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

SECURITIES AND EXCHANGE COMMISSION

[Release No. 35-26941]

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

Amended (``Act'')

November 13, 1998.

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 under the Act. All interested persons are referred to the

application(s) and/or declaration(s) for

[[Page 64533]]

complete statements of the proposed transactions(s) and any amendment

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 December 8, 1998, to the Secretary, Securities and Exchange

Commission, Washington, DC 20549, and serve a copy on the relevant

applicant(s) and/or declarants(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 December 8, 1998, the application(s) and/or

declaration(s), as filed or as amended, may be granted and/or permitted

to become effective.

UtiliCorp United Inc. (70-9363)

UtiliCorp United Inc. (``UtiliCorp''), 20 West Ninth Street, Kansas

City, Missouri 64105, a public utility holding company claiming

exemption from registration under rule 10 of the Act, has filed an

application under section 3(b) and rules 10 and 11 under the Act.

UtiliCorp is a publicly traded corporation which engages, through

divisions, primarily in the sale and distribution of gas and

electricity to retail and wholesale customers in several states,

Canada, New Zealand and Australia. One of UtiliCorp's subsidiaries is

Power New Zealand Limited (``PNZ''), which is also a foreign utility

company exempt under section 33 of the Act.

UtiliCorp now requests an order under section 3(b) of the Act,

exempting PNZ from all provisions of the Act, except section 9(a)(2).

UtiliCorp states that PNZ will not derive any material part of its

income, directly or indirectly, from sources within the United States.

In addition, UtiliCorp states that PNZ is not, and does not own any

securities of any company which is, a public utility or holding company

operating in the United States.

UtiliCorp states that its investment in PNZ will not in any way

diminish the ability of various state commissions that regulate the

retail electric and gas operations of UtiliCorp to protect the

interests of consumers in their respective states. UtiliCorp states

that its domestic operations are, and will continue to be, fully

separated from its foreign operations. UtiliCorp represents that it

will maintain separate books of account for any of its subsidiaries

that may control any foreign company. UtiliCorp further represents that

it will provide access to these books and records to each state

commission with rate jurisdiction to the extent not already required by

law.

UtiliCorp states that, if an unqualified exemption under section

3(b) is granted, it intends to rely on rule 10 to provide it and

intermediated parent to PNZ an exemption from the Act as holding

companies due to their interests in PNZ. In addition, UtiliCorp asserts

that it will rely on rule 11(b)(1) to provide an exemption from the

approval requirements of sections 9(a)(2) and 10 to which UtiliCorp

would otherwise be subject.

The Peoples Natural Gas Company, et al. (70-9379)

The Peoples Natural Gas Company (``PNG''), a gas public utility

subsidiary company of Consolidated Natural Gas Company (``CNG''), a

registered holding company, and CNG Producing Company (``CNGP''), a gas

and oil exploration and production subsidiary company of CNG, both

located at 625 Liberty Avenue, Pittsburgh, Pennsylvania 15222-3197 have

filed an application-declaration under sections 9(a), 10 and 12(f) of

the Act and rules 43 and 54 under the Act.

PNG has signed a binding letter of intent, contingent upon

Commission approval, to sell all of its gas production properties

(``Properties'') to CNGP. The Properties consist of PNG's interest in

wells having reserves of approximately 41.9 billion cubic feet,

together with associated oil and gas leases covering approximately

175,000 acres, related agreements and equipment, and certain portions

of gathering lines.

The sale price for the Properties is approximately $14.5 million.

This price represents the net book value of all the production

properties as shown on PNG's books of account as of November 30, 1997,

and will be adjusted for further depreciation at the time of closing.

Conectiv, et al. (70-9069)

Conectiv, a registered holding company, and its marketing

subsidiary, Conectiv Energy Supply, Inc. (``CES''), both located at 800

King Street, Wilmington, DE 19899, Delmarva Capital Investments, Inc.

(``DCI''), a nonutility subsidiary of Conectiv, Conectiv Services, Inc.

(``CSI''), an energy-related company, both located at 252 Chapman Road,

P.O. Box 6066, Newark, DE 19714, ATE Investment, Inc. (``ATE''),

Atlantic Generation, Inc. (``AGI''), and Atlantic Southern Properties,

Inc. (``ASP''), all nonutility subsidiaries of Conectiv, located at

5100 Harding Highway, Mays Landing, NJ 08330 have filed an application-

declaration under sections 6(a), 7, 9(a), 10, 12(b), 12(c) and 12(f) of

the Act and rules 45, 46 and 54 under the Act.

By order dated February 25, 1998 (HCAR No. 26832) (``Merger

Order''), the Commission authorized Conectiv to consummate certain

transactions (``Merger'') resulting in the acquisition by Conectiv of

all of the outstanding voting securities of Delmarva Power & Light

Company, an electric public utility company (``Delmarva''), and

Atlantic City Electric Company, an electric public utility company

(``ACE'').\1\ Also as a result of the Merger and certain restructuring

that was implemented contemporaneously with the Merger, Conectiv became

the direct or indirect owner of various nonutility businesses.

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

\1\ Conectiv's two public utility subsidiaries (Delmarva and

ACE) and their subsidiaries are unaffected by the proposed

restructuring. Similarly, the system's service company, Conectiv

Resource Partners, Inc., is unaffected.

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

Conectiv now proposes, through December 31, 2001, to simplify and

consolidate its nonutility subsidiaries. The restructuring will be

accomplished in two phases (``Phase One'' and ``Phase Two''). During

Phase One, which will be implemented as soon as practicable following

the issuance of an order by the Commission in this filing, the number

of active direct nonutility subsidiaries of Conectiv will be reduced to

six: (1) CSI, which will focus on energy-related services and the

marketing of energy to retail customers; (2) CES, which will focus on

energy supply and marketing to wholesale and industrial customers,

including associates; (3) DCI, which will be renamed Conectiv

Properties and Investments, Inc. (``CPI'') and will own the nonutility

investments which are more passive in nature; (4) ASP, which will be

merged into CPI in Phase Two; (5) AGI, which will be merged into CES in

Phase Two; and (6) ATE, which will also be merged into CPI in Phase

Two.

