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

[Federal Register Volume 64, Number 25 (Monday, February 8, 1999)]
[Notices]
[Pages 6124-6128]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-2894]


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

SECURITIES AND EXCHANGE COMMISSION

[Release No. 35-26970]


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

January 29, 1999.
    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 
applications(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 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 February 22, 1999, 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 received a copy of any notice or order issued in the 
matter. After February 22, 1999, the application(s) and/or 
declaration(s), as filed or as amended, may be granted and/or permitted 
to become effective.

Ameren Corporation

[70-9423]

    Ameren Corporation (``Ameren''), a registered holding company, 
Union Electric Company (``UE''), an electric and gas public utility 
subsidiary of Ameren, and Ameren Services Company (``Ameren 
Services''), a service company subsidiary of Ameren, all located at 
1901 Chouteau Avenue, St. Louis, Missouri 63103, and Central Illinois 
Public Service Company (``CIPS''), and electric and gas public utility 
subsidiary of Ameren, located at 607 East Adams,

[[Page 6125]]

Springfield, Illinois 62953, have filed an application-declaration 
under sections 6(a), 7, 9(a), 10, and 12(b) of the Act and rules 43 and 
54 under the Act.
    Applicants propose to establish and participate in a money pool 
(the ``Money Pool'') through February 27, 2003. The specific terms and 
provisions of the Money Pool will be forth in a money pool agreement 
(``Agreement'') among all of the applicants. The applicants are 
proposing to establish the Money Pool in order to coordinate and 
provide for the short-term cash and working capital requirements of UE, 
CIPS and Ameren Services.
    UE's aggregate principal amount of borrowings outstanding at any 
one time from the Money Pool will be limited to $500 million. 
Borrowings by CIPS and Ameren Services under the Money Pool will be 
exempt under rule 52. Ameren will not borrow funds from the Money Pool. 
In accordance with the Agreement, funds for the Money Pool will be 
available from surplus funds in the treasuries of UE, CIPS, Ameren 
Services and Ameren (``Internal Funds''), and proceeds from bank 
borrowings and the sale of commercial paper by Ameren, UE, and CIPS 
(``External Funds'').\1\
---------------------------------------------------------------------------

    \1\ By order dated March 13, 1998 (HCAR No. 26841), Ameren is 
authorized, through February 27, 2003, to obtain debt financing from 
third parties up to a maximum of $300 million. Under the terms of 
that order, UE and CIPS are authorized, through February 27, 2003, 
to obtain debt financing up to a maximum of $1 billion for UE and 
$250 million for CIPS.
---------------------------------------------------------------------------

    No party will be required to borrow through the Money Pool if it is 
determined that it could borrow at a lower cost directly from banks or 
through the sale of its own commercial paper in an existing commercial 
paper program. Each participate will, in its sole discretion, make the 
determination of whether it will lend funds to the Money Pool.
    The loans will be made through open-account advances and will be 
repayable no later than one year after the date of the advance. In 
addition, the loans may be repaid in whole at any time or in part from 
time to time, without premium or penalty. Ameren Services will 
administer the Money Pool on an ``at cost'' basis.
    Funds provided to the Money Pool that are not used to make loans 
will ordinarily be invested in one or more short-term investments or 
any other investments that are permitted by section 9(c) of the Act and 
rule 40 under the Act.

Rochester Gas and Electric HoldCo

[70-9355]

    Rochester Gas and Electric HoldCo (``HoldCo''), 89 East Avenue, 
Rochester, New York 14649, a wholly owned subsidiary of Rochester Gas 
and Electric Corporation (``RG&E''), a gas and electric public utility 
company, has filed an application under section 3(a)(1) of the Act for 
an order exempting it from regulation under all of the provisions of 
the Act, except section 9(a)(2).
    RG&E is a combination gas and electric public utility company 
operating in the state of New York. It owns and operates electric 
generation, transmission and distribution facilities and natural gas 
distribution facilities serving approximately one million retail 
customers in and around Rochester, New York.
    HoldCo proposes to acquire all of the outstanding common stock of 
RG&E. The acquisition will be accomplished through an exchange 
(``Exchange'') of each outstanding share of RG&E common stock for one 
share of HoldCo common stock. As a result of the Exchange, RG&E will 
become a subsidiary of HoldCo. The Exchange requires the affirmative 
vote of two-thirds of the votes of the outstanding shares of RG&E 
common stock at RG&E annual stockholder meeting, expected to be held on 
April 29, 1999.
    In addition, Holdco would become the direct parent of RG&E's 
nonutility subsidiaries, through a capital contribution by RG&E to 
Holdco of RG&E's interests in those subsidiaries prior to Holdco's 
acquisition of RG&E. These subsidiaries include Energetix, Inc., which 
sells electric capacity and energy at market rates, and RGS Development 
Corporation, which pursues unregulated energy business 
opportunities.\2\
---------------------------------------------------------------------------

