File No. 70-9967
As filed with the Securities and Exchange Commission on January 29, 2002
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
AMENDMENT NO. 3
TO
FORM U-1 APPLICATION-DECLARATION
UNDER
THE PUBLIC UTILITY HOLDING COMPANY ACT OF 1935
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DOMINION RESOURCES, INC.
120 Tredegar Street
Richmond, VA 23219
(a registered holding company and
the parent of the other parties)
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DOMINION ENERGY, INC.
ELWOOD ENERGY, LLC
DOMINION RESERVES, INC.
DOMINION OHIO ES, INC.
DOMINION RESOURCES SERVICES, INC.
DOMINION ALLIANCE HOLDING, INC.
ELWOOD II HOLDINGS, LLC
ELWOOD III HOLDINGS, LLC
KINCAID GENERATION, LLC
DT SERVICES, INC.
DOMINION METERING SERVICES, INC.
DOMINION ENERGY TECHNOLOGIES, INC.
CONSOLIDATED NATURAL GAS COMPANY
CNG COAL COMPANY
CNG INTERNATIONAL CORPORATION
DOMINION IROQUOIS, INC.
CNG PIPELINE COMPANY
CNG POWER SERVICES CORPORATION
DOMINION EXPLORATION & PRODUCTION, INC.
DOMINION PRODUCTS AND SERVICES, INC.
DOMINION RETAIL, INC.
DOMINION FIELD SERVICES, INC.
DOMINION MEMBER SERVICES, INC.
DOMINION TRANSMISSION, INC.
THE EAST OHIO GAS COMPANY
HOPE GAS, INC.
THE PEOPLES NATURAL GAS COMPANY
CNG MAIN PASS GAS GATHERING CORPORATION
CNG OIL GATHERING CORPORATION
DOMINION OKLAHOMA TEXAS EXPLORATION & PRODUCTION, INC.
DOMINION GREENBRIER, INC.
DOMINION NATURAL GAS STORAGE, INC.
James F. Stutts
Vice President and General Counsel
Dominion Resources, Inc.
120 Tredegar Street
Richmond, VA 23219
(Name and address of agent for service)
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The Commission is also requested to send copies
of any communication in connection with this matter to:
Norbert F. Chandler, Esq.
Managing Counsel
Dominion Resources Services, Inc.
Dominion Tower, 625 Liberty Avenue
Pittsburgh, PA 15222
File No. 70-9967
AMENDMENT NO. 3
TO
APPLICATION-DECLARATION
UNDER
SECTIONS 12(b) and 12(f)
AND
RULES 43, 45 AND 54
OF
THE PUBLIC UTILITY HOLDING COMPANY ACT OF 1935
FOR APPROVAL OF
DOMINION MONEY POOL
Item 1. Description of Proposed Transactions.
This Application-Declaration of Dominion Resources, Inc. ("DRI"), a
registered holding company under the Public Utility Holding Company Act of
1935 (the "Act"), seeks authority for the formation and operation of a money
pool for itself and certain of its subsidiaries ("Subsidiaries"). The
Subsidiaries consist of both DRI subsidiaries that are not subsidiaries of
Consolidated Natural Gas Company ("CNG"), a registered holding company
that is a wholly-owned subsidiary of DRI, and subsidiaries of CNG,
most of which are currently participants in the Consolidated Natural Gas
System Money Pool ("CNG Money Pool"). On January 28, 2000, CNG was acquired
by DRI through a merger ("Merger") approved by the Securities and Exchange
Commission (the "Commission") on December 15, 1999, HCAR No. 27113 (the
"Merger Order"). Management of DRI and its subsidiaries have been
integrating operations and financing activities of DRI and CNG subsequent
to the Merger.
By orders dated June 12 and July 16, 1986 (HCAR Nos. 24128 and 24150),
as amended by orders dated May 27, 1987 (HCAR No. 24399), February 14, 1990
(HCAR No. 25040), May 13, 1991 (HCAR No. 25311), April 8, 1994 (HCAR No.
26021), and July 18, 1997 (HCAR No. 26742), the Commission permitted the
application-declaration of CNG and its subsidiaries to become effective,
thereby authorizing the establishment of the CNG Money Pool. Consolidated
Natural Gas Service Company, Inc. ("CNG Services") until January 1, 2001
both administered and participated in the CNG Money Pool. The CNG Money
Pool, subsequent to the merger of CNG Services into Dominion Resources
Services, Inc. ("DRI Services") on January 1, 2001, is now administered
by DRI Services. After satisfaction of the borrowing needs of the CNG
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subsidiary companies authorized to participate in the CNG Money Pool, DRI
Services, as agent for the pool, invests excess funds and allocates the
earnings among those participant companies providing such excess funds.
