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File No. 70-8773
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
____________________________________________________
PRE-EFFECTIVE AMENDMENT NO. 1 TO THE
FORM U-1
APPLICATION AND DECLARATION
UNDER THE
PUBLIC UTILITY HOLDING COMPANY ACT OF 1935
____________________________________________________
UNITIL CORPORATION
UNITIL RESOURCES, INC.
UNITIL SERVICE CORP.
216 Epping Road
Exeter, New Hampshire 03833
_________________________________
(Name of companies filing this statement and
address of principal executive offices)
UNITIL CORPORATION
__________________________________
(Name of top registered holding company
parent of each applicant or declarant)
Gail A. Siart
Treasurer
UNITIL CORPORATION
216 Epping Road
Exeter, New Hampshire 03833
____________________________________
(Name and address of agent for service)
The Commission is requested to mail copies of
all orders, notices and communications to:
William S. Lamb, Esq.
LeBoeuf, Lamb, Greene & MacRae, L.L.P.
125 West 55th Street
New York, New York 10019-5389
Unitil Corporation, a New Hampshire corporation ("Unitil") and
a registered holding company under the Public Utility Holding
Company Act of 1935 (the "Act"), its wholly owned subsidiary,
Unitil Resources, Inc., a New Hampshire corporation ("URI") and
its service company subsidiary, Unitil Service Corp., a New
Hampshire corporation ("Unitil Service"), each of Exeter, New
Hampshire (collectively, the "Applicants"), hereby file this
Pre-Effective Amendment No. 1 to their Application and
Declaration on Form U-1 (the "Application") with the Securities
and Exchange Commission (the "Commission").
The Applicants are seeking authorization from the Commission
under Sections 6(a), 7, 9(a), 10, 12 and 13(b) of the Act and
Rules 45, 54, 87, 90 and 91 thereunder for URI to expand its
business activities to include wholesale and retail energy
marketing and related activities.
Item 1. DESCRIPTION OF PROPOSED TRANSACTION
A. Request for Authority for URI to Provide Energy Marketing
and Related Services
As authorized by order dated May 24, 1993 (HCAR No. 25816),
URI is currently engaged in the business of providing energy
related management and consulting services to entities outside
the Unitil holding company system. Unitil is hereby seeking
authorization for URI to expand its authorized activities to
include engaging in transactions as a "marketer" of electricity,
natural gas and other energy commodities ("Energy Marketing").
In general terms, following the proposed expansion, URI's Energy Marketing
activities will involve arranging the sale and purchase, transportation,
transmission and storage of electricity, natural gas or other
energy commodities for a commission as well as entering into
contracts to purchase electricity, natural gas or other energy
commodities from suppliers and resell it to utility and
nonutility customers.1
URI's Energy Marketing arrangements may be undertaken on long
or short term durations and pursuant to individualized terms and
conditions, and sales of energy to groups of customers would
likely be aggregated together for purposes of obtaining
competitive wholesale energy supplies. In some cases, URI may
acquire energy supplies and then market that energy to customers
as competitively as possible, whereas in other cases, URI may
establish contracts with customers and then acquire energy
supplies to meet the customer's requirements. Although the
transactions URI proposes to engage in may take a variety of
different forms, a typical transaction might involve the
purchase of power from a utility or nonutility generator,
contracting with other utilities for the transmission of that
power, and the resale of that power by URI to a utility or to an
end-user.
Although URI believes that the bulk of its Energy Marketing
activities will involve marketing electricity or gas, it also
believes that in order to compete effectively with other
suppliers in the competitive marketplace who can provide a full
range of energy options to meet customer demands, URI will also
need to be able to engage in transactions for energy sources
other than electricity and gas.2 Unitil and URI therefore also
seek authority to undertake competitive market transactions
involving other energy commodities such as oil, refined
petroleum products, gas liquids, coal and wood and other similar
combustible substances.