    \2\ Another nonutility subsidiary, Energyline Corporation, is 
currently inactive and is expected to be dissolved prior to the 
proposed restructuring.
---------------------------------------------------------------------------

    For the period ending on June 30, 1998, RG&E had annual operating 
revenues of $493.2 million. RG&E is subject to the regulatory authority 
of the New York Public Service Commission.
    HoldCo states that the proposed restructuring plan is intended to 
permit the financial and regulatory flexibility necessary to compete 
more effectively in an increasingly competitive energy industry by 
providing a structure that can accommodate both regulated and 
unregulated businesses.
    HoldCo asserts that following the Exchange, it will be a public 
utility holding company entitled to an exemption under section 3(a)(1) 
of the Act, because it and RG&E will be predominantly intrastate in 
character and will carry on their business substantially in the state 
of New York.

Potomac Edison Company

[70-9373]

    Potomac Edison Company (``Potomac Edison''), a public utility 
subsidiary of Allegheny Energy Inc. (``Allegheny''), a registered 
holding company, located at 10435 Downsville Pike, Hagerstown, 
Maryland, has filed an application under section 9(c)(3) of the Act.
    Potomac Edison proposes, through December 31, 2001, to invest up to 
$250,000 to engage in preliminary development activities in connection 
with a joint venture project to develop a business and technology park. 
Preliminary development activities may include negotiations with real 
estate developers, preliminary engineering and licensing activities, 
contract drafting, consultations with tax, legal and other 
professionals, and other necessary activities.
    Potomac Edison represents that the activities of the joint venture 
would be limited to the development, lease and or sale of a parcel of 
land located adjacent to Potomac Edison's and Allegheny's headquarters 
in Hagerstown, Maryland (``Property''). It is anticipated that once the 
joint venture is formed, the real estate developer would manage its 
day-to-day operations, Potomac Edison would transfer the Property to 
the joint venture, and the developer would provide capital for and 
oversee the development and market the Property as a business and 
technology park.\3\
---------------------------------------------------------------------------

    \3\ Development activities are intended to include installation 
of the infrastructure (water, sewer and other utilities), roads and 
other amenities, and subdivision of the Property as necessary to 
create buildable and saleable lots.
---------------------------------------------------------------------------

    Potomac Edison states that it will not enter into the joint venture 
arrangement without prior Commission approval.

New Century Energies, Inc., et al.

[70-9397]

    New Century Energies, Inc. (``NCE''), a registered holding company; 
NCE's utility subsidiaries, Public Service Company of Colorado 
(``PSCo'') and Cheyenne Light, Fuel and Power Company (``Cheyenne''); 
NCE's nonutility subsidiaries, New Century Services, Inc. (``NCS''), 
West Gas Interstate, Inc., NC Enterprises, Inc. (``Enterprises''), New 
Century International, Inc., e prime, inc. (``e prime''), PS Colorado 
Credit Corporation (``PSCCC''), Natural Fuels Corporation, P.S.R. 
Investments, Inc., Green and Clear Lakes Company, 1480 Welton, Inc., 
The Planergy Group, Inc.,

[[Page 6126]]

and New Century-Cadence, Inc., each located at 1225 17th Street, 
Denver, Colorado 80202-5533; NCE's utility subsidiary, Southwestern 
Public Service Company (together with PSCo and Cheyenne, ``Utility 
Subsidiaries''); and NCE's nonutility subsidiaries, Quixx Corporation 
(``Quixx'') and Utility Engineering Corporation (``UEC''), each located 
at Tyler at Sixth, Amarillo, Texas 79101 (collectively, 
``Applicants''), 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 43, 45, 
46, 54 and 87 under the Act.\4\
---------------------------------------------------------------------------

