-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, UXC/jlBs9b/rjMA4DnympmGc+FQq8f7TVS+pyAEStPdm0XjfYL36GVXhzx2GSPUN t5obYdKDeapMRd4FHs9uRw== 0000070145-02-000075.txt : 20020829 0000070145-02-000075.hdr.sgml : 20020829 20020829140801 ACCESSION NUMBER: 0000070145-02-000075 CONFORMED SUBMISSION TYPE: 35-CERT PUBLIC DOCUMENT COUNT: 1 FILED AS OF DATE: 20020829 FILER: COMPANY DATA: COMPANY CONFORMED NAME: NATIONAL FUEL GAS CO CENTRAL INDEX KEY: 0000070145 STANDARD INDUSTRIAL CLASSIFICATION: NATURAL GAS DISTRIBUTION [4924] IRS NUMBER: 131086010 STATE OF INCORPORATION: NJ FISCAL YEAR END: 0930 FILING VALUES: FORM TYPE: 35-CERT SEC ACT: 1935 Act SEC FILE NUMBER: 070-09153 FILM NUMBER: 02752455 BUSINESS ADDRESS: STREET 1: 10 LAFAYETTE SQ CITY: BUFFALO STATE: NY ZIP: 14203 BUSINESS PHONE: 7168576980 MAIL ADDRESS: STREET 1: 10 LAFAYETTE SQ STREET 2: 10 LAFAYETTE SQ CITY: BUFFALO STATE: NY ZIP: 14203 35-CERT 1 rule24cert_3q02.htm 3Q02 eighteenth-9153

      UNITED STATES OF AMERICA
                Before the
     SECURITIES AND EXCHANGE COMMISSION   

     In the Matter of

NATIONAL FUEL GAS COMPANY EIGHTEENTH
NATIONAL FUEL GAS DISTRIBUTION CORPORATION CERTIFICATE
NATIONAL FUEL GAS SUPPLY CORPORATION PURSUANT TO
SENECA RESOURCES CORPORATION RULE 24
HIGHLAND FOREST RESOURCES, INC.
(F/K/A HIGHLAND LAND & MINERALS, INC.)
LEIDY HUB, INC.
DATA-TRACK ACCOUNT SERVICES, INC.
NATIONAL FUEL RESOURCES, INC.
HORIZON ENERGY DEVELOPMENT, INC.
SENECA INDEPENDENCE PIPELINE COMPANY
NIAGARA INDEPENDENCE MARKETING COMPANY
UPSTATE ENERGY INC. (F/K/A NIAGARA ENERGY TRADING INC.)
HORIZON POWER, INC. (F/K/A NFR POWER, INC.)
HORIZON ENERGY DEVELOPMENT B.V.

File No. 70-9153
(Public Utility Holding Company Act of 1935)

     THIS IS TO CERTIFY, pursuant to Rule 24, that certain transactions proposed by National Fuel Gas Company ("National"), and its subsidiaries: National Fuel Gas Distribution Corporation ("Distribution Corporation"), National Fuel Gas Supply Corporation ("Supply Corporation"), Seneca Resources Corporation ("Seneca"), Highland Forest Resources, Inc., formerly known as Highland Land & Minerals, Inc., ("Highland") on its own behalf and as successor by merger to Utility Constructors, Inc. ("UCI"), Leidy Hub, Inc. ("Leidy"), Data-Track Account Services, Inc. ("Data-Track"), National Fuel Resources, Inc. ("NFR"), Horizon Energy Development, Inc. ("Horizon Energy"), Seneca Independence Pipeline Company ("SIP"), Niagara Independence Marketing Company ("NIM"), Upstate Energy Inc., formerly known as Niagara Energy Trading Inc., ("Upstate"), Horizon Power, Inc. formerly known as NFR Power, Inc. ("Power") and Horizon Energy Development B.V. ("Horizon B.V.") (collectively, the "Subsidiaries"), in their Application-Declaration on Form U-1, as amended, ("Application-Declaration") in SEC File No. 70-9153, have been carried out in accordance with the terms and conditions, and for the purposes as represented by said Application-Declaration, and the Order of the Securities and Exchange Commission ("Commission") (HCAR No. 35-26847 dated March 20, 1998) with respect thereto, as amended.

1. EXTERNAL FINANCING BY NFG

BORROWING BY NATIONAL

a. Short-term Debt

      National borrowed funds by issuing commercial paper and/or short-term notes (in all cases having maturities of no more than 270 days) to banks or other financial institutions during the quarter ended June 30, 2002 ("Quarter") as summarized below:

At Beginning of Quarter At End of Quarter Maximum Level of Such Short-term Debt Minimum Level Of Such Short-term Debt
$30,300,000 $32,700,000 $32,900,000 $29,600,000

b. Long-term securities

(1) Long-Term Debt Securities; Preferred Stock

     There were no transactions regarding the principal amount of any outstanding long-term debt securities during the Quarter. National has no preferred stock outstanding.

