Conectiv system.

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Delmarva is a public utility company which provides electric

service in Delaware, Maryland and Virginia and gas service in Delaware.

As of December 31, 1996, Delmarva provided electric utility service to

approximately 442,000 customers in an area encompassing about 6,000

square miles in Delaware (253,000 customers), Maryland (169,000

customers) and Virginia (20,000 customers), and gas utility service to

approximately 100,000 customers in an area consisting of about 275

square miles in northern Delaware.

For the year ended December 31, 1996, Delmarva's operating revenues

on a consolidated basis were approximately $1,160 million, of which

approximately $981 million were derived from electric operations, $114

million from gas operations and $65 million from other operations.

Consolidated assets of Delmarva and its subsidiaries at December 31,

1996 were approximately $2,979 million, consisting of approximately

$2,536 million in identifiable electric utility property, plant and

equipment; approximately $219 million in identifiable gas utility

property, plant and equipment; and approximately $224 million in other

corporate assets.

As of December 31, 1996 Delmarva owned gas property consisting of a

liquefied natural gas plant located in Wilmington, Delaware with a

storagecapacity of 3.045 million gallons and a maximum daily sendout

capacity of 49,898 Mcf per day. This facility is used primarily as a

peak-shaving facility for Delmarva's gas customers. Delmarva also owns

four natural gas city gate stations at various locations in its gas

service territory. These stations have a total contract sendout

capacity of 125,000 Mcf per day. Delmarva has 111 miles of transmission

mains (including 11 miles of joint-use gas pipelines that are used 10%

for gas distribution and 90% for electricity production), 1,539 miles

of distribution mains and 1,091 miles of service lines. The Delmarva

gas facilities are located exclusively in New Castle County, Delaware.

Delmarva has seven direct nonutility subsidiaries: Delmarva

Industries, Inc., Delmarva Energy Company, Delmarva Services Company,

Conectiv Services, Inc., Conectiv Communications, Inc., Delmarva

Capital Investments,Inc. and East Coast Natural Gas Cooperative, L.L.C.

(``ECNG'').\2\

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\2\ Delmarva Industries, Inc. and Delmarva Energy Company

participate in oil and gas exploration and development

opportunities.

Delmarva Services Company owns and finances an office building

that it leases to Delmarva and/or its affiliates. Delmarva Services

Company also owns approximately 2.9% of the common stock of

Chesapeake Utilities Corporation, a publicly-traded gas utility

company with gas utility operations in Delaware, Maryland and

Florida.

Conectiv Services, Inc. acquires and operates service businesses

primarily involving heating, ventilation and air conditioning sales,

installation and servicing, and other energy-related activities.

Conectiv Communications, Inc. provides a full-range of retail

and wholesale telecommunications services.

Delmarva Capital Investments, Inc. is a holding company for a

variety of unregulated investments.

ECNG is a limited liability company in which Delmarva holds a

\1/7\th interest, is engaged in gas related activities.

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On December 31, 1996, Delmarva's nonutility subsidiaries and

investments constituted approximately 4 percent of the consolidated

assets of Delmarva and its subsidiaries.

Delmarva also has a nonutility subsidiary trust, Delmarva Power

Financing I (``DPF I''), which was formed in 1996 in connection with

the issuance by Delmarva of Cumulative Quarterly Income Preferred

Securities.

Atlantic is a public utility holding company that claims an

exemption from regulation by the Commission under section 3(a)(1) from

all provisions of the Act except section 9(a)(2).

The principal subsidiary of Atlantic is Atlantic City Electric

Company (``ACE''). ACE is itself a holding company which claims

exemption from regulation by the Commission under section 3(a)(1) from

all provisions of the Act except section 9(a)(2). ACE is engaged in the

generation, transmission, distribution and sale of electric energy. ACE

serves a population of approximately 476,000 customers in a 2,700

square-mile area of Southern New Jersey.

ACE currently has one utility subsidiary, Deepwater Operating

Company (``Deepwater''). Deepwater operates generating facilities in

New Jersey for ACE. Deepwater owns no physical assets. Prior to the

closing of the Mergers, the employees of Deepwater will become

employees of ACE. ACE also has a nonutility subsidiary trust, Atlantic

Capital I (``ACI''), which was formed in 1996 in connection with the

issuance by ACE of Cumulative Quarterly Income Preferred Securities.

On a consolidated basis, Atlantic's operating revenues for the

calendar year ended December 31, 1996 were approximately $980 million,

and its total assets as of December 31, 1996 were approximately $2,671

million.

Atlantic has two direct nonutility subsidiaries, Atlantic Energy

International, Inc. (``AEII'') and AEE.\3\

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\3\ AEII brokers used utility equipment to developing countries,

and provides utility consulting services related to the design of

sub-stations and other utility infrastructure. AEE is a holding

company for Atlantic's non-regulated subsidiaries.

