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U.S. Securities and Exchange Commission

SECURITIES AND EXCHANGE COMMISSION

(Release No. 35-27794; 70-9609)

Energy East Corporation, et al.

Supplemental Order Authorizing Use of Certain Investment Grade Criteria in Regard to the Issuance of Certain Securities; and Reservation of Jurisdiction

January 29, 2004

Energy East Corporation ("Energy East"), Albany, New York, a registered holding company under the Public Utility Holding Company Act of 1935, as amended ("Act") and its direct and indirect subsidiaries listed below (collectively, "Applicants"), have filed with the Securities and Exchange Commission ("Commission") a post-effective amendment ("Post-Effective Amendment") to their previously filed application-declaration, as amended ("Declaration") which was filed under sections 6(a), 7, 9(a), 10, 12(b), 12(c), 13(b), 32 and 33 of the Act and rules 45, 46, 54, and 80-92 under the Act. The other Applicants are: (1) Energy East Enterprises, Inc., Albany, New York, a wholly owned subsidiary of Energy East and a public utility holding company exempt from registration by order of the Commission under section 3(a)(1) of the Act; (2) Maine Natural Gas Corporation, Albany, New York, a wholly owned subsidiary of Energy East; (3) Energy East Capital Trust 1, Albany, New York, a wholly owned subsidiary of Energy East; (4) RGS Energy Group, Inc., Rochester, New York, a wholly owned subsidiary of Energy East and a public utility holding company exempt from registration by order of the Commission under section 3(a)(1) of the Act; (5) New York State Electric & Gas Corporation, Rochester, New York, a wholly owned gas and electric utility subsidiary of RGS Energy Group, Inc.; (6) Rochester Gas and Electric Corporation, Rochester, New York, a wholly owned gas and electric utility subsidiary of RGS Energy Group, Inc.; (7) CMP Group, Inc., Augusta, Maine, a wholly owned subsidiary of Energy East and a public utility holding company exempt from registration by order of the Commission under section 3(a)(1) of the Act; (8) Central Maine Power Company, Augusta, Maine, a wholly owned subsidiary of CMP Group, Inc., and a public utility holding company exempt from registration by order of the Commission under section 3(a)(1) of the Act; (9) Maine Electric Power Company, Inc., Augusta, Maine, a majority owned electric utility subsidiary of CMP Group, Inc.; (10) NORVARCO, Augusta, Maine, a wholly owned subsidiary of Central Maine Power Company; (11) Connecticut Energy Corporation, Bridgeport, Connecticut, a wholly owned subsidiary of Energy East and a public utility holding company exempt from registration by order of the Commission under section 3(a)(1) of the Act; (12) The Southern Connecticut Gas Company, Bridgeport, Connecticut, a wholly owned subsidiary of Connecticut Energy Corporation; (13) CTG Resources, Inc. Hartford, Connecticut, a wholly owned subsidiary of Energy East and a public utility holding company exempt from registration by order of the Commission under section 3(a)(1) of the Act; (14) Connecticut Natural Gas Corporation, Hartford, Connecticut, a wholly owned subsidiary of CTG Resources, Inc.; (15) Berkshire Energy Resources, Pittsfield, Massachusetts, a wholly owned subsidiary of Energy East and a public utility holding company exempt from registration by order of the Commission under section 3(a)(1) of the Act; and (16) The Berkshire Gas Company, Pittsfield, Massachusetts, a wholly owned subsidiary of Berkshire Energy Resources. A notice of the filing of the Declaration was issued on October 4, 2002 (Holding Company Act Release No. 35-27573).

By order dated September 12, 2000 (Holding Company Act Release No. 35-27228) ("Financing Order"), the Commission authorized the Applicants to engage in, among other things: (1) ongoing financing activities; (2) intrasystem extensions of credit; (3) the creation, acquisition, or sale of non-utility subsidiaries; and (4) the payment of dividends out of capital and unearned surplus. By a supplemental order dated January 28, 2003 (Holding Company Act Release No. 35-27643) ("Supplemental Order"), the Commission modified the Financing Order to reflect the acquisition by Energy East of RGS Energy Group, Inc.

In the Supplemental Order, Energy East undertook to file the Post-Effective Amendment seeking a release of jurisdiction in regard to the use of certain investment grade criteria in the issuance of certain securities. Applicants represent that, except for issuances of common stock, no guarantees or other securities may be issued in reliance upon the requested authorization unless (1) the security to be issued, if rated, is rated investment grade; (2) all outstanding securities of the issuer that are rated, are rated investment grade; and (3) all outstanding securities of Energy East that are rated, are rated investment grade (collectively, "Investment Grade Ratings Criteria"). For purposes of this provision, a security will be deemed to be rated "investment grade" if it is rated investment grade by at least one "nationally recognized statistical rating organization," as such term is used in paragraphs (c)(2)(vi)(E), (F) and (H) of rule 15c3-1 under the Securities Exchange Act of 1934. Applicants request that the Commission reserve jurisdiction over the issuance of any securities that are rated below investment grade. Applicants further request that the Commission reserve jurisdiction over the issuance of any guarantee or other security at any time that the Investment Grade Ratings Criteria are not satisfied.

Except as modified by this order, the Financing Order as supplemented by the Supplemental Order shall remain in effect and unchanged.

Applicants state that no approval or filing with any state commission is required in connection with the filing of the Post-Effective Amendment. Applicants state that the expenses to be incurred in connection with the preparation and filing of the Post-Effective Amendment are estimated to be approximately $5,000.

Due notice of the filing of the Declaration has been given in the manner prescribed by rule 23 under the Act, and no hearing has been requested of, or ordered by, the Commission. Based on the facts in the record, the Commission finds that, as to the use of the Investment Grade Ratings Criteria, the applicable standards of the Act are satisfied and no adverse findings are necessary.

IT IS ORDERED, under the applicable provisions of the Act and rules under the Act, that the Post-Effective Amendment is permitted to become effective immediately, subject to the terms and conditions prescribed in rule 24 under the Act.

IT IS FURTHER ORDERED, that jurisdiction continues to be reserved over the issuance of any securities that are rated below investment grade and the issuance of any guarantee or other security at any time that the Investment Grade Ratings Criteria are not satisfied.

IT IS FURTHER ORDERED, that jurisdiction continues to be reserved, pending completion of the record, over the other matters listed in the Financing Order and Supplemental Order.

For the Commission, by the Division of Investment Management, pursuant to delegated authority.


Jill M. Peterson
Assistant Secretary


http://www.sec.gov/divisions/investment/opur/filing/35-27794.htm

Modified: 01/02/2004