(2) Stock Issuance Plans

     During the Quarter, National issued the following shares of common stock through the following plans ("Stock Issuance Plans"):

Name Of Plan Number of Shares Issued Number of Shares Exchanged as Consideration For Share Issuances
Direct Stock Purchase and Dividend Reinvestment Plan 69,743 N/A
Tax Deferred Savings Plans [401(k)] 73,038 N/A
Retainer Policy for Outside Directors 1,920 N/A
1997 Award & Option Plan 49,580 -0-
1993 Award & Option Plan 41,222 -0-
1984 Stock Plan -0- -0-
1983 Incentive Stock Option Plan 1,500 -0-
Total Number of Shares Issued/Exchanged 231,003 -0-
   
Net New Shares 231,003 

Aggregate gross consideration received upon issuance of 231,003 shares: $5,148,341.29.

     Effective November 1, 1999, National combined its former Customer Stock Purchase, and Dividend Reinvestment and Stock Purchase Plans into a new plan known as the National Fuel Direct Stock Purchase and Dividend Reinvestment Plan. The purpose of is to promote the long-term ownership of National’s common stock by allowing for the purchase thereof directly from National, through cash purchases and through reinvestment of cash dividends.

     The purpose of National’s two Tax-Deferred Savings Plans is to encourage certain employees of National and of its Subsidiaries to provide for their retirement needs by providing opportunities for long-term capital accumulation, to promote ownership of National’s common stock among certain employees, to provide an attractive employee benefit, and to keep National's employee benefit program competitive with programs offered by other corporations.

     The purpose of National’s Retainer Policy for outside directors is to pay outside directors a portion of their annual retainer in common stock of National. This promotes the long-term ownership of National's common stock by outside directors.

     National adopted its four award and option plans in order to attract, retain and motivate key employees of outstanding ability. These plans were intended to provide an incentive to key employees to maximize the long-range profits, revenues, and financial integrity of National by increasing the personal stake of those employees in the continued success and growth of National, and by providing significant incentives to their continuation of employment at National and its Subsidiaries.

     On June 13, 2002, the Compensation Committee of the Board of Directors of National awarded 229,800 stock options pursuant to the National Fuel Gas Company 1997 Award and Option Plan and 1,200 stock options pursuant to the National Fuel Gas Company 1993 Award and Option Plan.

(3) Compliance With Parameters Concerning Long-Term Securities

      During the Quarter, all long-term debt of National had bond ratings of "investment grade", and National's common equity (as reflected in its Form 10-K) did not fall below 30% of National’s consolidated capitalization.

c. Hedging Transactions

     During the Quarter, National did not enter into any hedges or other derivative transactions as contemplated by the Application-Declaration either pursuant to a Hedge Program or an Anticipatory Hedge Program.

d. Other Securities

     During the Quarter, National did not issue other types of securities ("Other Securities").

2. MONEY POOL

     During the Quarter, National coordinated the borrowing requirements of Subsidiaries through the system money pool ("Money Pool"). Money Pool activities included:

     a.      National sold commercial paper during the Quarter, through Merrill Lynch Money Markets, Inc., J.P. Morgan Securities Inc. and/or Goldman, Sachs & Co. The proceeds thereof which were not needed for National's own corporate purposes were loaned by National to certain Subsidiaries that borrowed either directly or through the Money Pool during the Quarter.

Commercial Paper Outstanding

At Beginning of Quarter At End of Quarter Maximum Amount Outstanding During Quarter Minimum Amount Outstanding During Quarter
$188,600,000 $188,600,000 $200,000,000 $73,500,000

      b.      National issued short-term notes to banks or other financial institutions during the Quarter. The proceeds thereof which were not needed for National’s own corporate purposes were loaned by National to certain Subsidiaries that borrowed either directly or through the Money Pool during the Quarter.

National’s External Bank/Financial Institution Borrowings Outstanding (Money Pool)

At Beginning of Quarter At End of Quarter Maximum Amount Outstanding During Quarter Minimum Amount Outstanding During Quarter
$58,900,000 $58,900,000 $124,100,000 $58,900,000

     c.      The maximum aggregate amount of external short-term debt borrowed by National (for its own use and for the Money Pool) at any time during the Quarter was $285,800,000, and the maximum aggregate amount that National and its Subsidiaries lent to other Subsidiaries participating in the Money Pool at any time during the Quarter was $351,400,000.

      d.      The following table lists cash balances that National and certain Subsidiaries (i.e., Subsidiaries with surplus funds) loaned to other Subsidiaries that borrowed through the Money Pool during the Quarter:

Cash Balances Loaned Through the Money Pool

 At Beginning of Quarter At End of Quarter Maximum Minimum
National $37,400,000 $40,000,000 $40,200,000 $36,700,000
Distribution 0 0 9,800,0000 0
Supply 0 0 0 0
Seneca 27,100,000 30,900,000 30,900,000 27,100,000
Highland 0 0 0 0
Leidy 800,000 800,000 800,000 800,000
Data-Track 600,000 600,000 600,000 600,000
NFR 13,200,000 32,000,000 39,500,000 16,200,000
Horizon Energy 1,300,000 400,000 3,400,000 200,000
SIP 0 0 0 0
NIM 0 0 0 0
Upstate 0 0 0 0
Power 0 0 0 0

     e.      The following table lists cash balances that certain Subsidiaries borrowed through the Money Pool during the Quarter. National does not borrow from its Subsidiaries through the Money Pool or otherwise. In addition, neither Horizon Energy nor Power borrow from the Money Pool.

