UNITED STATES OF AMERICA
Before the
SECURITIES AND EXCHANGE COMMISSION
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In the Matter of
NATIONAL FUEL GAS COMPANY FOURTEENTH
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)
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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.
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, 2001 (“Quarter”) as summarized below:
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At Beginning At End Maximum Level Minimum Level
of Quarter of Quarter of Such Short-term Debt Of Such Short-term Debt
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$9,800,000 $25,700,000 $25,700,000 $9,800,000
During the Quarter, National did not sell any long-term debt securities (i.e. debt with maturities in excess of 270 days). National has no preferred stock outstanding.
(2) Stock Issuance PlansDuring the Quarter, National issued the following shares of common stock through the following plans (“Stock Issuance Plans”):
Number of Number of Shares Exchanged as
Name Of Plan Shares Issued Consideration For Share Issuances
------------ ------------- ---------------------------------
Direct Stock Purchase and Dividend 28,428 N/A
Reinvestment Plan
Tax Deferred Savings 29,185 N/A
Plans [401(k)]
Retainer Policy for 840 N/A
Outside Directors
1997 Award & Option Plan 1,200 -0-
1993 Award & Option Plan 14,000 -0-
1984 Stock Plan -0- -0-
1983 Incentive Stock Option Plan 1,700 -0-
Total Number of 75,353 -0-
Shares Issued/Exchanged
Net New Shares 75,353
Aggregate gross consideration received upon issuance of 75,353 shares: $3,679,147.78.
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 14, 2001 the Compensation Committee of the Board of Directors of National awarded 162,600 stock options pursuant to the National Fuel Gas Company 1997 Award and Option Plan.
(3) Compliance With Parameters Concerning Long-Term SecuritiesDuring 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.
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.
During the Quarter, National did not issue other types of securities (“Other Securities”).
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
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Maximum Amount Minimum Amount
At Beginning At End Outstanding During Outstanding During
of Quarter of Quarter Quarter Quarter
---------- ---------- ------- -------
$200,000,000 $196,000,000 $200,000,000 $148,800,000
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)
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Maximum Amount Minimum Amount
At Beginning At End Outstanding During Outstanding During
of Quarter of Quarter Quarter Quarter
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$172,500,000 $209,700,000 $209,700,000 $60,300,000
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 $405,700,000, 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 $500,300,000.
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
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At Beginning At End
of Quarter Of Quarter Maximum Minimum
---------- ---------- ------- -------
National $62,900,000 $28,500,000 $65,600,000 $28,500,000
Distribution 0 0 $36,000,000 0
Supply 0 0 0 0
Seneca 28,800,000 30,100,000 31,700,000 28,600,000
Highland 0 0 0 0
Leidy 800,000 800,000 800,000 800,000
Data-Track 700,000 700,000 700,000 700,000
NFR 0 0 0 0
Horizon Energy 300,000 1,300,000 1,500,000 0
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
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At Beginning At End Maximum Minimum
of Quarter of Quarter Borrowed Borrowed
---------- ---------- -------- --------
Distribution $ 90,800,000 $ 35,000,000 $ 90,800,000 0
Supply 45,000,000 39,900,000 53,300,000 31,200,000
Seneca 209,600,000 310,300,000 332,700,000 193,900,000
UCI 0 0 0 0
Highland 58,200,000 57,900,000 59,100,000 57,200,000
Leidy 0 0 0 0
Data-Track 0 0 0 0
NFR 43,800,000 11,000,000 43,800,000 11,000,000
Horizon Energy 0 0 0 0
SIP 12,300,000 13,000,000 13,000,000 12,300,000
NIM 0 0 0 0
Upstate 6,300,000 0 6,800,000 0
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.
During the Quarter, Distribution did not engage in external financing.
During the Quarter, National and its nonutility Subsidiaries did not organize new corporations, trusts, partnerships or other entities created for the purpose of facilitating financing.
During the Quarter, National made guarantees on behalf of its Subsidiaries in the aggregate amount of $12,000,000. The maximum amount of guarantees or credit support that National had outstanding to its Subsidiaries at any time during the quarter was $554,160,000.
All guarantees relate to gas transportation, purchases or sales, or other credit support agreements relating to the Subsidiaries’ existing businesses.
During the Quarter, Power acquired a partial ownership interest in Energy Systems North East, LLC (ESNE) a designated exempt wholesale generator (EWG). Aside from that acquisition, 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.
SIGNATURESPursuant to the requirements of the Public Utility Holding Company Act of 1935, the undersigned companies have duly caused this Thirteenth 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
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P. C. Ackerman
President
NATIONAL FUEL GAS DISTRIBUTION
CORPORATION
By: /s/ D. F. Smith
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D. F. Smith
President
SENECA RESOURCES CORPORATION
By: /s/ J. A. Beck
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J. A. Beck
President
NATIONAL FUEL GAS SUPPLY CORPORATION
By: /s/ D. J. Seeley
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D. J. Seeley
President
NATIONAL FUEL RESOURCES, INC.
By: /s/ W. M. Petmecky
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W. M. Petmecky
Secretary/Treasurer
HORIZON ENERGY DEVELOPMENT, INC.
By: /s/ P. C. Ackerman
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P. C. Ackerman
President
HIGHLAND FOREST RESOURCES, INC.
By: /s/ J. A. Beck
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J. A. Beck
President
DATA-TRACK ACCOUNT SERVICES, INC.
By: /s/ P. C. Ackerman
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P. C. Ackerman
President
LEIDY HUB, INC.
By: /s/ W. E. DeForest
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W. E. DeForest
President
SENECA INDEPENDENCE PIPELINE COMPANY
By: /s/ W. E. DeForest
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W. E. DeForest
President, Secretary & Treasurer
NIAGARA INDEPENDENCE MARKETING COMPANY
By: /s/ T. L. Atkins
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T. L. Atkins
Treasurer
UPSTATE ENERGY INC.
By: /s/ T. L. Atkins
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T. L. Atkins
Treasurer
HORIZON POWER, INC.
By: /s/ B. H. Hale
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B. H. Hale
President
HORIZON ENERGY DEVELOPMENT B.V.
By: /s/ B. H. Hale
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B. H. Hale
Managing Director
Dated: August 28, 2001