    \4\ Except as otherwise noted, the term ``Nonutility 
Subsidiaries'' means each of the direct and indirect nonutility 
subsidiaries of NCE, including those identified above, and their 
respective subsidiaries, and the term ``Subsidiaries'' means the 
Utility Subsidiaries and the Nonutility Subsidiaries. In addition, 
the term ``Nonutility Subsidiaries'' refers to any future direct or 
indirect nonutility subsidiaries of NCE whose equity securities may 
be acquired in accordance with the Commission's authorization or in 
accordance with an exemption provided under the Act or rules under 
the Act.
---------------------------------------------------------------------------

    As described more fully below, Applicants seek authority through 
December 31, 2001 (the ``Authorization Period''), except as otherwise 
noted, for: (i) external financings by NCE and Cheyenne; (ii) 
intrasystem financing, including guarantees, between NCE and certain of 
the Subsidiaries, and among certain of the Subsidiaries; (iii) NCE and, 
to the extent not exempt under rule 52, the Subsidiaries to enter into 
hedging transactions for existing and anticipated debt in order to 
manage interest rate costs; (iv) the issuance by the Subsidiaries of 
types of securities not exempt under rules 45 and 52; (v) NCE and the 
Subsidiaries to establish, guarantee the obligations of, and borrow the 
proceeds of the debt and equity issued by, one or more financing 
entities (``Financing Subsidiaries''); (vi) NCE, Enterprises and any 
direct or indirect subsidiary of Enterprises to acquire the equity 
securities of one or more intermediate subsidiaries organized for the 
purpose of acquiring, financing, and holding the securities of one or 
more Nonutility Subsidiaries; (vii) Enterprises and any direct or 
indirect subsidiary of Enterprises to pay dividends out of capital and 
unearned surplus; and (viii) the Nonutility Subsidiaries to sell goods 
and services to certain nonutility associates at fair market prices, 
under an exemption from section 13(b) of the Act.
    The proceeds from the financings will be used for general corporate 
purposes, including: (i) capital expenditures of NCE and the 
Subsidiaries, (ii) repayment, redemption, refunding or purchase of 
securities of NCE or the Subsidiaries in transactions exempt under rule 
42, (iii) working capital requirements of NCE and the Subsidiaries, and 
(iv) other lawful general purposes.\5\ Applicants represent that no 
financing proceeds will be used to acquire the equity securities of any 
new subsidiary, unless that acquisition has been approved by the 
Commission or is under an available exemption under the Act or rules 
under the Act. In addition, Applicants represent that any use of 
proceeds to make investments in any of the Subsidiaries formed under 
rule 58 will be subject to the investment limitation of the rule, and 
any use of proceeds to make investments in any exempt wholesale 
generator (``EWG'') or foreign utility company (``FUCO'') will be 
subject to the investment limitation of rule 53, as it may be modified 
by order of the Commission in file no. 70-9341.\6\
---------------------------------------------------------------------------

    \5\ This includes the refinancing of interests held by 
Enterprises in Yorkshire Power Group Limited (``Yorkshire''), which 
indirectly owns a foreign utility company in the United Kingdom, 
Yorkshire Electricity Group plc. NCE plans to make advances or cash 
capital contributions to Enterprises to enable Enterprises to prepay 
in whole or in part a note issued to PSC to finance Enterprises' 
acquisition from PSCo of a 50% interest in Yorkshire.
    \6\ In that filing, NCE is requesting authority to invest in 
EWGs and FUCOs the proceeds of securities it issues in amounts 
aggregating up to 100% of its consolidated retained earnings.
---------------------------------------------------------------------------

    By orders dated August 1, 1997 and May 14, 1998 (HCAR Nos. 26750 
and 26872, respectively), NCE and certain Subsidiaries were authorized 
to engage in, among other things, various external and intrasystem 
financing transactions through December 31, 1999. These companies will 
relinquish the authority granted in those orders on the effective date 
of an order by the Commission in this proceeding approving the proposed 
transactions.