In addition, customer requirements, particularly at the retail
level are also expected to include conservation and other
technical services ("Energy Management"). Specifically, URI may
engage in general demand side management3 and energy usage
consulting services. URI may also provide limited engineering
services to customers for power quality management (ensuring
uninterruptible supplies, proper grounding of equipment and related
matters) and power factor correction, both of which are designed to
help customers manage their power efficiency, supply and cost.4 The
provision of these Energy Management services will not involve the
issuance of any securities. URI seeks authority to undertake such
Energy Management services on a competitive basis, in order to be able
to satisfy customer requirements under competitive market conditions.
Unitil believes that these Energy Management services, together with
Energy Marketing services, will allow URI to offer complete Energy
Management services and solutions to customers on a competitive basis.
Indeed, Unitil expects that URI's Energy Marketing services and Energy
Management services will often be marketed jointly to customers who
are seeking the maximum value on a total energy basis from their
energy suppliers.
At the outset, Unitil Service, pursuant to its service
agreement with URI, will provide the staff and facilities
necessary to perform all of the Energy Marketing and the bulk of
the related activities of URI, including gas and power supply
planning and contracting, marketing, sales, customer services,
engineering, operations management, conservation services design
and contracting and related management and professional services.
Unitil Service currently provides similar services to other Unitil
system companies.5 Moreover, Unitil Service personnel have extensive
knowledge of the markets for electric power and natural gas and
in evaluating potential electric power and natural gas suppliers,
negotiating supply contracts and arranging for the transmission and
pooling of electric power, both because the Unitil system operating
companies obtain most of their electric power supply through
competitive wholesale power purchases and because of their experience
with Unitil's gas business. URI will reimburse Unitil Service at cost
for the services provided, in the same manner as any other Unitil
affiliate company. If needed in the future, URI could employ its own
staff.
In connection with the proposed business expansion, URI must
seek authority from the Federal Energy Regulatory Commission
("FERC") to conduct wholesale electric power marketing activities,
and from appropriate state authorities to conduct any retail electric
power marketing activities. Thus, URI will not enter into any electric
power purchase or sale contracts that are not within federal or state
regulatory purview. URI's activities in the developing wholesale and
retail power markets therefore will be subject to appropriate
limitations, conditions and control as determined by federal and state
law and corresponding regulatory authorities. Specifically, pursuant
to the requirements of the regulations of the FERC, URI will be unable
to purchase electric energy or capacity from, or sell these products
to, any affiliated companies in the Unitil holding company system unless
specifically authorized by the FERC. In addition, under FERC
regulations, URI will be unable to charge competitive, market-based
rates at wholesale unless its affiliated utility companies have filed
open access transmission tariffs acceptable to the FERC, and until
URI has satisfied the FERC that it has mitigated any market power
which it may have. At the state level, URI will not own any facilities
for generating, transmitting or distributing power, and therefore
would not be deemed a utility under most state laws. However, URI
will only be able to undertake retail electric power marketing activities
in the context of state legislative or regulatory initiatives, such as
the New Hampshire Retail Wheeling Pilot Program6 and the Massachusetts
Industry Restructuring Proceedings,7 effectively limiting URI's retail
activities to those permitted by state regulators. In addition, Unitil
has notified the MDPU and the NHPUC, the two state regulatory commissions
with jurisdiction over the operating public utilities in the Unitil holding
company system, of the plan to expand URI's business activities.
Finally, URI's gas and other energy commodity and energy
services marketing activities will be undertaken in accordance
with all applicable federal and state laws.
