UNITED STATES OF AMERICA
Before the
SECURITIES AND EXCHANGE COMMISSION
In the Matter of
| NATIONAL FUEL GAS COMPANY | FIRST |
| NATIONAL FUEL GAS DISTRIBUTION CORPORATION | CERTIFICATE |
| NATIONAL FUEL GAS SUPPLY CORPORATION | PURSUANT TO |
| HORIZON ENERGY DEVELOPMENT, INC. | RULE 24 |
| AND ITS SUBSIDIARIES | |
| HIGHLAND FOREST RESOURCES, INC. | |
| LEIDY HUB, INC. | |
| DATA-TRACK ACCOUNT SERVICES, INC. | |
| SENECA INDEPENDENCE PIPELINE COMPANY | |
| SENECA RESOURCES CORPORATION | |
| AND ITS SUBSIDIARIES | |
| UPSTATE ENERGY INC. | |
| NIAGARA INDEPENDENCE MARKETING COMPANY | |
| NATIONAL FUEL RESOURCES, INC. | |
| HORIZON POWER, INC. |
File No. 70-10074
(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”), Horizon Energy Development, Inc. (“Horizon Energy”) and its subsidiaries, Highland Forest Resources, Inc. (“Highland”), Leidy Hub, Inc. (“Leidy”), Data-Track Account Services, Inc. (“Data-Track”), Seneca Independence Pipeline Company (“SIP”), Seneca Resources Corporation (“Seneca”) and its subsidiaries, Upstate Energy Inc. (“Upstate”), Niagara Independence Marketing Company (“NIM”), National Fuel Resources, Inc. (“NFR”) and Horizon Power, Inc. (“Power”) (collectively, the “Subsidiaries”), in their Application-Declaration on Form U-1, as amended (“Application-Declaration”), in SEC File No. 70-10074, have been carried out in accordance with the terms and conditions of, and for the purposes as represented by, said Application-Declaration and the Order of the Securities and Exchange Commission (“Commission”) (HCAR No. 35-27600, dated November 12, 2002) with respect thereto.
1. EXTERNAL FINANCING BY NATIONAL
a. Common Stock
During the quarter ended March 31, 2003 (the "Quarter"), National issued the following shares of common stock through the following plans:
Number of Newly Number of Shares Number of Shares Exchanged as
Name Of Plan Issued Shares Purchased in Open Market Consideration For Share Issuances
Direct Stock Purchase and 86,773 -0- -0-
Dividend Reinvestment Plan
Tax Deferred Savings 86,628 -0- -0-
Plans (401(k))
Employee Stock Ownership Plan -0- 2,704 -0-
Thrift Plan -0- 10,240 -0-
1997 Award & Option Plan -0- -0- -0-
1993 Award & Option Plan 19,260 -0- 4,035
1984 Stock Plan 15,652 -0- 9,910
1983 Incentive Stock Option Plan 16,544 -0- 12,406
Retainer Policy for 2,573 -0- -0-
Outside Directors
Total 227,430 12,944 26,351
Net New Shares 201,079
Aggregate gross consideration received upon issuance of 201,079 shares: $4,474,459.43.
Other than as set forth above, National did not sell any common stock during the Quarter. National did not issue any common stock as consideration in connection with any acquisition during the Quarter.
During the Quarter, the Compensation Committee of the Board of Directors of National did not award any stock options, shares of restricted stock, performance units, performance shares or other common stock-based awards.
b. Preferred Securities
National has no preferred securities outstanding.
c. Long-Term Debt
On February 18, 2003, National issued $250,000,000 of 5.25% Notes, due March 1, 2013. A description of the Notes is set forth in the Prospectus Supplement, dated February 12, 2003, filed by the Company with the Commission on February 13, 2003. The Prospectus Supplement and the accompanying Prospectus, dated January 22, 2003, are incorporated herein by reference. As part of the same series of transactions, National acquired corresponding notes from Seneca, Distribution Corporation, Supply Corporation and Highland in the amounts of $100,000,000, $90,000,000, $30,000,000 and $30,000,000, respectively.
On March 11, 2003, National redeemed the remaining $2,300,000 principal amount of its 6.214% Series D Notes due 2024 at a price of 97.8265%, plus accrued interest.
