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

SECURITIES AND EXCHANGE COMMISSION

[Release No. 35-26851]

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

Amended (``Act'')

March 27, 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 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 21, 1998, 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.

Central and South West Services, Inc. (70-8531)

Central and South West Services, Inc. (``CSWS''), 1616 Woodall

Rodgers Freeway, P.O. Box 660164, Dallas, Texas 75266, a service

company subsidiary of Central and South West Corporation (``CSW''), a

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

application under sections 9(a) and 10 of the Act and rule 54 under the

Act.

By orders dated April 26, 1995 (HCAR No. 26280) and December 11,

1997 (HCAR No. 26794) (``Orders''), the Commission authorized CSWS to

use excess resources in its engineering and construction department,

not needed to provide services to associates within the CSW system at

any given time, to provide power plant control system procurement,

integration and programming services, and power plant engineering and

construction services to nonassociate utilities through December 31,

2002.

CSWS now proposes to expand the authority granted in the Orders to

more clearly identify the excess engineering and construction

services\1\ and provide related environmental\2\ and equipment

maintenance services\3\ to nonassociate companies.

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\1\ The engineering and construction services will relate to:

consulting; design engineering; power quality; predictive

maintenance; energy efficiency; field construction support and field

construction; control system integration and engineering; project

development (small cogeneration, steam production and renewable

resources); production facilities operation; instrument engineering;

electrical engineering; mechanical engineering; civil engineering

and procurement activities.

\2\ The environmental services activities will relate to: Gas

emission equipment; continuous emission monitoring system;

environmental laboratory; environmental & occupational health

strategic planning; environmental & occupational health permitting;

environmental & occupational health management systems; and

environmental & occupational health compliance management.

\3\ The equipment maintenance services (``Equipment Services'')

will be limited to equipment used by CSW and its subsidiaries in

their core utility business. The Equipment Services will consist of:

repair, overhaul, and upgrades to equipment; machine shop services;

vibration analysis and equipment balancing; welding and fabrication;

field consulting and machining.

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American Electric Power Co., et al. (70-8693)

American Electric Power Company, Inc. (``AEP''), 1 Riverside Plaza,

Columbus, Ohio, 43215, a registered holding company, and its eight

wholly owned electric utility subsidiary companies, Appalachian Power

Company (``Appalachian''), Kingsport Power Company (``Kingsport''),

both at 40 Franklin Road, S.W., Roanoke, Virginia, 24011, Columbus

Southern Power Company (``Columbus''), 215 North Front Street,

Columbus, Ohio, 43215, Indiana Michigan Power Company (``Indiana''),

One Summit Square, P.O. Box 60, Fort Wayne, Indiana, 46801, Kentucky

Power

[[Page 16602]]

Company (``Kentucky''), 1701 Central Avenue, Ashland, Kentucky, 41101,

Ohio Power Company (``Ohio''), 301 Cleveland Avenue, S.W., Canton,

Ohio, 44701, AEP Generating Company (``Generating''), 1 Riverside

Plaza, Columbus, Ohio, 43215, and Wheeling Power Company

(``Wheeling''), 51 Sixteenth St., Wheeling, West Virginia, 26003, have

filed a post-effective amendment to a declaration filed under sections

6(a), 7 and 12(b) of the Act and rules 45 and 54 under the Act.

By order dated December 8, 1995, (HCAR No. 26424) (``Order''), the

Commission authorized AEP, Appalachian, Columbus, Indiana, Kentucky and

Ohio to issue and sell, through December 31, 2000, short-term notes to

banks and commercial paper. The Order also authorized Generating,

Kingsport, and Wheeling to issue and sell, through December 21, 2000,

short-term notes to banks.

The Order authorized short-term notes and/or commercial paper in

amounts not to exceed:

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Company Amount

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AEP................................................... $150,000,000

Appalachian........................................... 250,000,000

Columbus.............................................. 175,000,000

Indiana............................................... 175,000,000

Kentucky.............................................. 150,000,000

Generating............................................ 100,000,000

Kingsport............................................. 30,000,000

Ohio.................................................. 250,000,000

Wheeling.............................................. 30,000,000

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Total............................................. 1,310,000,000

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Applicants now request that the Order be amended to authorize

short-term notes (``Notes'') and commercial paper (``Commercial

Paper'') in the following increased amounts:

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Company Amount

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AEP................................................... $500,000,000

Appalachian........................................... 325,000,000

Columbus.............................................. 300,000,000

Indiana............................................... 300,000,000

Kentucky.............................................. 150,000,000

Generating............................................ 100,000,000

Kingsport............................................. 30,000,000

Ohio.................................................. 400,000,000

Wheeling.............................................. 30,000,000

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

Total............................................. 2,135,000,000

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Applicants also request that the Commission extend its

authorization through December 31, 2003. Finally, AEP requests

authorization to guarantee up to $40 million in short-term debt of

American Electric Power Service Corporation. The debt AEP requests

authority to guarantee matures within 270 days.

The Notes will mature within 270 days. The Commercial Paper will be

in the form of promissory notes in denominations of not less than

$50,000 and will mature within 270 days.

Applicants also request authorization to issue unsecured promissory

notes or other evidence of their reimbursement obligations in respect

of letters of credit issued on their behalf by certain banks. All

promissory notes or other evidence of reimbursement obligations,

together with other short-term indebtedness authorized, would be in an

aggregate amount not to exceed the above-itemized aggregate amounts

authorized for each Applicant and would mature within 270 days.

New England Electric System, et al. (70-9089)

New England Electric System (``NEES''), a registered holding

company, and its subsidiary companies, Massachusetts Electric Company,

Narragansett Energy Resources Company, New England Electric

Transmission Corporation, New England Energy Incorporated, New England

Hydro-Transmission Electric Company, Inc., New England Hydro-

Transmission Corporation, New England Power Company (``NEP''), and New

England Power Service Company, all located at 25 Research Drive,

Westborough, Massachusetts 01582, and Granite State Electric Company,

407 Miracle Mile, Suite 1, Lebanon, New Hampshire 03766, Nantucket

Electric Company, 25 Fairgrounds Road, Nantucket, Massachusetts 02554,

and The Narragansett Electric Company, 280 Melrose Street, Providence

Rhode Island 02901 (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 and 45 under the

Act.

By order dated October 29, 1997 (HCAR No. 26768) (``October 1997

Order''), the Commission, among other things, authorized, for the

period from November 1, 1997 through October 31, 2001: (1) NEP to

borrow from the NEES intrasystem money pool (``Money Pool''); (2) any

one Applicant, or a combination of several Applicants, to loan money to

one or more of the Applicants through the Money Pool under the current

terms of the Money Pool; (3) NEP to borrow from banks; and/or (4) NEP

to issue commercial paper. The October 1997 Order authorized NEP to

borrow money and/or issue commercial paper in an amount up to $375

million.

Applicants now propose that NEP be authorized to increase from $375

million to $750 million the total amount of the short-term borrowing

authorized by the October 1997 Order. As of March 1, 1998, NEP had $209

million of short-term debt outstanding in the form of commercial paper

and money pool borrowings. In addition, NEP has $372 million of

variable rate tax-exempt mortgage bonds outstanding (``Bonds''). Under

the terms of these Bonds, NEP is obligated to repurchase the bonds in

the event they cannot be remarketed to investors. NEP has a $205

million bond purchase facility to support this obligation. Thus, NEP

requires $376 million to support the remaining Bonds plus the

authorized level of short-term debt.

NEP currently has 1,100 megawatts of purchased power contracts. NEP

may have opportunities to negotiate or buy out these purchased power

contracts, which may require lump sum, up front payments. Also, upon

divestiture of its non-nuclear generation assets, NEP is required to

defease by either first call or maturity its outstanding mortgage bonds

($711 million of which support fixed or variable rate tax-exempt

mortgage bonds and $240 million of which are publicly held). The

repurchase of some of these publicly held bonds through a tender offer

or open market purchases may achieve cost savings. Therefore, NEP seeks

to increase its short-term borrowing authority by an additional $375

million.

American Electric Power Company, Inc., et al. (70-9145)

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

holding company, and its wholly owned nonutility subsidiaries AEP

Resources, Inc. (``AEPR''), AEP Energy Services, Inc. (``AEPES''), and

AEP Resources Services company (``Resco''), all located at 1 Riverside

Plaza, Columbus, Ohio 43215, have filed an application-declaration

under sections 6(a), 7, 9(a), 10, 12(b), 12(c) and 13(b) of the Act and

rules 45, 46, 54, 87 and 90 under the Act.