The proposed expansion of URI's activities will not result in
URI becoming an electric utility company within the meaning of
section 2(a)(3) of the Act or a gas utility company within the
meaning of Section 2(a)(4) of the Act. URI will not own or
operate any facilities used for the generation, transmission or
distribution of electric energy for sale or the distribution at
retail of natural gas for heat, light or power, and will not
invest, directly or indirectly, in such facilities or operations
of any third party, whether through a joint venture, partnership
or debt or equity financing. The Commission has previously
indicated that marketers engaged in the sale activities in which
URI intends to engage are not electric utility companies as
defined in Section 2(a)(3) of the Act,8 and has authorized gas
marketing subsidiaries as non-utility subsidiaries.9
Section 9(a)(1) of the Act provides that without prior
approval from the Commission, "it shall be unlawful for any
registered holding company or any subsidiary company thereof,...,
to acquire, directly or indirectly, any securities or
utility assets or any other interest in any business." The
expansion of the business activities of URI to include Energy
Marketing and Energy Management appears to qualify as an
acquisition of an interest in a new business. Section 10
contains the requirements for an application for such
authorization as well as a number of standards that must be met
for approval, including that the acquisition would not be
"detrimental to the carrying out of the provisions of section
11." Finally, Section 11(b)(1) limits Unitil to a single
integrated utility system and "such other business as are
reasonably incidental, or economically necessary or appropriate"
to the operations of the integrated public utility system of the
holding company. In addition, any services to be performed by
Unitil Service for URI must meet the standards of Section 13 of
the Act and the rules promulgated thereunder.
Energy Marketing and Energy Management are functionally
related to the operations of Unitil's integrated public utility
system. First, Unitil believes that entering into this business
is a significant step in allowing it to compete in the utility
industry and is thus in the best interest of investors and
consumers. As the Division of Investment Management recognized
in its recent report on the Regulation of Public Utility Holding
Companies,10 the utility industry is undergoing dramatic changes
and restructuring that requires utility companies to expand
beyond traditional utility services in order to remain
competitive. As a result:
the SEC must continue to respond flexibly to change in the
utility industry. Toward this end, the Division believes that
the registered holding companies should be permitted to invest
in diversified activities without unnecessary regulatory
obstacles and recommends consideration of a rule that would
exempt, subject to certain conditions, investments in specified
energy-related activities from prior SEC approval.11
A number of utility companies are expanding their non-regulated
activities to become complete "energy services companies."12
Unitil believes that it can enter the Energy Marketing and
Energy Management businesses through URI competitively based on its
existing expertise. Unitil also believes that as a result of
its power marketing activities in particular, various sources of
competitively priced electricity will become more readily
available to the wholesale electric power market and thus to the
existing Unitil system operating companies. Indeed, all
consumers of electric power will benefit as the alternatives for
supply of electricity increase and competition among electric
power suppliers grows. Similarly, gas marketing transactions
will increase competition within the market in which FG&E's gas
division operates and, as a result, benefit the consumers of
FG&E's gas services.
URI's Energy Marketing and Energy Management activities
also will benefit the Unitil system companies by permitting allocation
of Unitil Service's expenses across a broader base. To the extent
that these new activities permit greater utilization of Unitil
Service's existing resources, all of the Unitil system companies
will benefit.
Finally, the expansion into energy marketing and related
activities is consistent with the requirements of Section
11(b)(1) as the Division has recommended it be interpreted.
Indeed, as recommended in the Report, the Commission has
released for public comment a proposed new Rule 58 13, which
creates a "safe harbor" to exempt from the prior approval
requirements of Sections 9(a)(1) and 10, the acquisition of up
to the greater of $50 million or 15% of the holding company's
consolidated capitalization by registered holding companies of
the securities certain "energy-related" businesses (and, in the
case of gas holding companies, gas-related businesses).14 As
proposed, the definition of energy related activity includes
"the brokering and marketing of energy commodities, including
but not limited to electricity and natural or manufactured
gas," as well as "the rendering of energy conservation and
demand-side management services." Although the rule has not
been promulgated as of yet and is thus unavailable for the
Applicants, proposed Rule 58 clearly indicates that the
Commission may interpret such marketing and services as
acceptable activities within the parameters of Section 11(b)(1)
as it is currently written. Indeed, the new rule does not
contain any geographic or revenue requirements (e.g., an energy
related activity need not occur within the service territory of
the holding company's operating public utilities, nor must any
percentage of operating revenues from any energy related
activity derive from services provided to associated companies),
thereby indicating that Section 11(b)(1) does not require
marketers in a registered holding company system to meet those
standards.