DRI now seeks to form and operate through December 31, 2005 a Dominion
Resources system money pool ("DRI Money Pool") in which DRI and existing
and future subsidiaries of DRI would participate. The CNG Money Pool would
be terminated after (i) issuance by the Commission of an order authorizing
the DRI Money Pool and (ii) approval for CNG utility company participation
in the DRI Money Pool by each state utility regulatory commission having
jurisdiction over the transaction. Additional subsidiaries of DRI may
become participants in the DRI Money Pool through post-effective
amendment filings.
Participants will invest their surplus funds in the DRI Money Pool,
and the DRI Subsidiaries will borrow funds from the DRI Money Pool. DRI
Money Pool borrowings by the DRI Subsidiaries are generally exempt
transactions under Rule 52 promulgated under the Act.(1) DRI and CNG will
not borrow from the DRI Money Pool, but may be the ultimate providers of
funds to the DRI Money Pool as needed. DRI will obtain the funds to
invest in the DRI Money Pool (i) from internally generated funds, (ii) under
Commission orders dated December 15, 1999 or May 24, 2001, HCAR Nos. 27112
and 27406, respectively, and/or (iii) any other current financing
authorizations or exemptions that may be available to DRI. DRI Services
will administer the Money Pool on an "at cost" basis. CNG will obtain funds
to invest in the DRI Money Pool from internally generated funds.
The purpose of the DRI Money Pool would be similar to that of the CNG
Money Pool, that is to provide the DRI Subsidiary participants with internal
and external funds and to invest surplus funds of DRI and the Subsidiaries
in short-term money market instruments. The DRI Money Pool will offer the
DRI Subsidiaries lower short-term borrowing costs due to the elimination of
banking fees, a mechanism to earn a higher return on interest from surplus
funds that are loaned to other DRI Subsidiaries, and decreased reliance on
external funding sources.
Proceeds of any short-term borrowings from the DRI Money Pool by the
DRI Subsidiaries may be used (i) for the interim financing of construction
and capital expenditure programs, (ii) for working capital needs, (iii) for
the repayment or refinancing of debt, (iv) to meet unexpected contingencies,
payment and timing differences and cash requirements, (v) to otherwise
finance the borrower's own business, and (vi) for other lawful general
purposes.
The daily interest rate on loans from the DRI Money Pool and on all
deposits of cash in the money pool will equal the effective weighted average
rate of interest on DRI's outstanding commercial paper and/or revolving
credit borrowings. If no such DRI borrowings are outstanding on the date
of any outstanding loan, then the interest rate will be the Federal Funds'
effective rate of interest as quoted daily by the Federal Reserve Bank
of New York. The rate to be used for weekends and holidays will be the
rate on the prior business day.
_______________
(1) Transactions by The East Ohio Gas Company with the DRI Money Pool would
not be covered by Rule 52 since the Public Utilities Commission of Ohio
has no jurisdiction over financing transactions involving borrowings
which can be repaid in less than a year. Therefore, the requirement
that Rule 52 issuance of securities by utility companies be backed
by an approving order of a state utility commission cannot be met in
the case of The East Ohio Gas Company.
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Funds not required by the DRI Money Pool to make loans (with the
exception of funds required to satisfy the DRI Money Pool's liquidity needs)
would ordinarily be invested in one or more short-term investments including:
(i) obligations issued or guaranteed by the U.S. government and/or its
agencies and instrumentalities, (ii) commercial paper, (iii) certificates of
deposits, (iv) bankers' acceptances, (v) repurchase agreements, (vi) tax
exempt notes, and (vii) other investments that are permitted by Section 9(c)
of the Act and Rule 40.
The interest income and investment income earned on loans and investments
of surplus funds would be allocated among the participants in the DRI Money
Pool in accordance with the proportion each participant's contribution of
funds bears to the total amount of funds in the DRI Money Pool.
Each participant receiving a loan through the DRI Money Pool would be
required to repay the principal amount of the loan, together with all interest
accrued thereon, on demand. Interest on outstanding loans would be paid to
the DRI Money Pool monthly. All loans made through the DRI Money Pool could
be repaid by the borrower without premium or penalty.