On March 20, 2003, National redeemed the entire principal amount of its $50,000,000 8.48% Series C Notes due 2024 at the general redemption price of 105.09%, plus accrued interest.
d. Stock Purchase Contracts and Stock Purchase Units
National did not issue any stock purchase contracts or stock purchase units during the Quarter.
e. Short-term Debt
(1) Short-term Notes
National issued short-term notes (in all cases having maturities of no more than 270 days) to banks or other financial institutions during the Quarter. The maximum amount of such notes outstanding at any time during the Quarter was $253,900,000.
(2) Commercial Paper
National sold commercial paper during the Quarter through Merrill Lynch Money Markets, Inc., J.P. Morgan Securities Inc. and/or Goldman, Sachs & Co. The maximum amount of commercial paper outstanding at any time during the Quarter was $185,800,000.
(3) Total Short-term Debt
The maximum aggregate amount of short-term debt securities of National outstanding at any time during the Quarter was $391,900,000.
2. FINANCING SUBSIDIARIES AND SPECIAL PURPOSE SUBSIDIARIES
National did not organize any new Financing Subsidiaries or Special Purpose Subsidiaries during the Quarter. National's Financing Subsidiaries and Special Purpose Subsidiaries are as follows:
------------------------- ---------------------- ----------------------- ---------------------- ----------------------
Seneca Player Corp. 3062782 Nova Scotia 3062783 Nova Scotia Seneca New Brunswick
Co. Co. L.P.
------------------------- ---------------------- ----------------------- ---------------------- ----------------------
Value of investment $3,902,126 $112,697,871 $1,447,974 $342,481,494
account in subsidiary
------------------------- ---------------------- ----------------------- ---------------------- ----------------------
Balance sheet account fully consolidated fully consolidated fully consolidated fully consolidated
where investment and into National into National into National into National
cost booked
------------------------- ---------------------- ----------------------- ---------------------- ----------------------
Amount invested in $3,902,126 $112,697,871 $1,447,974 $342,481,494
subsidiary
------------------------- ---------------------- ----------------------- ---------------------- ----------------------
Form of organization corporation unlimited liability unlimited liability limited partnership
company company
------------------------- ---------------------- ----------------------- ---------------------- ----------------------
Percentage owned by 100% 100% 100% 100%
National or a
Nonutility Subsidiary
------------------------- ---------------------- ----------------------- ---------------------- ----------------------
Identification of other N/A N/A N/A N/A
owners if not 100% owned
------------------------- ---------------------- ----------------------- ---------------------- ----------------------
Purpose of investment increase tax increase tax increase tax increase tax
in subsidiary efficiencies efficiencies efficiencies efficiencies
------------------------- ---------------------- ----------------------- ---------------------- ----------------------
Securities authorized 1,000 shares of 1,000,000 shares, in 1,000,000 shares, in limited partnership
to be issued common stock such classes, and such classes, and units
with such rights and with such rights and
conditions, as conditions, as
directors may directors may
determine determine
------------------------- ---------------------- ----------------------- ---------------------- ----------------------
3. FINANCING BY SUBSIDIARIES
Distribution Corporation issued short-term debt securities through the system money pool (“Money Pool”) as set forth below under Section 4. The Nonutility Subsidiaries did not engage in financing transactions other than exempt transactions.
4. MONEY POOL
During the Quarter, National coordinated the borrowing requirements of certain Subsidiaries through the money pool. For each participant in the Money Pool, the following table lists the maximum amount of borrowings incurred through, and the maximum amount of investments made in, the Money Pool during the Quarter:
Maximum Borrowings
Through Money Pool Maximum Investments
($) in Money Pool ($)
---------------------------- --------------------- ---------------------
National 0 39,200,000
---------------------------- --------------------- ---------------------
Distribution Corporation 108,600,000 33,800,000
---------------------------- --------------------- ---------------------
Supply Corporation 25,200,000 19,400,000
---------------------------- --------------------- ---------------------
Horizon Energy 0 1,400,000
---------------------------- --------------------- ---------------------
Highland 229,000,000 0
---------------------------- --------------------- ---------------------
Leidy 0 800,000
---------------------------- --------------------- ---------------------
Data-Track 0 600,000
---------------------------- --------------------- ---------------------
SIP 14,300,000 0
---------------------------- --------------------- ---------------------
Seneca 112,200,000 0
---------------------------- --------------------- ---------------------
Upstate 0 300,000
---------------------------- --------------------- ---------------------
NIM 0 0
---------------------------- --------------------- ---------------------
NFR 0 61,000,000
---------------------------- --------------------- ---------------------
Power 0 0
---------------------------- --------------------- ---------------------
The interest rates applied to Money Pool borrowings and investments during the Quarter are set forth in Exhibit 1 hereto, which is incorporated herein by reference.