As noted in the rule release, the Commission has authorized
various registered companies to engage in a wide range of gas
and some energy marketing activities in the past.15 In
addition, the Commission recently authorized Northeast
Utilities' operating utility subsidiaries and Northeast
Utilities Service Company to expand their business activities to
include the marketing and brokering of power to non-affiliates
both within and outside the operating companies' service
territory.16 Additionally, a number of other registered holding
companies have entered into the energy marketing business
through their affiliated exempt wholesale generators ("EWGs").17
Pursuant to the terms of the Energy Policy Act of 1992
("EPAct") and Section 32 of the Act, an entity with EWG status,
which is determined by the FERC, is not a public utility company
for purposes of the Act and may be acquired by registered
holding company systems. In a number of decisions, the FERC has
noted that the congressional conference report that accompanied
EPAct specifically stated that the "definition of an EWG has
been drafted to permit an EWG to sell wholesale power that it
has not generated itself."18 The FERC has interpreted this
language to mean that an EWG can conduct energy marketing
activities involving power it did not generate, and can be
certified to charge market based rates in such transactions,
without jeopardizing its status as an EWG, subject to certain
limitations established by the FERC.19 Because Unitil does not
currently own an interest in an EWG, it is seeking separate
Commission authorization for its Energy Marketing activities.
Similarly, the Energy Management services for which URI
is requesting authorization herein are functionally related activities
and are permissible within the meaning of Section 11(b)(1) of the Act.
Proposed Rule 58 lists "the rendering of energy conservation and demand
side management and services" and "the development and commercialization
of electro-technologies related to energy conservation, storage and
conversion, energy efficiency . . . and similar innovations" as well
as "the sale of technical, operational, management, and other similar
kinds of services and expertise, developed in the course of utility
operations" as energy related activities. In addition, the Commission
has authorized registered holding company subsidiaries to engage in
demand side management services and utility-related consulting
and engineering services numerous times in the past. See
Central and South West Corporation, HCAR No. 26367 (Sept. 1,
1995) (authorizing subsidiary to engage in energy consulting and
demand side management services to customers); American Electric
Power Company, HCAR No. 26267 (April 5, 1995) (authorizing
subsidiary to provide demand side management services) and
General Public Utilities Corp., HCAR No. 25108 (June 26, 1990)
(authorizing engineering and management services subsidiary).
Overall, authorization for URI to engage in Energy Marketing
and Energy Management activities will aid in the development of a more
competitive energy marketplace. Participation by energy marketers
such as URI will increase the likelihood that new products and services
will develop as market needs are identified and that, as a result,
customer choice will increase. Accordingly, Unitil should be permitted t
o engage in competitive Energy Marketing and Energy Management activities
through URI, which will then allow URI to compete on the same basis as
other companies.
B. Request for Authority for Unitil to Provide
Indemnifications and Guarantees to URI
URI may, from time to time, need Unitil to indemnify third
parties, to guarantee performance of its obligations or payment
of its debts and/or to act as surety for its activities. The
need for such guarantee authority relates to the market practice
pursuant to which energy marketing companies, such as URI,
demonstrate their financial credibility with customers. Energy
marketing companies, though entering into many contracts for
high volumes of gas or power, are often not highly capitalized
due to the nature of their operations. This absence of high
capitalization has caused some would-be customers to be
apprehensive of the risk of dealing with such marketing
companies. However, often times such marketing companies are
subsidiaries of financially strong parent companies.
Consequently, the usual method for establishing the financial
credibility of the marketing company is by the parent (such as
Unitil) standing behind its subsidiary through guarantees, thus
allowing the subsidiary to compete effectively in increasingly
deregulated markets. The Applicants request approval through
December 31, 2000 for Unitil to indemnify and guarantee the
power and fuel transactions of URI. Such indemnities and
guarantees will not exceed more than $30,000,000 in the
aggregate outstanding at any one time.