All terms and conditions governing the operations of, and the
participation by DRI and the Subsidiaries in the DRI Money Pool will be
contained in a written agreement. A form of this agreement is filed as
Exhibit A.
DRI meets all of the conditions of Rule 53(a), except for Rule 53(a)(1),
and none of the adverse conditions specified in Rule 53(b) exist. At
September 30, 2001, DRI's aggregate investment, as defined in Rule 53(a)(1),
in EWGs and FUCOs was approximately $3.412 billion. This amount exceeds the
50% "safe harbor" limitation contained in the rule. DRI's consolidated
retained earnings as of September 30, 2001 were $1.213 billion. However, DRI
has, pursuant to Commission orders dated May 24, 2001 and December 28, 2001,
HCAR Nos. 27406 and 27485 respectively, authority to make investments in
EWGs and FUCOs up to its consolidated retained earnings plus $4.5 billion.
It is requested that Rule 24 Certificates of Notification for DRI
Money Pool transactions be filed on a calendar quarterly basis as part
of the quarterly Rule 24 filings reporting on other system financing
transactions made by DRI under File Nos. 70-9517, 70-9555 and 70-9679.
Such combined filings of financing would save the cost of separate
filings and obviate the need to look in separate places for reporting on
system-wide financial transactions of a similar nature.
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Item 2. Fees, Commissions and Expenses.
The fees, commissions and expenses to be paid or incurred, directly or
indirectly, in connection with seeking the authorizations herein requested
are estimated to be $30,000. This amount includes payments to be made to
counsel and Dominion Resources Services, Inc.
Item 3. Applicable Statutory Provisions.
Sections 12(b) and 12(f) of the Act and Rules 43, 45 and 54 under the
Act are or may be directly or indirectly applicable to the proposed
transactions for which authorization is sought in this Application-
Declaration.
In addition to the citations with respect to the CNG Money Pool given
above, system-wide money pools have been authorized for other registered
holding company systems. See The National Grid Group plc, HCAR No. 27154
(March 15, 2000); National Fuel Gas Company, HCAR No. 26847 (March 20, 1998);
and Conectiv, Inc., HCAR No. 26833 (February 26, 1998).
Item 4. Regulatory Approvals.
The Pennsylvania Public Utility Commission has jurisdiction over
transactions with the DRI Money Pool by The Peoples Natural Gas Company. The
West Virginia Public Service Commission has jurisdiction over transactions
with the DRI Money Pool by Hope Gas, Inc. No other state commission and no
other Federal commission has jurisdiction of the proposed transactions.
Item 5. Procedure.
It is respectfully requested that the Commission issue and publish as
soon as possible a notice with respect to the filing of this Application-
Declaration.
It is submitted that a recommended decision by a hearing or other
responsible officer of the Commission is not needed for approval of the
proposed transaction. The Division of Investment Management may assist in
the preparation of the Commission's decision. There should be no waiting
period between the issuance of the Commission's order and the date on which
it is to become effective.
Item 6. Exhibits and Financial Statements
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(a) Exhibits
A Form of DRI Money Pool agreement.
D-1.1 Application to Pennsylvania Public Utility Commission.
(To be filed by amendment)
D-1.2 Order of the Pennsylvania Public Utility Commission.
(To be filed by amendment)
D-2.1 Application to West Virginia Public Service Commission.
(To be filed by amendment)
D-2.2 Order of the of West Virginia Public Service Commission.
(To be filed by amendment)
F-1 Legal opinion.
(To be filed by amendment)
H Proposed form of Federal Register notice.
(b) Financial Statements
Financial statements are not submitted with respect to the
authorizations requested herein due to the nature and immaterial effect
thereof on DRI's financial statements on a consolidated basis. However,
DRI will furnish any financial information that the Commission shall
request.
Item 7. Information as to Environmental Effects.
The authorizations requested herein do not involve a "major federal
action" nor "significantly affect the quality of the human environment"
as those terms are used in Section 10(2)(C) of the National Environmental
Policy Act, 42 U.S.C. Section 4321, et seq. The only federal actions
pertain to the Commission's approval of this Application-Declaration
seeking authorization to engage in certain financing and managerial
activities under the 1935 Act. No federal agency is preparing an
environmental impact statement with respect to this matter.