5. GUARANTEES
During the Quarter, National issued ten guarantees on behalf of NFR, in the following amounts: $10,000,000, $2,000,000, $3,000,000, $1,000,000, $8,000,000, $67,000,000, $500,000, $3,500,000, $15,000,000 and $8,000,000.
National also issued two guarantees on behalf of Horizon Power, in the amounts of $2,716,362 and $2,070,391.
The maximum amount of guarantees and credit support that National had outstanding on behalf of its Subsidiaries at any time during the Quarter was $517,872,753. The guarantees and credit support relate primarily to: (i) obligations under derivative financial instruments, which are included on the consolidated balance sheet in accordance with Statement of Financial Accounting Standards No. 133; (ii) Distribution Corporation obligations to purchase gas to be resold in its regulated business in accordance with established regulatory mechanisms to pass through the cost of that gas to its retail customers; (iii) NFR or Upstate obligations to purchase gas or to purchase gas transportation/storage services where the amounts due on those obligations each month are included on National's consolidated balance sheet as a current liability; and (iv) other obligations which are reflected on National's consolidated balance sheet. National believes that the likelihood it would be required to make payments under the guarantees is remote.
6. HEDGING TRANSACTIONS
During the Quarter, National did not enter into any Interest Rate Hedges or Anticipatory Hedges.
7. CHANGES IN CAPITAL STRUCTURE OF MAJORITY-OWNED NONUTILITY SUBSIDIARIES
During the Quarter, Horizon Energy Development, s.r.o., one of the lower-tier subsidiaries of Horizon Energy Development, Inc., in accordance with the authorization of the relevant Czech regulatory authority, reduced its stated capital by approximately $1.5 million, which funds were ultimately remitted to Horizon Energy Development, Inc.
8. NONUTILITY SUBSIDIARY REORGANIZATIONS
During the Quarter, Highland was reorganized as a New York corporation (it was formerly a Pennsylvania corporation), and Seneca contributed to Highland certain rights to timber assets in exchange for stock of Highland.
9. OTHER ITEMS
National filed a Form U-6B-2 on February 28, 2003.
National's consolidated balance sheet as of March 31, 2003 is included in National's Form 10-Q filed with the Commission on May 15, 2003 and incorporated herein by reference.
Distribution Corporation's balance sheet as of March 31, 2003 is set forth in Exhibit 2 hereto, which is incorporated herein by reference and filed confidentially pursuant to Rule 104(b).
SIGNATURES
Pursuant to the requirements of the Public Utility Holding Company Act of 1935, the undersigned companies have duly caused this First 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 |
| NATIONAL FUEL GAS SUPPLY CORPORATION |
| By: /s/ D. J. Seeley |
| D. J. Seeley |
| 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 |
| LEIDY HUB, INC. |
| By: /s/ W. E. DeForest |
| W. E. DeForest |
| President |
| DATA-TRACK ACCOUNT SERVICES, INC. |
| By: /s/ P. C. Ackerman |
| P. C. Ackerman |
| President |
| SENECA INDEPENDENCE PIPELINE COMPANY |
| By: /s/ W. E. DeForest |
| W. E. DeForest |
| President, Secretary & Treasurer |
| SENECA RESOURCES CORPORATION |
| By: /s/ J. A. Beck |
| J. A. Beck |
| President |
| UPSTATE ENERGY INC. |
| By: /s/ T. L. Atkins |
| T. L. Atkins |
| Treasurer |
| NIAGARA INDEPENDENCE MARKETING COMPANY |
| By: /s/ T. L. Atkins |
| T. L. Atkins |
| Treasurer |
| NATIONAL FUEL RESOURCES, INC. |
| By: /s/ D. L. DeCarolis |
| D. L. DeCarolis |
| Vice President and Secretary |
| HORIZON POWER, INC. |
| By: /s/ B. H. Hale |
| B. H. Hale |
| President |
Dated: May 30, 2003
EXHIBIT 1
Money Pool Interest Rates
The interest rate applied to Money Pool borrowings is the same for all participants that borrow through the Money Pool. The interest rate applied to Money Pool investments is the same for all participants that invest in the Money Pool.