C. Request for Authority for Unitil Service to
Provide Services to URI
As stated above, URI will contract with Unitil Service for
personnel to perform most of URI's Energy Marketing and Energy
Management activities. Services provided by Unitil Service personnel
to URI will not impair the ability of Unitil Service personnel to
continue to provide services to other system companies. As a result,
the Applicants do not anticipate the need to hire additional
employees at the outset in order to perform assignments obtained
by URI at this time.20 While Unitil Service employees are assigned
to a URI activity, they will continue to be employees of and paid by
Unitil Service. URI will reimburse Unitil Service for their
compensation, including benefits, during that time pursuant to
the terms of the existing service company agreement between URI
and Unitil Service. Unitil Service will also continue to
provide URI with accounting, credit, financial, management,
technical and clerical support in accordance with the terms and
conditions of the existing service agreement between URI and
Unitil Service. The Applicants request authority for Unitil
Service to provide the additional services to URI, necessary to
allow URI to undertake Energy Marketing and Energy Management
activities as testified above.
D. Involvement of Unitil System Companies with
Exempt Wholesale Generators and Foreign
Utility Companies
Neither Unitil nor any subsidiary thereof presently has, or as
a consequence of the proposed transaction will have, an interest
in any EWG or foreign utility company ("FUCO"), as those terms
are defined in Sections 32 and 33 of the Act, respectively.
None of the proceeds from the proposed transactions will be used
by URI to acquire any securities of, or any interest in, an EWG
or FUCO. Moreover, neither Unitil nor any subsidiary thereof
is, or as a consequence of the proposed transaction will become,
a party to, and such entities do not and will not have any
rights under, a service, sales or construction agreement with
any EWGs or FUCOs except in accordance with the rules and
regulations promulgated by the Commission with respect thereto.
E. Reports to be Filed with the Commission
URI will continue to file quarterly reports with the
Commission within 60 days after the end of each calendar
quarter. These reports will include the following additional
information:
(1) Description of the Energy Marketing and Energy Management
activities undertaken by URI, including the type of
activity, the name(s) of clients, the location(s) where
the activities took place, the nature of the legal
instrument under which such activities where performed
and the compensation received during the period;
(2) Description of expenses incurred by URI in connection with
Energy Marketing and Energy Management activities, during
the quarter and cumulative to date; and
(3) Description of the staffing of URI's Energy Marketing
and Energy Management projects during the quarter, including
the number and type of personnel assigned by Unitil Service,
noting the percentage of time committed to the projects.
In addition, URI will continue to file with the Commission an
annual report of its activities for the preceding calendar year
using, where appropriate, the Form U-13-60 reporting format
pursuant to Rule 94.
Item 2. FEES, COMMISSIONS AND EXPENSES
The fees, commissions and expenses of the Applicants expected
to be paid or incurred, directly or indirectly, in connection
with the transactions described in this Application are
estimated as follows:
Commission filing fee
Relating to the Application . . . . . . . . . . . . $2,000
Legal fees . . . . . . . . . . . . . . . . . . . . . $ *
Miscellaneous. . . . . . . . . . . . . . . . . . . . $ *
Total. . . . . . . . . . . . . . . . . . . . $ *
* To be filed by amendment.
Item 3. APPLICABLE STATUTORY PROVISIONS
The sections of the Act, and rules or exemptions thereunder,
that the Applicants consider applicable to the transactions
described in this Application are set forth below:
(i) Authorization for URI to provide Sections 9(a) and 10
energy marketing and
related services
(ii) Services provided by Unitil Section 13(b), Rules
Service to URI 87(b)(1), 90 and 91
(iii) Indemnification of third parties, Sections 6(a), 7 and 12(b),
guarantees of payment and Rule 45 and 54
performance, acting as a surety
To the extent that the transactions described in this
Application are considered by the Commission to require
authorization, approval or exemption under any section of the
Act or the rules thereunder other than those specifically
referred to in this Application, Unitil, URI and Unitil Service
hereby request such authorization, approval or exemption.
Item 4. REGULATORY APPROVALS
The FERC has jurisdiction over any interstate wholesale electric
power sales by URI, and any related interstate transmission arrangements.
Proposed power marketing transactions of URI with retail customers, and
rates and terms for those transactions must meet the requirements of
state law and will require authorization by the appropriate state utility
regulatory commissions. No state regulatory body or agency and no Federal
agency or commission, other than this Commission has jurisdiction over the
proposed securities and service transactions described in this Application.