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SIGNATURES
Pursuant to the Public Utility Holding Company Act of 1935, the
undersigned company has caused this Application-Declaration to be signed on
its behalf by the undersigned thereunto duly authorized.
DOMINION RESOURCES, INC.
By: James F. Stutts
__________________
Vice President and
General Counsel
DOMINION ENERGY, INC.
ELWOOD ENERGY, LLC
DOMINION RESERVES, INC.
DOMINION OHIO ES, INC.
DOMINION RESOURCES SERVICES, INC.
DOMINION ALLIANCE HOLDING, INC.
ELWOOD II HOLDINGS, LLC
ELWOOD III HOLDINGS, LLC
KINCAID GENERATION, LLC
DT SERVICES, INC.
DOMINION METERING SERVICES, INC.
DOMINION ENERGY TECHNOLOGIES, INC.
CONSOLIDATED NATURAL GAS COMPANY
CNG COAL COMPANY
CNG INTERNATIONAL CORPORATION
DOMINION IROQUOIS, INC.
CNG PIPELINE COMPANY
CNG POWER SERVICES CORPORATION
DOMINION EXPLORATION & PRODUCTION,
INC.
DOMINION PRODUCTS AND SERVICES, INC.
DOMINION RETAIL, INC.
DOMINION FIELD SERVICES, INC.
DOMINION MEMBER SERVICES, INC.
DOMINION TRANSMISSION, INC.
THE EAST OHIO GAS COMPANY
HOPE GAS, INC.
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THE PEOPLES NATURAL GAS COMPANY
CNG MAIN PASS GAS GATHERING
CORPORATION
CNG OIL GATHERING CORPORATION
DOMINION OKLAHOMA TEXAS
EXPLORATION & PRODUCTION, INC.
DOMINION GREENBRIER, INC.
DOMINION NATURAL GAS STORAGE, INC.
By: N. F. Chandler
____________
Their Attorney
Dated January 29, 2002
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Exhibit A
DOMINION RESOURCES, INC.
AND PARTICIPATING SUBSIDIARIES
AGREEMENT REGARDING THE
OPERATION OF, AND PARTICIPATION IN,
THE DOMINION SYSTEM MONEY POOL
WHEREAS, Dominion Resources, Inc. ("DRI") has provided and/or arranged
for the short-term financing needs of itself and its subsidiary companies
("DRI System" or "System") from time to time;
WHEREAS, the Securities and Exchange Commission ("Commission"), in
its order dated ___________ __, 2002, Release No. 35-_____, has
authorized DRI to arrange for, and coordinate, the short-term cash borrowing
needs and investment of excess short-term cash reserves of itself and
certain of its subsidiary companies on an intercompany pooled basis through
the DRI System Money Pool ("Money Pool");
WHEREAS, Consolidated Natural Gas Company ("CNG"), a registered holding
company subsidiary of DRI, may be a lender to, but not a borrower from, the
Money Pool, and
WHEREAS, the Money Pool will be administered by Dominion Resources
Services, Inc. ("DRI Services");
NOW, THEREFORE, DRI, each of the undersigned DRI subsidiaries, CNG
and DRI Services, have signed this Agreement to set forth the terms of the
operation of the Money Pool, and the participation therein of DRI and CNG
(as lenders to the Money Pool), the administration thereof by DRI Services,
and the participation therein of each of the undersigned DRI subsidiaries
other than CNG (as lenders to and/or borrowers from the Money Pool, each a
"Participant") and those subsidiaries that shall subsequently become
Participants therein by signing this Agreement or an amendment hereto.
ARTICLE I
GENERAL
1. Only subsidiaries of DRI, except CNG, can be Participants in the Money
Pool.
2. DRI Services hereby undertakes to operate the Money Pool on behalf of
the Participants. DRI Services undertakes to maintain a list of each
Participant in the Money Pool. Exhibit A is a list of the Participants
as of the date of this Agreement.
3. This Agreement sets forth the procedures regarding the operation of the
Money Pool and the methods for each Participant to receive loans from
the Money Pool or to deposit excess cash reserves ("Surplus Cash") in
the Money Pool for the use by other Participants.
4. This Agreement shall be subject to the provisions of the Public Utility
Holding Company Act of 1935, as it may be amended from time to time
(the "Act"), any Rules promulgated under the Act, and any Orders issued
from time to time by the Commission under the Act.