1. NCE External Financings

a. Common Stock
    NCE requests authority to issue and sell from time to time up to 
$1.25 billion of its common stock, $1 par value per share. In addition, 
NCE requests authority to issue an additional 30 million shares of 
common stock (subject to adjustment to reflect any stock split) from 
time to time through December 31, 2008 under its benefit and dividend 
reinvestment plans. NCE also proposes to issue options exercisable for 
Common Stock and issue Common Stock upon the exercise of those options.
b. Debt
    NCE requests authority to issue and sell from time to time debt 
securities to nonassociates in an aggregate principal amount of up to 
$600 million outstanding at any one time (``NCE Debt Limitation''). 
These debt securities will consist of short-term debt having a maturity 
from the date of issue of not more than one year and unsecured 
debentures (``Debentures'') having a maturity of up to 40 years. The 
aggregate principal amount of Debentures at any time outstanding will 
not exceed $300 million. In addition, NCE proposes that the NCE Debt 
Limitation be increased to $975 million, of which $450 million will 
consist of Debentures, if and when PSCCC \7\ becomes a direct 
subsidiary of NCE.
---------------------------------------------------------------------------

    \7\ PSCCC, currently a subsidiary of PSCo, is engaged in 
financing and factoring fuel inventories and accounts receivable.
---------------------------------------------------------------------------

    Short-term debt may consist of bank borrowings which would mature 
in no more than one year from the date of the borrowing, or commercial 
paper issued to dealers. In addition, NCE may engage in other types of 
short-term financing generally available to borrowers with comparable 
credit ratings as it may deem appropriate in light of its needs and 
market conditions at the time of issuance.
    Interest rates on the Debentures of one or more series may be 
fixed, floating or ``multi-modal'', i.e., interest rates that are 
periodically reset, alternating between fixed and floating interest 
rates for each reset period. NCE represents that it will not issue any 
Debentures that are not rated at least investment grade at the time of 
original issuance by a nationally recognized statistical rating 
organization, without further Commission authorization.
c. Other Securities
    NCE also request authority to issue and sell other securities not 
specifically identified above. NCE requests that the Commission reserve 
jurisdiction over the issuance of securities other than common stock, 
short-term debt and Debentures, and represents that it will file a 
post-effective amendment in this proceeding to supplement the record 
for any other securities.

2. Utility Subsidiary External Financing

a. Cheyenne Short-Term Debt
    Cheyenne requests authority to issue and sell from time to time up 
to $40 million of short-term debt to nonassociates. The short-term 
financing could include, without limitation, commercial paper sold in 
established domestic or European commercial paper markets, bank lines 
and debt securities issued under Cheyenne's indentures and note 
programs. Maturities of short-term borrowings will not be greater than 
one year from the date of each loan.

[[Page 6127]]

b. Other Securities
    The Utility Subsidiaries also proposed to issue and sell other 
types of securities to nonassociates which do not qualify for exemption 
under rule 52 but which are considered appropriate during the 
Authorization Period. Accordingly, the Utility Subsidiaries request 
that the Commission reserve jurisdiction over the issuance of these 
additional types of securities. The Utility Subsidiaries state they 
will file a post-effective amendment in this proceeding which will 
describe the general terms and amounts of each security and request a 
supplemental order of the Commission authorizing the issuance of that 
security.

3. Nonutility Subsidiary External Financings

    Applicants believe that, in almost all cases, borrowings by the 
Nonutility Subsidiaries will be exempt from prior Commission 
authorization under rule 52(b). However, the Nonutility Subsidiaries 
request that the Commission reserve jurisdiction over the issuance of 
any other securities to nonassociates where the exemption under rule 
52(b) would not apply. The Nonutility Subsidiaries state they will file 
a post-effective amendment in this proceeding which will describe the 
general terms and amounts of each security and requet a supplemental 
order authorizing the issuance of that security.