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At December 31, 1996, Atlantic's nonutility subsidiaries and

investments constituted approximately 8.2 percent of the consolidated

book value of the assets of Atlantic and its subsidiaries.

Conectiv has no operations other than those contemplated by the

Merger Agreement to accomplish the Mergers. At present, Conectiv's

common stock, consisting of 1,000 issued and outstanding shares, is

owned by Delmarva and Atlantic, each of which owns 500 shares.

The merger agreement, dated as of August 9, 1996, as amended and

restated as of December 26, 1996 (``Merger Agreement''), provides for

Atlantic to be merged with and into Conectiv. Also under the Merger

Agreement, DS Sub, Inc., a direct subsidiary of Conectiv (``DS Sub''),

will be merged with and into Delmarva.\4\

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\4\ DS Sub has been incorporated as a direct transitory

subsidiary of Conectiv established to effectuate the Delmarva

Merger. The authorized capital stock of DS Sub consists of 1000

shares of common stock, $0.01 par value, all of which is held by

Conectiv. DS Sub has not had, and prior to the closing of the

Mergers will not have, any operations other than the activities

contemplated by the Merger Agreement necessary to accomplish the

combination of DS Sub and Delmarva.

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Conectiv will be a public utility holding company and will have two

direct utility subsidiaries, Delmarva and ACE, whose only nonutility

subsidiaries will be the two trusts: DPF I and ACI. Delmarva's and

Atlantic's other direct subsidiaries will also become direct

subsidiaries of Conectiv. Support Conectiv will be incorporated as a

service company for the Conectiv system.

Conectiv proposes to convert each issued and outstanding share of

Delmarva common stock into the right to receive one share of Conectiv

common stock (``Conectiv Common Stock''). Each issued and outstanding

share of Atlantic common stock shall be converted into the right to

receive 0.75 shares of Conectiv Common Stock and 0.125 shares of Class

A common stock of Conectiv (``Conectiv Class A Common Stock'').\5\

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\5\ The proposed use of two classes of common stock addresses

the difference in Delmarva's and Atlantic's evaluations of the

growth prospects of, and uncertainties associated with deregulation

of, the regulated electric utility business of Atlantic. The

Conectiv Class A Common Stock has been created to track the

performance of the currently regulated electric utility businesses

of ACE. This stock will be issued only to the holders of the

Atlantic Common Stock, thereby giving the current holders of

Atlantic Common Stock a proportionately greater opportunity to share

in the growth prospects of, and a proportionately greater exposure

to the uncertainties associated with deregulation of, the regulated

electric utility business of Atlantic. The proposed Conectiv Class A

Common Stock will have full voting rights with the Conectiv Common

Stock.

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The Mergers will have no effect on the shares of preferred stock of

Delmarva issued and outstanding at the time of the consummation of the

Mergers, each series of which and each share of which will remain

unchanged. Atlantic has no shares of preferred stock outstanding.

Conectiv proposes that the Commission authorize Support Conectiv as

the system service company. Support Conectiv will provide the Conectiv

system companies with a variety of administrative, management,

engineering, construction, environmental and support services, either

directly or through agreements with associate or nonassociate

companies, as needed.

Support Conectiv will enter into a service agreement with most, if

not all, companies in the Conectiv system. Support Conectiv's

authorized capital stock will consist of up to 3,000 shares of common

stock, $1 par value per share. Conectiv will hold all issued and

outstanding shares of Support Conectiv common stock.

Support Conectiv and its associate companies' cost and allocation

methods will conform with the ``at costs'' requirements of section 13

and rules under the Act.

Conectiv also requests authority to provide, directly, or through

one or more of its subsidiaries, retail services to residential,

commercial and industrial customers. Retail services include energy

analysis, project management, design and construction, energy efficient

equipment installation and maintenance, facilities management services,

environmental services and compliance, fuel procurement, and other

similar kinds of managerial and technical services.\6\

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\6\ Conectiv states that the retail services may specifically

include: (1) service lines repair/extended warranties; (2) surge

protection; (3) appliance merchandising/repair/extended warranties;

(4) utility bill insurance; and (5) incidental and reasonably

necessary products and services related to the choice, purchase or

consumption of any of these products and services.

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Conectiv further requests authority, after consummation of the

Mergers for a period of 24 months from the effective date of the

Mergers, to transfer certain assets such as real property used for

administrative purposes and information technology equipment and

software from Delmarva or ACE at cost to Support Conectiv.

For the Commission, by the Division of Investment Management,

pursuant to delegated authority.

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 97-26905 Filed 10-9-97; 8:45 am]

BILLING CODE 8010-01-M