Post-Effective Amendment to a U-1 — Form U-1
Filing Table of Contents
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1: POS AMC Pleasants Post-Effective Amendment No. 7 3 9K
2: EX-99 Maryland Application 13 29K
6: EX-99 Maryland Order 2 12K
3: EX-99 Ohio Application 17 57K
7: EX-99 Ohio Order 3 14K
8: EX-99 Pennsylvania Order 2 11K
4: EX-99 Pennsylvania Securities Certificate (Application) 39 111K
5: EX-99 Virginia Application 7 25K
9: EX-99 Virginia Order 2 11K
EX-99 — Maryland Application
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Exhibit D-1(a)
In the Matter of the Application of BEFORE THE
The Potomac Edison Company for PUBLIC SERVICE COMMISSION
authority to issue additional OF MARYLAND
first mortgage bonds, pollution
control notes and preferred stock CASE NO. ________
PETITION
The petition of The Potomac Edison Company ("Potomac") respectfully
shows:
1. Potomac is a Maryland and Virginia corporation and a public
service company subject to the jurisdiction of the Commission
as fully appears in former proceedings before this Commission.
2. Potomac has authority for general corporate purposes: to
issue up to $90 million of bonds (Case No. 8498) and
anticipates issuing $75 million in 1994; to issue up to $52.4
million of solid waste disposal notes (Case No. 8490) and
$13.990 million were issued on May 26, 1993. Potomac
anticipates issuing additional solid waste disposal notes,
however the timing and amount will depend upon the West
Virginia cap for issuance of industrial or commercial
development bonds. Potomac issued $50 million of common stock
(Case No. 8548) on October 15, 1993.
3. After January 1, 1994 and prior to December 31, 1995 Potomac
also proposes, for refinancing purposes, to issue for cash to
the general public, an aggregate principal amount of not more
than $195 000 000 of first mortgage bonds (the "Bonds"). The
Bonds shall be issued in one or more new series, each such
series to have a single maturity of not more than thirty (30)
years. Potomac anticipates that the Bonds will be issued
through underwriters after competitive bidding. However, in
order to deal with market conditions as they exist at the
time, Potomac requests the flexibility to issue the Bonds
through negotiation with underwriters or through private
placement with institutional investors if such procedures are
deemed more economic.
4. It is difficult to determine, under present bond market
conditions, whether it would be more advantageous to Potomac
to sell bonds having a 30-year or some shorter maturity.
Potomac desires to have available sufficient flexibility to
adjust its financing program to developments in the market for
long-term debt securities when and as they occur, in order to
obtain the best possible price or prices and interest rate or
rates for the Bonds.
5. It is proposed that Potomac decide on the number of series and
the maturity of the Bonds at a later time and notify
prospective purchasing underwriters as required by the
Securities and Exchange Commission ("SEC").
6. The Bonds are to be issued under the Indenture as of
October 1, 1944, between Potomac and Chemical Bank, as
Trustee, and Thomas J. Foley, as Individual Trustee, as
heretofore supplemented and amended, and under an indenture
supplemental thereto. The Bonds are to bear interest payable
semi-annually. Copies of the Indenture and the First through
Eighty-sixth Supplemental Indentures, inclusive, are filed in,
or in cases referred to in, the petition in Case No. 8530.
7. Potomac may elect to sell the Bonds through an alternative
competitive bidding procedure consistent with SEC Rule 50 as
described in SEC Release No. 35-22623 of September 2, 1982.
The Bonds will be registered with the SEC pursuant to a Rule
415 "shelf registration." The price or prices to be paid to
Potomac and the interest rate or rates will be determined by
such competitive bidding. The interest rate or rates, the
price or prices to Potomac and the public offering price or
prices, if any, of the Bonds, and the prices at which the
Bonds may be redeemed, are to be determined, and the award of
the Bonds is to be made, in accordance with the bid which
offers the lowest cost of money to Potomac. In the event,
however, that market or other conditions make competitive
bidding impracticable or undesirable, Potomac proposes to
negotiate with underwriters for the purchase of the Bonds or
privately place the bonds with institutional investors. Under
such circumstances the interest rate or rates and the price or
prices to be paid Potomac will be determined by such
negotiations.