5. Upon payment of all outstanding loans from or deposits of Surplus Cash
to the Money Pool, accrued interest, and its allocable share of fees to
DRI Services, any Participant may terminate its participation in the
Money Pool pursuant to this Agreement at any time.
ARTICLE II
BORROWINGS, DEPOSITS
1. Subject to any individual maximum borrowing limit that may be imposed by
DRI, in its sole discretion, from time-to-time, and further subject to
any limits that may be imposed on a consolidated System basis and have
an effect on an individual Participant's borrowing limit, each Participant
shall be entitled, on request, to borrow from the Money Pool various
amounts in $1,000 increments ("Loans"), and for such period as determined
by the Participant.
2. Loans from the Money Pool shall be made in the form of open account
advances. Open account advances are repayable not more than one year
from the date of the first advance.
3. Loans are payable on demand, may be prepaid without premium or penalty,
and bear interest, payable monthly.
2
4. All Loans by a Participant from the Money Pool shall be evidenced by
book entries.
5. If any Participant has Surplus Cash in excess of its immediate needs, it
may deposit such Surplus Cash in the Money Pool. DRI Services, as agent
for the Participants, shall pool such Surplus Cash with all other funds
available when determining the amount that must be borrowed from DRI or
CNG from day to day.
6. Any Participant may withdraw funds contributed to the Money Pool at any
time.
7. All deposits of cash in the Money Pool by DRI, CNG or deposits of Surplus
Cash by a Participant shall be evidenced by book entries.
8. Each Participant agrees to keep DRI Services advised of its borrowing
needs and/or Surplus Cash position. DRI Services shall utilize such
information to determine the net borrowing needs or Surplus Cash position
of the consolidated DRI System and coordinate borrowings from DRI or CNG
to meet the net borrowing needs or arrange for the investment of Surplus
Cash on behalf of the Participants.
ARTICLE III
DETERMINATION OF BORROWING RATES
1. DRI Services will calculate, on a daily basis, the interest rate ("Daily
Rate") applicable to all Loans by Participants from the Money Pool.
2. The Daily Rate on Loans from the Money Pool shall equal the effective
weighted average rate of interest on DRI's outstanding commercial paper
and/or revolving credit borrowings. If no such DRI borrowings are
outstanding on the date of any outstanding Loan, then the interest rate
shall be the Federal Funds' effective rate of interest as quoted daily
by the Federal Reserve Bank of New York. The rate to be used for
weekends and holidays will be the rate on the prior business day.
3. The Daily Rate shall be applied to the aggregate principal amount of
any Loan of a Participant that remains outstanding at the end of any day.
3
ARTICLE IV
DETERMINATION OF DEPOSIT RATES
1. Subject to paragraph 3 below, all deposits of cash in the Money Pool by
DRI and CNG or deposits of Surplus Cash deposited in the Money Pool by
a Participant, shall earn interest at the Daily Rate as calculated by DRI
Services pursuant to Article III.
2. The Daily Rate shall be applied to the aggregate principal amount of any
deposit of Surplus Cash that remains in the Money Pool at the end of any
day.
3. If, at any time, there is more Surplus Cash deposited by Participants in
the Money Pool than is needed by other Participants (such increment of
Surplus Cash to be referred to as "Excess Surplus Cash"), DRI Services,
as Agent for the Participants that deposited such Excess Surplus Cash,
shall invest such Excess Surplus Cash in instruments which are authorized
temporary cash investments under the Investment Policy of DRI as set forth
in Exhibit B hereto. All interest accrued on such investments shall be
allocable to the Participants that deposited such Excess Surplus Cash in
the Money Pool.
ARTICLE V
RECORD OF CURRENT ACCOUNTS
1. DRI Services shall maintain a current daily accounting of all Loans from,
or deposits of Surplus Cash in, the Money Pool by each Participant. Such
accounting shall be maintained in electronic format and shall indicate
the Daily Rate in effect from time to time.
2. Upon request, DRI Services shall provide any Participant copies of such
current accounting.
ARTICLE VI
INTEREST PAYMENTS
1. All accrued and unpaid interest on all Loans from the Money Pool shall be
payable monthly by each Participant until the principal amount of the
Loan has been fully repaid.
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2. Accrued interest on all deposits in the Money Pool by DRI, CNG or a
Participant shall be disbursed to the appropriate party on a monthly
basis. DRI Services shall be entitled to apply any such interest payable
against any outstanding interest receivable that may be due for Loans
that may have been outstanding by a Participant at other times
during that month.