Item 5. PROCEDURE
It is requested that the Commission issue and publish no later
than March 8, 1996, the requisite notice under Rule 23 with
respect to the filing of this Application, such notice to
specify a date not later than April 1, 1996, as the date after
which an order granting and permitting this Application to
become effective may be entered by the Commission and that the
Commission enter not later than April 3, 1996, an appropriate
order granting and permitting this Application to become
effective.
The Applicants respectfully request that appropriate and
timely action be taken by the Commission in this matter. No
recommended decision by a hearing officer or other responsible
officer of the Commission is necessary or required in this
matter. The Division of Investment Management of the Commission
may assist in the preparation of the Commission's decision in
this matter. There should be no thirty-day waiting period
between the issuance and the effective date of any order issued
by the Commission in this matter, and it is respectfully
requested that any such order be made effective immediately upon
the entry thereof.
Item 6. EXHIBITS AND FINANCIAL STATEMENTS
a. Exhibits
F-1 Opinion of Counsel
(to be filed by amendment)
F-2 "Past Tense" Opinion of Counsel
(to be filed by amendment)
G-1 Proposed Form of Public Notice (previously filed)
b. Financial Statements
(1) Unitil Corporation and Subsidiary Companies
Consolidated Statements of Earnings --
Nine Months Ended September 30, 1995 (previously filed)
(2) Unitil Corporation and Subsidiary Companies
Consolidated Balance Sheets, September 30, 1995
(previously filed)
(3) Unitil Corporation and Subsidiary Companies
Consolidated Statements of Cash Flows -- Nine Months
Ended September 30, 1995 (previously filed)
(4) Unitil Corporation and Subsidiary Companies
Notes to Consolidated Financial Statements
(previously filed)
Item 7. INFORMATION AS TO ENVIRONMENTAL EFFECTS
None of the matters that are the subject of this Application
involve a "major Federal action" nor do they "significantly
affect the quality of the human environment" as those terms are
used in section 102(2)(C) of the National Environmental Policy
Act. None of the transactions that are the subject of this
Application will result in changes in the operation of the
company that will have an impact on the environment. The
Applicants are not aware of any Federal agency which has
prepared or is preparing an environmental impact statement with
respect to the transactions which are the subject of this
Application.
SIGNATURE
Pursuant to the requirements of the Public Utility Holding
Company Act of 1935, the undersigned companies have duly caused
this Application to be signed on their behalf by the undersigned
thereunto duly authorized.
Unitil Corporation
Unitil Resources, Inc.
Unitil Service Corp.
By: /s/ Gail A. Siart
Gail A. Siart
Secretary and Treasurer
Unitil Corporation
Vice President and Treasurer
Unitil Resources, Inc.
Senior Vice President
Unitil Service Corp.
Date: March 8, 1996
1 While initially concentrated in the New England region, URI's
potential customer base ultimately may include individuals and entities
located outside the New England region.
2 Fitchburg Gas and Electric Light Company ("FG&E"), an
electric and gas utility subsidiary of Unitil, is engaged in the
gas utility business. Three of Unitil's public utility
subsidiaries, namely Concord Electric Company ("Concord"),
Exeter & Hampton Electric Company ("E&H") and FG&E, currently
purchase other petroleum fuels for their own use. In addition,
electric supplies acquired to meet the electrical needs of
Unitil's retail customers include generating sources using the
entire spectrum of fuel sources, including coal and wood.
3 Concord, E&H and FG&E currently provide demand side
management services to their customers, including, among other
things, hot water heater tank and pipe wrapping, energy
efficient lighting, heating and cooling programs, energy audits
and provision of rebates in connection with energy efficient
equipment.
4 Concord, E&H and FG&E currently perform these functions for
their own systems and, on occasion, perform such services for
customers.
5 Some personnel of Unitil's operating utility subsidiaries
may perform certain of the technical and engineering functions that are
part of URI's demand side management services. No operating utility
personnel will provide any services for URI's operations if it impairs
their ability to provide services to the relevant system operating utility.