8. Potomac will use the net proceeds of the Bonds to be issued
for the refunding prior to their respective maturities of $80
million aggregate principal amount of its first mortgage
bonds, 9-5/8% Series issued 1990 due 2020 and $50 million
aggregate principal amount of its first mortgage bonds, 8-7/8%
Series issued 1991 due 2021 through a non-coercive tender
offer, if economically justified, and to refund prior to
maturity after June 1, 1994 $65 million aggregate principal
amount of its first mortgage bonds, 9-1/4% Series issued 1989
due 2019.
9. Potomac also proposes to enter into a transaction involving
the refinancing of an issue of tax-exempt revenue bonds (the
"Series B Bonds") issued by the Pleasants County Commission of
West Virginia (the "County Commission"), the proceeds of which
were used to finance the cost of installation of certain air
pollution control equipment improvement at the Pleasants
Generating Station. The pollution control equipment was
installed in order to meet West Virginia and federal air
quality standards as to particulate emissions. This
Commission by its Order dated July 14, 1978 in Case No. 7245
previously authorized Potomac's issuance of up to $21 million
of pollution control notes concerning the above referenced
Series B Bonds.
The Series B Bonds were issued in August, 1978 by
Pleasants County ($21 000 000), bear interest at the rate of
7.30% per annum, mature on August 1, 2008, and after August 1,
1993 are subject to optional redemption at 100-1/2% of the
principal amount plus accrued interest. The optional
redemption price changes to 100% on August 1, 1994 and
thereafter. It is expected that Pleasants County will issue
a new series of bonds (the "Series C Bonds") for the purpose
of providing a portion of the funds required to redeem the
County's Series B Bonds. Pleasants County's new Series C
Bonds will be in an aggregate principal amount equal to the
aggregate principal amount of the County's Series B Bonds
outstanding at the time of the refinancing, which is the
maximum amount permitted by the Internal Revenue Code for a
refinancing of this type. The new Series C Bonds will be sold
at such times, in such principal amount, at such interest
rates, and for such prices as shall be approved by Potomac.
The timing of any such refinancing will depend on a
determination by Potomac of market conditions which are
expected to prevail through the maturity of the Series B
Bonds.
Potomac will deliver concurrently with the issuance of
the Series C Bonds, its non-negotiable Pollution Control Note
corresponding to such series of Bonds in respect of principal
amount, interest rates and redemption provisions and having
installments of principal corresponding to any mandatory
sinking fund payments and stated maturities. Payments on such
Note will be made to the Trustee and applied by the Trustee to
pay the maturing principal and redemption price of and
interest and other costs on the Series C Bonds as the same
become due.
10. Title to the pollution control equipment will remain with
Potomac subject to the second lien granted by Potomac on the
equipment to the County Commission in accordance with the
terms of the Pollution Control Financing Agreement, the Trust
Indenture and the Security Agreement reviewed and approved by
the Commission in Case No. 7245.
11. It is expected that the County Commission will engage Goldman,
Sachs & Co., and any co-managers that may be desirable, for
the purpose of providing financial advice and underwriting the
sale of the Bonds. Potomac has been informed that the County
Commission has the legal authority to issue tax-exempt revenue
bonds in accordance with the documents and Potomac understands
that a legal opinion to that effect will be delivered to
appropriate parties at, or prior to, the closing. The new
Series C Bonds, which will be in registered form, will bear
interest semi-annually at a rate to be determined and will be
issued pursuant to the Trust Indenture. The Trust Indenture
provides for a mandatory redemption of the Bonds under certain
circumstances. In addition, the new Series C Bonds will be
subject to redemption at the option of the County Commission,
exercised at the direction of Potomac, in accordance with the
provisions contained in the form of Bond.