4. Intrasystem Financing

a. General
    NCE requests authority to provide financing to the Subsidiaries and 
the Subsidiaries propose to provide financing to other Subsidiaries in 
aggregate principal amount of up to $500 million outstanding at any one 
time, exclusive of financing that is exempt under rule 45(b) or rule 
52. These financings will generally be in the form of cash capital 
contributions, open account advances, inter-company loans, and/or 
capital stock purchases. Intrasystem financing will provide funds for 
general corporate purposes and other working capital requirements, 
investments and capital expenditures. NCE or the lending Subsidiary 
will determine, at its discretion, how much financing to give each 
borrowing Subsidiary as its needs dictate during the Authorization 
Period.
b. Guarantees
    NCE requests auhtority to enter into guarantees and provide other 
forms of credit support (``NCE Guarantees'') for obligations of any 
Subsidiary in an aggregate principal amount not to exceed $800 million 
at any one time outstanding, exclusive of any guarantees or other forms 
of credit support that are exempt under rule 45(b); provided, however, 
that if and when PSCCC becomes a direct subsidiary of NCE, NCE may 
provide guarantees and other forms of credit support in an aggregate 
amount not to exceed $850 million (``NCE Guarantee Limitation'').
    In addition, the Subsidiaries request authority to issue guarantees 
and other forms of credit support (``Subsidiary Guarantees,'' and 
together with NCE Guarantees, ``Guarantees'') for obligations of other 
Subsidiaries in an aggregate principal amount not to exceed $100 
million at any one time outstanding, exclusive of guarantees that are 
exempt under rule 45(b) and rule 52 (``Subsidiary Guarantee 
Limitation''). Applicants propose that the amount of NCE Guarantees and 
Subisidiary Guarantees outstanding at any one time not be counted 
against the aggregate limits proposed in this filing for external 
financings or intrasystem financing.

5. Hedge Transactions

    NCE and, to the extent not exempt under rule 52, the Subsidiaries 
request authority to enter into hedging transactions (Interest Rate 
Hedges'') with respect to existing indebtedness of these companies in 
order to manage and minimize interest rate costs. Interest Rate Hedges 
would only be entered into with counterparties which either have senior 
debt ratings, or are owned by companies that have senior debt ratings, 
equal to or greater than BBB, as published by Standard and Poor's 
Rating Group, or an equivalent rating from Moody's Investors Service, 
Fitch Investor Service or Duff & Phelps. Interest Rate Hedges will 
involve the use of financial instruments commonly used in today's 
capital markets, such as interest rate swaps, caps, collars floors, and 
structured notes (i.e., debt instrument in which the principal and/or 
interest payments are indirectly linked to the value of an underlying 
asset or index), or transactions involving the purchase or sale, 
including short sales, of U.S. Treasury securities.
    NCE and the Subsidiaries also request authority to enter into 
Interest Rate Hedges with respect to anticipated debt issuances in 
order to lock-in current interest rates and/or manage interest rate 
risk exposure. These transactions would use: (i) a forward sale of U.S. 
Treasury futures contracts, U.S. Treasury securities and/or a forward 
swap (each a ``Forward Sale''), (ii) the purchase of put options on 
U.S. Treasury securities (a ``Put Options Purchase''), (iii) a Put 
Options Purchase in combination with the sale of call options on U.S. 
Treasury securities (a ``Zero Cost Collar''), (iv) transactions 
involving the purchase or sale, including short sales, of U.S. Treasury 
securities, or (v) some combination of a Forward Sale, Put Options 
Purchase, Zero Cost Collar and/or other derivative or cash 
transactions, including structured notes, caps and collars.

6. Financing Subsidiaries

    NCE and the Subsidiaries request authority to acquire, directly or 
indirectly, the equity securities of one or more corporations, trusts, 
partnerships or other entities created specifically for the purpose of 
facilitating the financing of the activities of NCE and the 
Subsidiaries. The Financing Subsidiaries would issue long term debt or 
equity to third parties and transfer the proceeds of these financings 
to NCE or associate companies in the NCE holding company system. If the 
direct parent of a Financing Subsidiary is authorized in this or nay 
subsequent proceeding to issue long term debt or equity securities of a 
type similar to that issued by the Financing Subsidiary, then the 
amount of those securities issued by that Financing Subsidiary would 
count against the limitation applicable to its parent for those 
securities. In these cases, however, Guarantees entered into by the 
parent with respect to those securities would not count against the NCE 
Guarantee Limitation or the Subsidiary Guarantee Limitation, as the 
case may be. If the parent is not authorized in this or in a subsequent 
proceeding to issue long term debt or an equity security similar in 
type to the security issued by its Financing Subsidiary, then any 
Guarantee not exempt under rule 45 or 52 that is entered into by the 
parent for those securities would count against the NCE Guarantee 
Limitation or Subsidiary Guarantee Limitation, as the case may be.