6 Under the provisions of NHRSA 374:26-a, enacted in June of
1995, the New Hampshire Public Utility Commission (the "NHPUC")
on November 20, 1995, in Docket DR 95-250, issued Guidelines for
a Retail Wheeling Pilot Program. Under this program suppliers
will have the opportunity, as of May 1996, to make retail sales
to a selected group of retail customers in New Hampshire under a
competitive program operated under the auspices of the NHPUC.
7 On August 16, 1995, in Docket D.P.U. 95-30, the Massachusetts
Department of Public Utilities (the "MDPU") issued an order
requiring that all electric utilities in Massachusetts file
industry restructuring plans meeting a set of principles
including customer choice and full competition in generation
markets. The three largest Massachusetts utilities are required
to file these plans February 16, 1996, with an anticipated
resolution within six months.
8 See, e.g., Enron Power Marketing, Inc. (Jan. 5, 1994); CRSS
Power Marketing, Inc. (March 31, 1994); Electric Clearinghouse,
Inc. (Apr. 13, 1994); Inter-Coast Power Marketing Co. (Dec. 6,
1994); AIG Trading Corporation (Jan. 20, 1995) and Tucson
Electric Power Co. (September 26, 1995).
9 Consolidated Natural Gas, HCAR No. 24329 (Feb. 27, 1987).
10 The Regulation of Public Utility Holding Companies (June
1995) (the "Report").
11 Report at 87.
12 See e.g., Electric Utility Week, May 8, 1995 at 3
(announcing UtiliCorp United's nation wide brand name under
which it will provide energy services); The Energy Daily, August
23, 1995 at 1 (announcing formation of energy services
subsidiary by Pacific Gas & Electric Enterprises).
13 60 Fed. Reg. 33,642 (June 28, 1995) (the "Release").
14 As previously discussed, the Unitil system contains both
electric and gas operations.
15 Release at 12, citing Consolidated Natural Gas Co., HCAR No.
24329 (Feb. 27, 1987) (authorizing gas marketing subsidiary) and
Entergy Co., HCAR No. 25848 (June 8, 1993) (authorizing sale of
consulting services to non affiliates, including expertise
relating to brokering of power)
16 Northeast Utilities Service Company, HCAR No. 26359 (August
18, 1995). Although Northeast Utilities ("NU") stated that such
marketing activities will occur principally in the New England,
New York, Pennsylvania, New Jersey, Maryland and Delaware area,
no specific geographic limitations on such activity were imposed
by the Commission. It should be noted that NU's application to
the FERC for authorization to charge market based rates was
initially denied primarily because the transmission tariff filed
by NU did not follow the pro forma tariff promulgated by FERC.
Such application was recently conditionally granted on the
condition that NU delete the non-conforming language from its
transmission tariff within 15 days of February 14, 1996. See
Northeast Utilities Service Company, 74 FERC d 61,135 (1996).
17 See, e.g., CNG Power Services Corporation, 71 FERC d 61,378
(1995); Southern Energy Marketing, Inc., 71 FERC d 61,376
(1995); Wholesale Power Services, Inc. 72 FERC d 61,284 (1995)
(power marketing by CINergy affiliate); and Entergy Power
Marketing Corporation, 73 FERC d 61,063 (1995).
18 See, e.g., CNG Power Services Corporation, 71 FERC d 61,378
(1995); LG&E Power Marketing, Inc., 60 FERC d 61,083 (1994).
See also, H.R. Conf. Rep. No. 102-108, 102nd Cong. 2nd Sees. 388
(1992). The EWG is defined as "a person engaged directly, or
indirectly through one or more affiliates..., and exclusively in
the business of owning or operating, or both owning and
operating, all or part of one or more eligible facilities and
selling electricity at wholesale." (emphasis added).
19 See supra note. 13.
20 If URI's operations expand significantly, the Applicants may decide
that it has become viable to hire a separate staff for URI, which would
also ensure that URI's increased operations do not impair other system
company operations.