AEPR requests authority to enter, either directly or indirectly,

into a joint venture (``Management Company'') with Conoco Inc.

(``Conoco''), a subsidiary of E.I. du Pont de Nemours and Company

(``DuPont''). The Management Company would provide energy-related

services to industrial, commercial and institutional customers. AEPR

also requests authority to enter, either directly or indirectly, into a

joint venture (``Capital Company'') with Conoco and DuPont that would

provide financing to Management Company customers for energy-related

assets and for the purchase of services from Management Company.

[[Page 16603]]

The energy-related services to be provided by Management Company

would include energy facility management services, energy conservation

services, procurement services, other energy services and incidental

services. These services would be provided either directly by

Management Company or by special purpose subsidiaries established to

conduct these activities.

Energy facility management services include the day-to-day

operations, maintenance, and management, and other technical and

administrative services required to operate, maintain and manage

certain energy-related assets (``Energy Facilities''), as well as long-

term planning and budgeting for and evaluation of improvements to those

assets. ``Energy Facilities'' include facilities and equipment that are

used by industrial, commercial and institutional entities to produce,

convert, store and distribute (i) thermal energy products, such as

processed steam, heat, hot water, chilled water, and air conditioning,

(ii) electricity, (iii) compressed air, (iv) processed and potable

water, (v) industrial gases, such as nitrogen, and (vi) other similar

products. Energy Facilities also include related facilities that

transport, handle and store fuel, such as coal handling and oil storage

tanks, and facilities that treat waste for these entities, such as

scrubbers, precipitators, cooling towers and water treatment

facilities.

National Fuel Gas Company, et al. (70-9175)

National Fuel Gas Company (``National''), a registered holding

company, and its wholly owned nonutility subsidiary, National Fuel Gas

Supply Corporation (``Supply''), both located at 10 Lafayette Square,

Buffalo, New York 14203, have filed an application-declaration under

sections 6(a), 7, 9(a) and 10 of the Act and rule 43 under the Act.\4\

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\4\ National and its subsidiaries are collectively referred to

as the ``National Fuel Gas System.'' In addition to Supply,

National's subsidiaries consist of National Fuel Gas Distribution

Corporation (``Distribution''), Seneca Resources Corporation,

Utility Constructors, Inc., Leidy Hub, Inc., Horizon Energy

Development, Inc., Data-Track Account Services, Inc., National Fuel

Resources, Inc., Highland Land & Minerals, Inc., Niagara Trading

Inc., Niagara Independence Marketing Company, and Seneca

Independence Pipeline Company. Distribution, National's only utility

subsidiary, sells natural gas and provides natural gas

transportation services through a local distribution system located

in an area in western New York and northwestern Pennsylvania that

includes Buffalo, Niagara Falls and Jamestown, New York and Erie and

Sharon, Pennsylvania. Neither National nor any of its subsidiaries

currently has an ownership interest in an exempt wholesale generator

or foreign utility company as defined, respectively, in sections 32

and 33 of the Act.

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Supply is engaged in the interstate transportation and storage of

natural gas subject to the jurisdiction of the Federal Energy

Regulatory Commission. Cunningham Natural Gas Corporation

(``Cunningham''), a New York corporation that is not associated with

the National Fuel Gas System, is a nonutility company that operates two

natural gas wells, one in Allegany County, New York, and the other in

Potter County, Pennsylvania.\5\

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\5\ Cunningham also operates a number of shallow oil wells in

Pennsylvania.

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Supply and Cunningham have entered into an Asset Purchase and

Reorganization Agreement dated October 8, 1997 (``Agreement''), under

which Supply, subject to certain conditions including Commission

approval under the Act, will acquire substantially all the assets of

Cunningham (``Assets''). the Assets to be acquired by supply include

the following:

(1) Cunningham's two natural gas wells, and related pipeline's,

equipment, vehicles, leases, sales agreements and other property used

in the production of natural gas;

(2) Cunningham's cash, cash equivalents and receivables (except as

identified in footnote 4, below);

(3) Approximately 640 acres of undeveloped timber property in

Allegany County, New York;

(4) Any marketable securities that remain in Cunningham's accounts

with two investment brokers \6\ at the time the Exchange (as defined

below) is consummated (``Closing'').\7\

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\6\ One account is with Salomon Smith Barney, and the other is

with Edward Jones. At this time, these accounts consist entirely of

money funds and certificates of deposit.