Borrowings from the Money Pool

 At Beginning of Quarter At End of Quarter Maximum Borrowed Minimum Borrowed
Distribution $63,200,000 $26,900,000 $57,500,000 0
Supply 37,700,000 24,300,000 46,400,000 24,300,000
Seneca 178,500,000 182,200,000 200,900,000 178,400,000
Highland 33,000,000 50,900,000 50,900,000 31,200,000
Leidy 0 0 0 0
Data-Track 0 0 0 0
NFR 0 0 0 0
SIP 13,800,000 14,100,000 14,100,000 13,800,000
NIM 0 0 0 0
Upstate 1,700,000 300,000 1,700,000 300,000

3. USE OF PROCEEDS

     National has used the proceeds of the aforementioned issuances of short-term debt, and the borrowing Subsidiaries have used the proceeds of their Money Pool borrowings, for acquisitions, capital expenditures, working capital needs, for the retirement or redemption of securities, or for other general corporate purposes.

4. EXTERNAL FINANCING BY DISTRIBUTION

      During the Quarter, Distribution did not engage in external financing.

5. FINANCING ENTITIES

     During the quarter ended December 31, 2001, National and Seneca, one of National's nonutility Subsidiaries, began the process of organizing new corporations and partnerships for the purpose of facilitating the financing of certain of Seneca’s oil and gas operations. Once the final structure of these financing entities is determined, National and Seneca will report all relevant details of such financing entities.

6. GUARANTEES BY NATIONAL

     During the Quarter, National amended one guarantee by increasing the maximum aggregate amount from $3,000,000 to $5,000,000. The maximum amount of guarantees or credit support that National had outstanding to its Subsidiaries at any time during the quarter was $679,060,000.

     All guarantees relate to gas transportation, purchases or sales, or other credit support agreements relating to the Subsidiaries' existing businesses.

7. ACQUISITIONS OF EWGS, FUCOS AND RULE 58 COMPANIES

     During the Quarter, neither National nor any of its Subsidiaries made any investments in entities that had been designated as exempt wholesale generators (EWGs) (except for Power’s ongoing development activities in accordance with its EWG status) or foreign utility companies (FUCOs), and neither National or any of its Subsidiaries made any investments in energy-related companies and gas-related companies under Rule 58 other than loans reported herein or on National’s Form U-6B-2 or Form U-9C-3 for the Quarter.

     The aggregate investment of National and its Subsidiaries in EWGs and FUCOs does not exceed the limits set forth in the Commission's Rule 53.

SIGNATURES

     Pursuant to the requirements of the Public Utility Holding Company Act of 1935, the undersigned companies have duly caused this Eighteenth Certificate Pursuant to Rule 24 to be signed on their behalf by the undersigned thereunto duly authorized.

 NATIONAL FUEL GAS COMPANY
 
 By:   /s/ P. C. Ackerman
         P. C. Ackerman
          Chairman, President & CEO

 NATIONAL FUEL GAS DISTRIBUTION CORPORATION
 
 By:   /s/ D. F. Smith
         D. F. Smith
          President

 SENECA RESOURCES CORPORATION
 
 By:   /s/ J. A. Beck
         J. A. Beck
          President

 NATIONAL FUEL GAS SUPPLY CORPORATION
 
 By:   /s/ D. J. Seeley
         D. J. Seeley
          President

 NATIONAL FUEL RESOURCES, INC.
 
 By:   /s/ G. T. Wehrlin
         G. T. Wehrlin
          President

 HORIZON ENERGY DEVELOPMENT, INC.
 
 By:   /s/ P. C. Ackerman
         P. C. Ackerman
          President

 HIGHLAND FOREST RESOURCES, INC.
 
 By:   /s/ J. A. Beck
        J. A. Beck
          President

 DATA-TRACK ACCOUNT SERVICES, INC.
 
 By:   /s/ D. F. Smith
         D. F. Smith
          President

 LEIDY HUB, INC.
 
 By:   /s/ W. E. DeForest
        W. E. DeForest
          President

 SENECA INDEPENDENCE PIPELINE COMPANY
 
 By:   /s/ W. E. DeForest
         W. E. DeForest
          President, Secretary & Treasurer

 NIAGARA INDEPENDENCE PIPELINE COMPANY
 
 By:   /s/ T. L. Atkins
         T. L. Atkins
          Treasurer

 UPSTATE ENERGY INC.
 
 By:   /s/ T. L. Atkins
         T. L. Atkins
          Treasurer

 HORIZON POWER, INC.
 
 By:   /s/ B. H. Hale
         B. H. Hale
          President

 HORIZON ENERGY DEVELOPMENT B.V.
 
 By:   /s/ B. H. Hale
         B. H. Hale
          Managing Director

Dated: August 29, 2002

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