12. The proceeds from the sale of the Series B Bonds by the County
Commission were applied to purchase and complete construction
of the pollution control equipment. By virtue of title
retention provisions of the Purchase Agreement and Indenture,
the new Series C Bonds will be secured by a second lien on the
pollution control equipment owned by Potomac. The Trust
Indenture requires that such pollution control equipment be
free of any lien or encumbrance except for certain liens
permitted by the Purchase Agreement. The new Series C Bonds
will be issued pursuant to a supplemental indenture with
specific provisions to be determined at the time of issuance.
The supplemental indenture will also provide that all the
proceeds of the sale of the new Series C Bonds by the County
Commission must be applied to the cost of the refinancing of
the Series B Bonds.
Potomac and the other owners of the Pleasants
Generating Station will continue to have complete control of
the operation of the pollution control equipment and will be
responsible for its maintenance.
13. Also, Potomac proposes to issue up to 150 000 additional
shares of its cumulative preferred stock with a par value of
up to $100 per share.
14. Potomac anticipates that the preferred stock will be issued
through underwriters after competitive bidding. However, in
order to deal with market conditions as they exist at the
time, Potomac requests the flexibility to issue the preferred
stock through negotiation with underwriters or through private
placement with institutional investors if such procedures are
deemed more economic.
15. The preferred stock will be redeemable in whole or in part at
any time or from time to time (except that prior to ten (10)
years (or such other date as the Company may choose) after the
first day of the month in which the preferred stock is issued,
such stock may not be redeemed directly or indirectly with or
in anticipation of monies borrowed at a cost of money to
Potomac less than the cost of money to it in respect of such
preferred stock) at the option of Potomac, after notice, on
payment of their principal amount plus accrued unpaid
interest, together with a premium that will initially be no
greater than the interest rate and will decline to zero at or
before maturity. The preferred stock may carry a 10-year (or
such other date as the Company may choose) no call provision.
16. Potomac anticipates selling the preferred stock through the
alternate competitive bidding procedures consistent with SEC
Rule 50 as described in SEC Release No. 35-22623 of
September 2, 1982 and SEC Rule 415 "Shelf-Registration." The
price or prices to be paid to Potomac and the dividend rate or
rates would be determined by such competitive bidding. The
dividend rate or rates, the price or prices to Potomac and the
public offering price or prices, if any, of the preferred
stock, and the prices at which the preferred stock may be
redeemed, are to be determined, and the award of the preferred
is to be made, in accordance with the bid which offers the
lowest cost of money to Potomac. In the event, however, that
market or other conditions make competitive bidding
impracticable or undesirable, Potomac proposes to negotiate
with underwriters for the purchase of the preferred stock or
privately place the preferred stock with institutional
investors. Under such circumstances the dividend rate or
rates and the price or prices to be paid Potomac will be
determined by such negotiations. A copy of the proposed form
of public invitation for bid for the purchase of the preferred
stock, including the proposed form of bid and purchase
contract will be filed herein when available as exhibit DFZ-2
as part of the direct testimony and exhibits of Dale F.
Zimmerman filed as part of this petition.
17. Potomac will use the proceeds of the preferred stock proposed
to be issued for the refunding of $5 million of its $8.32
Cumulative Preferred Stock, Series F, and $10 million of its
$8.00 Cumulative Preferred Stock, Series G.
18. Potomac files as part hereof the direct testimony and exhibits
of Dale F. Zimmerman detailing the proposed transactions and
including as Exhibit DFZ-3 the financial condition of Potomac.
19. There is appended hereto an affidavit made by three of the
directors of Potomac showing that it is the intention of
Potomac, in good faith, to use the proceeds of the Bonds,
Pollution Control Notes and Preferred Stock proposed to be
issued for the purposes set forth in this petition.