ARTICLE VII
AVAILABILITY OF FUNDS TO PARTICIPANTS
1. Based on the individual funding requirements communicated by each
Participant to DRI Services from time to time, DRI Services shall
endeavor to arrange borrowings from DRI so that the funding requirements
of each Participant may be fully satisfied.
2. DRI and CNG may not borrow any funds from the Money Pool. DRI and CNG,
however, shall have the right to withdraw funds it has deposited in the
Money Pool to the extent such funds are no longer needed to cover the
borrowing needs of subsidiary Participants.
ARTICLE VIII
REPAYMENT OF LOANS
1. All Loans are payable upon demand by DRI Services.
2. Each Participant shall have the right at any time to fully repay to the
Money Pool any outstanding Loan.
ARTICLE IX
TERM, GOVERNING LAW
1. Subject to any Participant's individual right to terminate participation
under this Agreement as set out in Article I, 5, this Agreement shall
remain in effect until such date as may be approved by DRI, DRI Services
and each Participant.
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2. Notwithstanding the termination of participation in the Money Pool by
any Participant, this Agreement shall remain in effect with respect to
all other Participants.
3. This Agreement may be amended or superseded at any time, by a written
instrument signed by DRI, CNG, DRI Services and each Participant.
4. This Agreement shall be governed by, and construed in accordance with,
the laws of the Commonwealth of Virginia.
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IN WITNESS WHEREOF, the parties have hereunto executed this Agreement
as of _____ , 2002.
DOMINION RESOURCES, INC.
By:______________________
Its:_____________________
CONSOLIDATED NATURAL GAS COMPANY
By:______________________
Its:_____________________
DOMINION RESOURCES SERVICES, INC.
By:______________________
Its:_____________________
(PARTICIPANTS)
_________________________
By:______________________
Its:_____________________
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EXHIBIT A
to Money Pool
Agreement
DOMINION SYSTEM
MONEY POOL
Participants as of _______ , 2002:
8
EXHIBIT B
to Money Pool
Agreement
AUTHORIZED TEMPORARY CASH INVESTMENTS UNDER SECTION III OF THE
INVESTMENT POLICY OF DOMINION RESOURCES, INC.
The following list represents the types of securities and the qualifications
specific to each that are authorized to be purchased for the Company's account.
(A) U.S. Government Securities
(1) Securities issued by the U. S. Treasury may be purchased. This
includes Bills, Notes and Bonds.
(2) Maximum maturity shall be one year.
(B) U. S. Government Agencies
(1) Securities of the following government agencies may be purchased:
Federal National Mortgage Association
Government National Mortgage Association
Federal Home Loan Banks
Federal Land Banks
Federal Home Loan Mortgage Corporation
Federal Intermediate Credit Banks
(2) Maximum maturity shall be one year.
(C) Certificates of Deposit
(1) May purchase CDs issued by any bank headquartered in the
United States meeting the following qualifications:
(a) Total assets must rank in the top 50 domestic bank
universe.
(b) The bank must have a short-term debt rating no less
than 'A-1', 'P-1' by Standard & Poor's and Moody's,
respectively.
(2) Maximum maturity shall be one year.
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(D) Banker's Acceptances
(1) May purchase BAs issued by any bank headquartered in the
United States meeting the following qualifications:
(a) Total assets must rank in the top 50 domestic bank
universe.
(b) The bank must have a short-term debt rating no less
than 'A-1', 'P-1' by Standard & Poor's and Moody's,
respectively.
(2) May purchase BAs issued by a non-U.S. bank meeting the
following qualifications:
(a) Total assets must rank in the top 25 worldwide bank
universe.
(b) The Thomson BankWatch, Inc. quality rating must be
'A/B' or better.
(3) Maximum maturity shall be one year.
(E) Eurodollar Certificates of Deposit and Eurodollar Time Deposits
(1) May purchase Eurodollar CDs and Eurodollar Time Deposits
issued by the London, Nassau or Cayman branches of any
bank headquartered in the United States meeting the
following qualifications:
(a) Total assets must rank in the top 50 domestic
bank universe.
(b) The bank must have a short-term debt rating no less
than 'A-1', 'P-1' by Standard & Poor's and Moody's,
respectively.