\7\ The following assets of Cunningham will be excluded from the

Exchange: (1) Cunningham's oil wells and any equipment or other

property used by Cunningham in the production and sale of oil, which

will be sold to one or more other parties in separate transactions;

(2) an amount of cash or cash equivalents (not to exceed $300,000)

retained by Cunningham to pay deferred compensation obligations

predating the Agreement; and (3) two pickup trucks and one brine

truck, which will be sold to one or more other parties in separate

transactions.

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In exchange for the Assets, Cunningham will receive registered

shares of National's common voting stock, $1 par value (``Shares''),

having an aggregate market value (``Consideration'') as of the end of

the last business day immediately preceding the Closing (``Valuation

Date'') equal to the sum of the following: (1) the cash and cash

equivalents to be transferred to Supply; (2) the market value as of the

Valuation Date of any securities to be transferred to Supply (although

it is expected that no securities will be transferred); (3) the unpaid

balance of Cunningham's receivables from its gas sales customer; (4)

the fair market value of the real property owned by Cunningham

according to appraisals to be commissioned by Supply and Cunningham;

and (5) an agreed-upon amount of additional consideration. Applicants

have estimated that the sum of the above five asset categories will be

approximately $3.158 million. A final determination of the exact value

of the Consideration for the Assets and the precise number of Shares

given in exchange for them will be made on the Valuation Date.

Applicants state that, based on pro forma financial states, if the

exchange of Assets for Shares (``Exchange'') had been consummated on

November 30, 1997, Cunningham would have received 67,641 Shares, or

less than \2/10\ of 1% of the 38,251,307 shares of National's common

stock issued and outstanding as of March 17, 1998, and the market value

of the Shares ($3.158 million) would also have amounted to a small

fraction of 1% of the total assets of national and its subsidiaries,

which totaled $2,350,588,000 as of November 30, 1997. Applicants state

that the Exchange is expected to qualify for nonrecognition of gain or

loss under section 368 of the Internal Revenue Code.

The Shares to be exchanged for Cunningham's Assets will be

registered with the Commission under the Securities Act of 1933, issued

in compliance with any applicable state Blue Sky Laws, and listed on

the New York Stock Exchange. The Shares will be exchanged without

preference over any outstanding common stock of National as to

dividends or distribution, and will have equal voting rights with, all

outstanding common stock of National. In order to effectuate the

Exchange, National will issue the Shares to Supply, and Supply will, in

turn, pay National an amount equal to the Consideration for the

Shares.\8\ Supply will then exchange the Shares for the Assets.\9\

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\8\ Supply plans to finance this payment to National through

borrowings from the National Fuel Gas System money pool. See Holding

Co. Act Release No. 26443 (December 28, 1995).

\9\ The Agreement contemplates that, following the Exchange,

Cunningham would wind up its affairs under a plan of liquidation,

where its shareholders would receive the Shares in exchange for

their Cunningham common stock.

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Applicants state that section 2(b) of the Gas Related Activities

Act of 1990 (``GRAA'') is applicable to the proposed acquisition of

Cunningham's natural gas

[[Page 16604]]

properties for purposes of determining whether the functional

relationship requirement of section 11(b)(1) of the Act is

satisfied.\10\ In this regard, Applicants state that the proposed

acquisition is expected to improve operations of Supply's underground

natural gas storage facilities in Allegany and Steuben Counties, New

York, and will be: (1) in the interest of Supply's direct and indirect

transportation and storage customers, including Distribution,

National's public utility subsidiary and its customers; and (2)

nondetrimental to its customers, the public interest, investors or the

proper functioning of the National Fuel Gas System.

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\10\ Section 2(b) of the GRAA provides that the functional

relationship requirement of section 11(b)(1) of the Act will be

deemed satisfied if the Commission determines that ``(1) * * * such

acquisition is in the interest of consumers of each gas utility

company of [the] registered company or consumers of any other

subsidiary of such registered company; and (2) * * * such

acquisition will not be detrimental to the interest of consumers of

any such gas utility company or other subsidiary or to the proper

functioning of the registered holding company system.''

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For the Commission, by the Division of Investment Management,

pursuant to delegated authority.

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 98-8718 Filed 4-2-98; 8:45 am]

BILLING CODE 8010-01-M