Phase One

To implement Phase One and reduce the number of direct non-utility

subsidiaries, numerous actions must be effected, including the

following proposed actions. Atlantic Energy Enterprises, Inc.

(``AEE''), a direct nonutility subsidiary of Conectiv, that was formed

as a holding company for Conectiv's nonutility investments, will

[[Page 64534]]

be merged with and into Conectiv.\2\ This action will make all seven

wholly owned direct subsidiaries of AEE \3\ direct holdings of

Conectiv, for an interim period.

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

\2\ This merger will be a statutory short form merger (``Short-

form Merger''). A Short-form Merger occurs when a parent corporation

acquires all of the capital stock of a first tier subsidiary.

\3\ AEE's direct subsidiaries are: ATE; AGI; Conectiv Thermal

Systems, Inc. (``CTS'') (formerly Atlantic Thermal Systems, Inc.), a

company that provides thermal energy management services;

CoastalComm, Inc. (``Coastal''); Atlantic Southern Properties, Inc.

(``ASP''); Atlantic Energy Technology, Inc. (``AET'') and Enerval,

LLC (``Enerval''), a limited liability company that provides energy

management services. CSI will acquire Enerval and CTS during Phase

One.

Four of the six subsidiaries of CTS (Atlantic Jersey Thermal

Systems, Inc., Atlantic Pacific Las Vegas LLC, Atlantic-Pacific

Glendale LLC and Thermal Energy L.P.I) will be unaffected by the

restructuring. Atlantic Paxton Cogeneration, Inc. has been dissolved

and ATS Operating Services, Inc. may be merged with Thermal Energy

L.P.I in Phase Two.

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

The applicants state that the factors that warranted the formation

of special purpose subsidiaries for investment in various cogeneration

projects no longer exist. Therefore, during Phase One, Pedrick General,

Inc., Vineland General, Inc. and Binghamton General, Inc.

(``collectively, ``General Partners''), all special purpose

subsidiaries formed to act as general partners in Pedrick Cogeneration

Limited, Inc., Vineland Cogneration Limited, Inc. and Binghamton

Cogeneration Limited, (collectively, ``Cogen LLCs''), respectively.

During Phase One, the General Partners, through a Short-form Merger,

will be merged into their parent company, AGI, and the interest in the

Cogen LLCs will be acquired by ATE.

During Phase One, CSI will be the surviving corporation following

Short-form Mergers with Conectiv Solutions LLC, Altemp Energy Systems,

Inc. and Power Consulting Group, Inc. Each of these companies has been

authorized to provide energy-related services to retail consumers.\4\

CSI will succeed to each of the authorities previously granted by the

Commission to the predecessor companies in the Merger Order. CSI will

also own four additional wholly owned subsidiaries: Conectiv Plumbing

LLC, a company required under New Jersey law in connection with the

heating, ventilation and air conditioning services provided by CSI;

CTS; Conectiv Communications, Inc., an exempt telecommunications

company; and Enerval.

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

\4\ See Conectiv, Holding Company Act Release No. 26832 (Feb.

25, 1998).

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

During Phase One, CPI will become the holder of certain

nonregulated investments that are passive in nature. However, for

maximum flexibility, Conectiv requests authorization to retain certain

passive investments if retention by Conectiv is deemed more appropriate

for tax or other reasons. CPI will be the surviving corporation

following Short-form Mergers with Delmarva Services Company, a

corporation formed to own and finance an office building that is leased

to Delmarva and its associates, Christiana Capital Management, Inc., a

corporation that owns an office building leased to Delmarva, Atlantic

Energy International, Inc., a corporation formed to broker used utility

equipment to foreign countries and AET, a corporation formed to

research and develop energy technology.

During Phase One, CES will be the surviving corporation following

the Short-form Merger with Petron Oil Corporation, an energy marketing

company. CES will also acquire the capital stock of Delmarva Operating

Services Company (``DOSC''), a company providing management services to

independent production companies or exempt wholesale generators. The

capital stock in DOSC will be transferred up to Conectiv by capital

dividend and then contributed by Conectiv to CES in an exempt capital

contribution. Depending on the results of a pending tax analysis, the

transfer may be accomplished by (1) an asset for stock merger in which

Delmarva Capital Investments, Inc. (``DCI''), owner of the DOSC

securities would receive CES securities in exchange for the assets or

securities of DOSC, or (2) a dividend by DCI to Conectiv of the shares

of DOSC followed by a capital contribution of the shares to CES.

Phase Two

Phase Two will be completed as appropriate giving consideration to:

(1) Electric deregulation at the state and federal level; (2) tax

implications; and (3) other related issues. Upon completion of Phase

Two, the number of active direct nonutility subsidiaries of Conectiv

(``Direct Nonutilities'') will be reduced from six to three (CSI, CES

and CPI).

During Phase Two: (1) CSI will continue to focus on energy-related

services and the marketing of energy to retail customers; (2) CES will

continue to focus on energy supply and marketing to wholesale and

industrial customers, and acquire AGI by Short-form Merger; and (3) CPI

will continue to own certain nonutility investments which are more

passive in nature, and acquire ASP and ATE by Short-form Mergers.

For the Commission, by the Division of Investment Management,

under delegated authority.

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 98-31037 Filed 11-19-98; 8:45 am]

BILLING CODE 8010-01-M