7. Intermediate Subsidiaries

    NCE, Enterprises \8\ and Enterprises' subsidiaries request 
authority to acquire the equity securities of one or more intermediate 
subsidiaries (``Intermediate Subsidiaries'') organized for the purpose 
of acquiring, financing, and holding the securities of one or more 
Nonutility Subsidiaries. The Intermediate Subsidiaries may also provide 
management, administrative, project

[[Page 6128]]

development, and operating services to these Nonutility Subsidiaries.
---------------------------------------------------------------------------

    \8\ Enterprises serves as an intermediate holding company for 
certain of NCE's nonutility subsidiaries and investments.
---------------------------------------------------------------------------

8. Payment Of Dividends Out of Capital and Unearned Surplus

    Enterprises and any direct or indirect subsidiary of Enterprises 
request authority to pay dividends out of capital and unearned surplus 
to the extent allowed under applicable law and under the terms of any 
credit or security instruments to which they may be parties.

9. Exemption From Section 13(b)

    Certain Nonutility Subsidiaries \9\ are currently authorized, by 
order dated August 1, 1997 (HCAR No. 26748), to provide services and 
goods at fair market prices to associate companies that are EWGs, FUCOs 
or qualifying facilities (``OFs''), subject to certain restrictions. 
NCE and the Nonutility Subsidiaries now wish to expand the scope of 
this exemption in two respects. First, those Subsidiaries which may 
sell services or goods under an exemption from the cost standard of 
section 13(b) to associate nonutility companies would be expanded to 
also include all Nonutility Subsidiaries. Second, NCE wishes to expand 
the categories of Nonutility Subsidiaries to which services and goods 
may be sold to also include exempt telecommunications companies 
(``ETCs''), subsidiaries formed under rule 58 (``Rule 58 
Subsidiaries''), and other Nonutility Subsidiaries that do not derive 
any part of their income from sales of goods or services to any of the 
Utility Subsidiaries.
---------------------------------------------------------------------------

    \9\ These include NCS, UEC, Quixx, Quixx Power Services, Inc., 
Universal Utility Services Company, Precision Resource Company, e 
prime, e prime Operating, Inc. and ep3, L.P.
---------------------------------------------------------------------------

    Accordingly, NCS and the Nonutility Subsidiaries request an 
exemption under section 13(b) of the Act to provide goods and services 
to any associate company (a ``Client Company'') at fair market prices, 
if:
    (i) The Client Company is a FUCO or foreign EWG which derives no 
part of its income, directly or indirectly, from the generation, 
transmission, or distribution of electric energy for sale within the 
United States;
    (ii) The Client Company is an EWG which sells electricity at 
market-based rates which have been approved by the Federal Energy 
Regulatory Commission (``FERC''), provided that the purchaser is not a 
Utility Subsidiary;
    (iii) The Client Company is a QF within the meaning of the Public 
Utility Regulatory Policy Act of 1978 (``PURPA'') that sells 
electricity exclusively (a) at rates negotiated at arms' length to one 
or more industrial or commercial customers purchasing that electricity 
for their own use and not for resale, and/or (b) to an electric utility 
company other than a Utility Subsidiary at the purchaser's ``avoided 
cost'' as determined in accordance with the regulations under PURPA;
    (iv) The Client Company is a domestic EWG or QF that sells 
electricity at rates based upon its cost of service, as approved by 
FERC or any state public utility commission having jurisdiction, 
provided that the purchaser is not a Utility Subsidiary; or
    (v) The Client Company is an ETC, a Rule 58 Subsidiary, or a 
Nonutility Subsidiary that does not derive any part of its income from 
sales of goods, services or other property to a Utility Subsidiary.

    For the Commission by the Division of Investment Management, 
under delegated authority.
Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 99-2894 Filed 2-5-99; 8:45 am]
BILLING CODE 8010-01-M