Interest Rate Interest Rate
Applied to Applied to
Date Borrowings Investments
01/01/2003 1.72% 1.72%
01/02/2003 1.71% 1.71%
01/03/2003 1.72% 1.72%
01/04/2003 1.72% 1.72%
01/05/2003 1.72% 1.72%
01/06/2003 1.69% 1.69%
01/07/2003 1.68% 1.68%
01/08/2003 1.67% 1.67%
01/09/2003 1.66% 1.66%
01/10/2003 1.65% 1.65%
01/11/2003 1.65% 1.65%
01/12/2003 1.65% 1.65%
01/13/2003 1.63% 1.63%
01/14/2003 1.62% 1.62%
01/15/2003 1.61% 1.61%
01/16/2003 1.60% 1.60%
01/17/2003 1.58% 1.58%
01/18/2003 1.58% 1.58%
01/19/2003 1.58% 1.58%
01/20/2003 1.58% 1.58%
01/21/2003 1.55% 1.55%
01/22/2003 1.55% 1.55%
01/23/2003 1.51% 1.51%
01/24/2003 1.50% 1.50%
01/25/2003 1.50% 1.50%
01/26/2003 1.50% 1.50%
01/27/2003 1.51% 1.51%
01/28/2003 1.49% 1.49%
01/29/2003 1.49% 1.49%
01/30/2003 1.49% 1.49%
01/31/2003 1.49% 1.49%
02/01/2003 1.49% 1.49%
02/02/2003 1.49% 1.49%
02/03/2003 1.49% 1.49%
02/04/2003 1.49% 1.49%
02/05/2003 1.49% 1.49%
02/06/2003 1.54% 1.54%
02/07/2003 1.54% 1.54%
02/08/2003 1.54% 1.54%
02/09/2003 1.54% 1.54%
02/10/2003 1.54% 1.54%
02/11/2003 1.53% 1.53%
02/12/2003 1.54% 1.54%
02/13/2003 1.54% 1.54%
02/14/2003 1.53% 1.53%
02/15/2003 1.53% 1.53%
02/16/2003 1.53% 1.53%
02/17/2003 1.53% 1.53%
02/18/2003 1.56% 1.56%
02/19/2003 1.56% 1.56%
02/20/2003 1.56% 1.56%
02/21/2003 1.56% 1.56%
02/22/2003 1.56% 1.56%
02/23/2003 1.56% 1.56%
02/24/2003 1.57% 1.57%
02/25/2003 1.56% 1.56%
02/26/2003 1.56% 1.56%
02/27/2003 1.56% 1.56%
02/28/2003 1.55% 1.55%
03/01/2003 1.55% 1.55%
03/02/2003 1.55% 1.55%
03/03/2003 1.55% 1.55%
03/04/2003 1.55% 1.55%
03/05/2003 1.55% 1.55%
03/06/2003 1.56% 1.56%
03/07/2003 1.56% 1.56%
03/08/2003 1.56% 1.56%
03/09/2003 1.56% 1.56%
03/10/2003 1.56% 1.56%
03/11/2003 1.56% 1.56%
03/12/2003 1.57% 1.57%
03/13/2003 1.57% 1.57%
03/14/2003 1.48% 1.48%
03/15/2003 1.48% 1.48%
03/16/2003 1.48% 1.48%
03/17/2003 1.48% 1.48%
03/18/2003 1.48% 1.48%
03/19/2003 1.48% 1.48%
03/20/2003 1.47% 1.47%
03/21/2003 1.48% 1.48%
03/22/2003 1.48% 1.48%
03/23/2003 1.48% 1.48%
03/24/2003 1.47% 1.47%
03/25/2003 1.48% 1.48%
03/26/2003 1.47% 1.47%
03/27/2003 1.48% 1.48%
03/28/2003 1.48% 1.48%
03/29/2003 1.48% 1.48%
03/30/2003 1.48% 1.48%
03/31/2003 1.48% 1.48%