(2) May purchase Eurodollar CDs and Eurodollar Time Deposits
issued by any non-U.S. bank meeting the following
qualifications:
(a) Total assets must rank in the top 25 worldwide bank
universe.
(b) The bank must have a short-term debt rating no less
than 'A-1', 'P-1' by Standard & Poor's and Moody's,
respectively.
(3) Maximum maturity shall be one year.
(F) Commercial Paper
(1) May purchase CP from any issuer which has a short-term
debt rating no less than 'A-1', 'P-1' by Standard & Poor's
and Moody's, respectively.
(2) Maximum maturity shall be 270 days.
(G) Repurchase Agreements
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(1) May purchase Repos from any domestic bank that has met
the criteria in C, above.
(2) May purchase Repos from any of the following securities
firms:
J. P. Morgan, Securities, Inc. Merrill Lynch
Morgan Stanley & Co. Bank of America Securities
Credit Suisse-First Boston Wachovia Capital Markets, Inc.
First Union Capital Markets, Inc. Salomon-Smith Barney.
Goldman Sachs & Co. SunTrust Capital Markets, Inc.
(3) Collateral to be accepted in a repurchase agreement must
meet the following criteria:
(a) Consist of securities that meet or exceed quality guidelines
to qualify for actual purchase. (Exception: No maximum
maturity will apply to underlying collateral.)
(b) Market value of the underlying collateral must equal
or exceed the principal amount of the repurchase
agreement.
(4) Maximum maturity shall be two weeks or 10 business days.
(H) Tax-Exempt Commercial Paper
(1) May purchase tax-exempt CP from any issuer which has a
short-term debt rating no less than 'A-1', 'P-1' by
Standard & Poor's and Moody's, respectively.
(2) Maximum maturity shall be 270 days.
(I) Corporate Bonds
(1) May purchase bonds issued by any corporation whose long-
term debt ratings are no less than 'A' or 'A2' by Standard
& Poor's or Moody's, respectively.
(2) Investments shall be limited to securities which have
one year or less remaining to maturity, or which can be
tendered back to the issuer at par value one year or less
from the date of purchase.
(J) Preferred Stock
(1) May purchase preferred stock from any issuer whose
preferred stock ratings are no less than 'A' or 'a2' by
Standard & Poor's or Moody's, respectively.
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(2) Investments shall be limited to securities which have
one year or less remaining to maturity, or which can be
tendered back to the issuer at par value one year or less
from the date of purchase.
(K) Money Market Funds
(1) May purchase money market funds whose portfolio composition
consists of securities which meet or exceed quality guidelines
to qualify for actual purchase.
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Exhibit H
UNITED STATES OF AMERICA
before the
SECURITIES AND EXCHANGE COMMISSION
PUBLIC UTILITY HOLDING COMPANY ACT OF 1935
Release No. / , 2002
_________________________________________
:
In the Matter of :
:
DOMINION RESOURCES, INC., ET AL. :
120 Tredegar Street :
Richmond, Virginia 23219 :
:
(70- ) :
_________________________________________:
NOTICE OF PROPOSED MONEY POOL
Dominion Resources, Inc. ("DRI"), a registered holding company;
Consolidated Natural Gas Company ("CNG"), a registered holding company
subsidiary of DRI, each at 120 Tredegar Street, Richmond, VA 23219, and
the following subsidiaries of DRI (the "DRI Subsidiaries") Dominion Energy,
Inc., Elwood Energy LLC, Dominion Reserves, Inc., Dominion Ohio ES, Inc.,
Dominion Resources Services, Inc. and Dominion Alliance Holding, Inc.,
each at 120 Tredegar Street, Richmond, VA 23219; Elwood II Holdings, LLC
and Elwood III Holdings, LLC, each at 21100 Noel Road, Elwood, IL 60421;
Kincaid Generation, LLC, Box 260, Kincaid, IL 62540; DT Services, Inc.,
and Dominion Metering Services, Inc., each at 701 East Cary Street,
Richmond, VA 23219; CNG International Corporation, Dominion Greenbrier,
Inc., Dominion Natural Gas Storage, Inc., each at 120 Tredegar Street,
Richmond, Virginia 23219; CNG Power Services Corporation, Dominion
Products and Services, Inc., Dominion Retail, Inc., Dominion Member
Services, Inc., The Peoples Natural Gas Company, Dominion Tower, each
at 625 Liberty Avenue, Pittsburgh, PA 15222; Dominion Exploration &
Production, Inc., CNG Coal Company, CNG Pipeline Company, CNG Main Pass
Gas Gathering Corporation, CNG Oil Gathering Corporation, Dominion
Oklahoma Texas Exploration & Production, Inc., each at Four Greenspoint
Plaza, 16945 Northchase Drive, Houston, TX 77060; Dominion Transmission,
Inc., Dominion Iroquois, Inc., Dominion Field Services, Inc., each at
445 West Main Street, Clarksburg, WV 26301; Hope Gas, Inc., 347 West Main
Street, Clarksburg, WV 26301; and The East Ohio Gas Company, 1717 E. Ninth
Street, Cleveland, OH 44114; have filed with the Commission an Application-
Declaration pursuant to the Public Utility Holding Company Act of
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1935 (the "1935 Act"), designating Sections 12(b) and 12(f), and Rules 43,
45 and 54 promulgated thereunder as applicable to the proposed transactions.
