Applications, hearings, determinations, etc.: Public utility holding company filings,

[Federal Register: July 27, 1998 (Volume 63, Number 143)]

[Notices]

[Page 40142-40143]

From the Federal Register Online via GPO Access [wais.access.gpo.gov]

[DOCID:fr27jy98-109]

SECURITIES AND EXCHANGE COMMISSION

[Release No. 35-26897]

Filing Under the Public Utility Holding Company Act of 1935, as amended (``Act'')

July 20, 1998.

Notice is hereby given that the following filing(s) has/have been made with the Commission pursuant to provisions of the Act and rules promulgated under the Act. All interested persons are referred to the application(s) and/or declaration(s) for 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 August 13, 1998, to the Secretary, Securities and Exchange Commission, Washington, D.C. 20549, and serve a copy on the relevant applicant(s) and/or declaration(s) at the address(es) specified below. Proof of service (by affidavit or, in case of an attorney at law, by certificate) should be filedwith the request. Any request for hearing should identify specifically the issues of fact or law that are disputed. A person who so requests will be notified of any hearing, if ordered, and will receive a copy of any notice or order issued in the matter. After August 13, 1998, the application(s) and/or declaration(s), as filedor as amended, may be granted and/or permitted to become effective.

Sempra Energy, et al. (70-9333)

Sempra Energy (``Sempra''), located at 101 Ash Street, San Diego, California 92101, an exempt holding company under section 3(a)(1) of the Act, and an indirect subsidiary of Sempra, Frontier Pacific, Inc. (`Frontier Pacific''), located at 555 West Fifth Street, Suite 2900, Los Angeles, California 90013-1001, have filedan application under sections 3(a)(1), 9(a)(2), and 10 of the Act.

Applicants seek authority for Frontier Pacific to acquire up to 90.1% of the outstanding shares of Frontier Energy, LLC (``Frontier Energy''), a North Carolina partnership that will construct, own and operate a gas utility distribution system in North Carolina. The remaining membership interests in Frontier Energy would be acquired by a third party, Frontier Utilities of North Carolina, Inc. (``Frontier Utilities''.\1\) In addition, applicants are seeking an order under section 3(a)(1) exempting Sempra, Frontier Pacific, and each of their subsidiary companies from all provisions of the Act, except section 9(a)(2).

\1\ Frontier Utilities is an indirect subsidiary of ARB, Inc., a closely held California corporation. ARB, Inc. is not now a ``holding company'' or an ``affiliate'' of any ``holding company'' or ``public-utility company,'' as defined in section 2 of the Act.

Sempra has two principal subsidiaries, Pacific Enterprises (``Pacific'') and Enova Corporation (``Enova''), each of which is an exempt holding company under section 3(a)(1) of the Act. Pacific's sole utility subsidiary is Southern California Gas Company (``SoCalGas''), which purchases, transports and distributes natural gas in southern California. As of December 31, 1997, Pacific reported consolidated total assets of $4.977 billion, of which approximately $3.154 billion consisted of net gas utility plant. For the year ended December 31, 1997, Pacific reported $2.738 billion in operating revenues (including revenues from transportation-only customers) and $184 million in net income.

Enova's sole utility subsidiary is San Diego Gas & Electric Company (``SDG&E''), which provides electric and natural gas service in San Diego and surrounding areas. As of December 31, 1997, Enova reported consolidated total assets of $5.2 billion, of which approximately $2.49 billion consists of net electric plant and $449 million consists of net gas utility plant. For the year ended December 31, 1997, Enova reported operating revenues of $2.2 billion (81.6% from electricity sales and 18.4% from gas sales) (including revenues from transportation only customers), and $252 million in net income. Both SoCalGas and SDG&E are subject to the jurisdiction of the California Public Utility Commission.

Frontier Pacific, which will directly acquire interests in Frontier Energy, currently is a wholly owned subsidiary of Sempra Energy Solutions, LLC (``Solutions''), itself an indirect subsidiary of Sempra.\2\ However, applicants state that Solutions will transfer the common stock of Frontier Pacific to Sempra prior to the issuance of any order in this filing.

\2\ Solutions currently is jointly owned by Pacific and Enova.

By orders dated January 27, 1996, August 16, 1996, and March 27, 1997, the North Carolina Utilities Commission (``NCUC'') granted Frontier Utilities certificates of public convenience and necessity (``Certificates'') to construct, test, market, own and operate a new

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natural gas distribution system in seven counties in northwestern North Carolina. By order dated March 9, 1998, the NCUC approved various proposals by Frontier Utilities and Frontier Energy related to the financing for the construction of this gas system, including participation by Frontier Pacific as an equity investor in Frontier Energy.\3\ In addition, the NCUC authorized Frontier Utilities to transfer the Certificates to Frontier Energy.

\3\ Specifically, the NCUC authorized Frontier Pacific and Frontier Utilities to contribute approximately $12 million of equity and capital to Frontier Energy. In addition, the NCUC authorized Frontier Energy to borrow $40 million, subject to certain conditions.

Frontier Energy commenced construction in four of the counties during the second quarter of 1998. When complete, the system in these counties will consist of approximately 140 miles of transmission mains, including a 40 mile lateral tap off the interstate pipeline facilities of Transcontinental Gas Pipe Line Corp. and at least 320 miles of distribution mains. Construction in the other counties will commence at a later date. Applicants state that attributable income from Frontier Energy will contribute less than 1% of Sempra's consolidated income on a pro forma basis.

Following the proposed transactions, Sempra and each of its public utility subsidiaries, except Frontier Energy and Frontier Pacific, will be organized in California. Frontier Energy and Frontier Pacific will be organized in North Carolina. Applicants contend that they, and each of their subsidiaries, will qualify for a section 3(a)(1) exemption upon consummation of the proposed transactions.

For the Commission, by the Division of Investment Management, under delegated authority. Jonathan G. Katz, Secretary.

[FR Doc. 98-19982Filed7-24-98; 8:45 am]

BILLING CODE 8010-01-M