20. No franchise or right of Potomac is capitalized, directly or
indirectly, except as authorized by the Public Service
Commission Law.
WHEREFORE, Potomac prays that the Public Service Commission of
Maryland, by its order, authorize the issuance by it of additional Bonds,
Pollution Control Notes and Preferred Stock as set forth in this petition
and take such further action in the premises as may be requisite.
Respectfully submitted,
THE POTOMAC EDISON COMPANY
DALE F. ZIMMERMAN
Dale F. Zimmerman
Secretary & Treasurer
Counsel:
PHILIP J. BRAY
Philip J. Bray, Esq.
Attorney-at-Law
The Potomac Edison Company Building
10435 Downsville Pike
Hagerstown, MD 21740-1766
(301) 790-6283
November 24, 1993
A F F I D A V I T
STATE OF MARYLAND )
) ss:
COUNTY OF WASHINGTON )
I HEREBY CERTIFY that on this _________ day of November, 1993,
before me, the subscriber, a Notary Public of the State of Maryland, in
and for the County of Washington, personally appeared Dale F. Zimmerman,
Secretary and Treasurer of The Potomac Edison Company, and made oath in
due form of law that the matters and facts set forth in the foregoing
Petition including his direct testimony and exhibits are true to the best
of his knowledge, information and belief.
WITNESS my hand and notarial seal, the day and year last above
written.
PATTI M. SOWERS
Patti M. Sowers
Notary Public
My Commission expires December 1, 1994.
(NOTARIAL SEAL)
PAGE 1 OF 2
AFFIDAVIT OF THREE DIRECTORS
STATE OF NEW YORK )
) ss:
COUNTY OF NEW YORK )
I HEREBY CERTIFY that on this ______ day of November, 1993, before
me the subscriber, a Notary Public of the State of New York, in and for
the County of New York aforesaid, personally appeared Messrs. K. Bergman
and S. I. Garnett, II, two of the directors of The Potomac Edison Company
("Potomac"), and made oath in due form of law that they are directors of
Potomac; that they have read the foregoing Petition; and that it is the
intention of Potomac in good faith to use the proceeds of the Common or
Preferred Stock proposed to be issued for the purpose set forth in said
Petition.
WITNESS my hand and notarial seal, the day and year last above
written.
______________________________
Notary Public
(NOTARIAL SEAL)
PAGE 2 OF 2
AFFIDAVIT OF THREE DIRECTORS
STATE OF MARYLAND )
) ss:
COUNTY OF WASHINGTON )
I HEREBY CERTIFY that on this _______ day of November, 1993, before
me the subscriber, a Notary Public of the State of Maryland, in and for
the County of Washington aforesaid, personally appeared Mr. A. J. Noia, a
director of The Potomac Edison Company ("Potomac"), and made oath in due
form of law that he is a director of Potomac; that he has read the
foregoing Petition; and that it is the intention of Potomac in good faith
to use the proceeds of the Common or Preferred Stock proposed to be issued
for the purpose set forth in said Petition.
WITNESS my hand and notarial seal, the day and year last above written.
_________________________
Notary Public
(NOTARIAL SEAL)
My commission expires December 1, 1994.
Dates Referenced Herein and Documents Incorporated by Reference
| Referenced-On Page |
|---|
| This ‘POS AMC’ Filing | | Date | | First | | Last | | | Other Filings |
|---|
| |  |
| | 8/1/08 | | 4 |
| | 12/31/95 | | 1 | | | | | 10-K405 |
| | 12/1/94 | | 11 | | 13 |
| | 8/1/94 | | 4 |
| | 6/1/94 | | 3 |
| Filed on: | | 4/4/94 |
| | 1/1/94 | | 1 |
| | 11/24/93 | | 9 |
| | 10/15/93 | | 1 |
| | 8/1/93 | | 4 |
| | 5/26/93 | | 1 |
| List all Filings |
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