[Federal Register Volume 69, Number 191 (Monday, October 4, 2004)]
[Notices]
[Pages 59282-59283]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E4-2463]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 35-27897]
Filings Under the Public Utility Holding Company Act of 1935, as
Amended (Act)
September 28, 2004.
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 complete statements of the
proposed transaction(s) summarized below. The application(s) and/or
declaration(s) and any amendment(s) is/are available for public
inspection through the Commission's Branch 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 20, 2004, to the Secretary, Securities and Exchange
Commission, Washington, DC 20549-0609, 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 the case of an attorney at law,
by certificate) should be filed with the request. Any request for
hearing should identify specifically the issues of facts 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 October 20, 2004, the application(s) and/or
declaration(s), as filed or as amended, may be granted and/or permitted
to become effective.
Allegheny Energy, Inc. (70-10247)
Allegheny Energy, Inc. (``Allegheny''), a registered holding
company under the Act, 800 Cabin Hill Drive, Greensburg, Pennsylvania
15601, has filed a declaration (``Declaration'') under section 12(d)
and rule 44 of the Act.
Allegheny requests authorization to sell its nine percent ownership
interest in Ohio Valley Electric Corporation (``OVEC'') to Buckeye
Power Generating, LLC (``Buckeye Power''), an affiliate of Buckeye
Power Inc. OVEC is a public utility company under the Act.
OVEC was formed in the early 1950s by a group of holding companies
and utilities located in the Ohio Valley region in response to the
request of the United States Atomic Energy Commission (``AEC'') to
supply the electric power and energy necessary to meet the needs of a
uranium enrichment plant being built by the AEC in Pike County, Ohio.
The holding companies that directly or indirectly own 10 percent or
more of OVEC's stock, each of which is a registered holding company,
are: Allegheny (12.5%),\1\ American Electric Power Company, Inc.
(``AEP'') (44.2%) and FirstEnergy Corp. (``FirstEnergy'') (20.5%).\2\
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\1\ In addition to the nine percent ownership interest in OVEC
that is the subject of this Declaration, Allegheny owns another
direct 3.5 percent interest in OVEC. Monongahela receives power from
OVEC under an entitlement to power associated with this 3.5 percent
interest. Allegheny is not proposing to transfer this 3.5 percent
interest at this time.
\2\ The following is a complete list of owners of OVEC's stock:
Allegheny (12.5%); AEP (39.9%); Cincinnati Gas & Electric Company
(9.0%); Columbus Southern Power Company, a subsidiary of AEP (4.3%);
The Dayton Power and Light Company (4.9%); Kentucky Utilities
Company (2.5%); Louisville Gas and Electric Company (4.9%); Ohio
Edison Company, a subsidiary of FirstEnergy (16.5%); Southern
Indiana Gas and Electric Company (1.5%); and The Toledo Edison
Company, a subsidiary of FirstEnergy (4.0%). Each of these companies
is either an original owner of OVEC's stock or a successor to an
original owner. These companies are referred to in this Declaration
as the ``Sponsoring Companies.''
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OVEC owns two coal-fired generating stations: (1) The Kyger Creek
Plant in Cheshire, Ohio, which has a generating capacity of 1,075
megawatts, and (2) the Clifty Creek Plant in Madison, Indiana, which
has a generating capacity of 1,290 megawatts and is owned by OVEC's
wholly-owned subsidiary, Indiana-Kentucky Electric Corporation.
Originally, the Department of Energy (``DOE'') purchased essentially
all of the generating capacity of OVEC's generating facilities.
However, DOE terminated its purchase agreement on April 30, 2003, and
each of the Sponsoring Companies currently is entitled to its specified
share of all net power and energy produced by OVEC's two generating
stations.\3\
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\3\ By letter dated September 29, 2000, the DOE notified OVEC
that it had elected to terminate the power agreement as of April 30,
2003. Allegheny understands that the DOE currently maintains its
uranium enrichment plant in ``cold standby'' status and is exploring
various options for the plant and the Ohio site. OVEC currently
provides retail service to DOE through an ``arranged power''
agreement under which OVEC procures power and energy for DOE at cost
from third parties.
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Buckeye Power, Inc., is a member-owned generation and transmission
cooperative based in Columbus, Ohio that supplies power and energy to
all the electric distribution cooperatives that serve customers in
Ohio. The certified service territory of these distribution
cooperatives covers nearly 40 percent of the land area in the State and
encompasses 77 of Ohio's 88 counties.
On May 17, 2004, Allegheny signed a purchase agreement (``Purchase
Agreement'') under which Allegheny will sell a nine percent equity
interest in OVEC, and Allegheny Energy Supply Company, LLC (``AE
Supply''), will assign its rights to nine percent of the power
generated by OVEC, to Buckeye Power for $102 million in cash and the
assumption of approximately $37 million in debt by Buckeye Power
(``Purchase Price''). Of the total cash component of the Purchase
Price, $7,140,000 represents the price for the transfer of Allegheny's
nine percent equity interest in OVEC, the transaction for which
authority is being sought in this Application. The remainder represents
the price for the assignment of AE Supply's rights under the OVEC
Inter-Company Power Agreement (``OVEC Power Agreement'') to nine
percent of the power generated by OVEC.\4\
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\4\ AE Supply will retain the right to nine percent of the power
from OVEC until March 12, 2006, at which time Buckeye Power will
begin to receive the power. The time for receipt of power by Buckeye
Power may be accelerated upon occurrence of certain events relating
to the financial condition of Allegheny.
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Allegheny maintains that the sale and assignment of these various
interests is consistent with Allegheny's strategic goals of improving
its financial strength
[[Page 59283]]
by reducing debt and of refocusing its attention on the generation
assets it owns and operates within the PJM Interconnection (``PJM'')
territory. Allegheny will use the net proceeds from the OVEC sale to
reduce outstanding debt and for general corporate purposes.
Allegheny states that the Purchase Price and other definitive terms
for the sale of OVEC reflected in the Purchase Agreement--negotiated by
representatives of the parties over a number of months--are the result
of arm's-length bargaining, and the Purchase Price constitutes fair and
adequate consideration for the sale and assignment of Allegheny's
interests in OVEC.
For the Commission, by the Division of Investment Management,
pursuant to delegated authority.
Margaret H. McFarland,
Deputy Secretary.
[FR Doc. E4-2463 Filed 10-1-04; 8:45 am]
BILLING CODE 8010-01-P