The applicants seek authority to form and operate through December 31,
2005 a DRI money pool ("DRI Money Pool") in which DRI, CNG and the DRI
Subsidiaries would participate. A CNG Money Pool currently authorized by the
Commission would be terminated.
Participants will invest their surplus funds in the DRI Money Pool,
and the DRI Subsidiaries will borrow funds from the DRI Money Pool. Nether
DRI nor CNG will borrow from the DRI Money Pool, but will be the ultimate
provider of funds to the DRI Money Pool as needed. Dominion Resources
Services, Inc. will administer the Money Pool on an "at cost" basis.
The purpose of the DRI Money Pool would be similar to that of the CNG
Money Pool, that is to provide the DRI Subsidiaries with internal and
external funds and to invest surplus funds of DRI and the DRI Subsidiaries
in short-term money market instruments. The DRI Money Pool will offer the
DRI Subsidiaries lower short-term borrowing costs due to the elimination of
banking fees, a mechanism to earn a higher return on interest from surplus
funds that are loaned to other DRI Subsidiaries, and decreased reliance on
external funding sources.
Funds not required by the DRI Money Pool to make loans (with the
exception of funds required to satisfy the DRI Money Pool's liquidity needs)
would ordinarily be invested in one or more short-term investments including:
(i) obligations issued or guaranteed by the U.S. government and/or its
agencies and instrumentalities, (ii) commercial paper, (iii) certificates of
deposits, (iv) bankers' acceptances, (v) repurchase agreements, (vi) tax
exempt notes, and (vii) other investments that are permitted by Section 9(c)
of the Act and Rule 40.
The daily interest rate on loans from the DRI Money Pool and on all
deposits of cash in the money pool will equal the effective weighted average
rate of interest on DRI's outstanding commercial paper and/or revolving credit
borrowings. If no such DRI borrowings are outstanding on the date of any
outstanding loan , then the interest rate will be the Federal Funds's
effective rate of interest as quoted daily by the Federal Reserve Bank of
New York. The rate to be used for weekends and holidays will the the rate
on the prior business day.
The interest income and investment income earned on loans and
investments of surplus funds would be allocated among the participants in
the DRI Money Pool in accordance with the proportion each participant's
contribution of funds bears to the total amount of funds in the DRI Money
Pool.
Each participant receiving a loan through the DRI Money Pool would be
required to repay the principal amount of the loan, together with all
interest accrued thereon, on demand. Interest on outstanding loans would be
paid to the DRI Money Pool monthly. All loans made through the DRI Money
Pool could be repaid by the borrower without premium or penalty.
All terms and conditions governing the operations of, and the
participation by DRI, CNG and the DRI Subsidiaries in, the DRI
Money Pool will be contained in a written agreement.
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The Application or Declaration and any amendments thereto are available
for public inspection through the Commission's Office of Public Reference.
Interested persons wishing to comment or request a hearing should submit
their views in writing by February , 2002 to the Secretary, Securities
and Exchange Commission, Washington, D.C. 20549, and serve a copy on
DRI at the address specified above. Proof of service (by affidavit or, in
case of any attorney at law, by certificate) should be filed with the request.
Any request for a hearing shall 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
this matter. After said date, the Application-Declaration, as filed or as it
may be amended, may be permitted to become effective.
For the Commission, by the Office of Public Utility
Regulation, pursuant to delegated authority.
Jonathan G. Katz
Secretary
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