[Federal Register: November 21, 2002 (Volume 67, Number 225)]
[Notices]
[Page 70261-70269]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr21no02-141]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 35-27602]
Filings Under the Public Utility Holding Company Act of 1935, As
Amended (``Act'')
November 15, 2002.
Notice is hereby given that the following filings have been made
with the Commission pursuant to provisions of the Act and rules
promulgated under the Act. All interested persons are referred to the
application(s) and/or declaration(s) for complete statements of the
proposed transaction(s) summarized below. The application(s) and/or
declaration(s) and any amendment(s) is/are available for public
inspection through the Commission's Branch of Public Reference.
Interested persons wishing to comment or request a hearing on the
application(s) and/or declaration(s) should submit their views in
writing by December 10, 2002 to the Secretary, Securities and Exchange
Commission, Washington, DC 20549-0609, and serve a copy on the relevant
applicant(s) and/or declarant(s) at the address(es) specified below.
Proof of service (by affidavit or, in the case of an attorney at law,
by certificate) should be filed with the request. Any request for
hearing should identify specifically the issues of facts 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
the matter. After December 10, 2002, the application(s) and/or
declaration(s), as filed or as amended, may be granted and/or permitted
to become effective.
American Electric Power Service Corporation (70-8531)
American Electric Power Service Corporation (``AEPSC''), 1
Riverside Plaza, Columbus, Ohio 43215, a service company subsidiary of
American Electric Power Corporation (``AEP''), a registered holding
company, has filed a post-effective amendment to an application under
sections 9(a) and 10 of the Act and rule 54 under the Act.
By order dated April 26, 1995 (HCAR No. 26280) (``Initial Order'')
the Commission authorized Central and South West Services, Inc.
(``CSWS''), a service company subsidiary of Central and South West
Corporation (``CSW''), a registered holding company, to use excess
resources in its engineering and construction department, which
resources may not be needed to provide services to affiliates within
its system at any given time, to provide power plant control system
procurement, integration and programming services, and power plant
engineering and construction services to nonaffiliated utilities
through December 31, 1997. By order dated December 11, 1997 (HCAR No.
26794) (``Extension Order''), the Commission extended the term of the
authority granted by the Initial Order through December 31, 2002.By
order dated July 21, 1998 (HCAR No. 26898) (``Supplemental Order'') the
Commission approved an application to more accurately define
engineering and construction services provided to nonaffiliated
entities and to permit the provision of environmental licensing,
testing, compliance and remediation as well as equipment maintenance to
nonaffiliated entities.
By order dated June 24, 2000 (HCAR No. 27186) (``Merger Order'')
the Commission approved, among other things the merger of CSW and AEP,
the merger of CSWS into AEPSC, the succession of AEPSC to the authority
granted in the Initial Order, the Extension Order and the Supplemental
Order, and the extension of that authorized activity to all affiliate
companies in the post-merger AEP system.
AEPSC now requests that the Commission amend the authority granted
in the Initial Order, as amended by the Extension Order, the
Supplemental Order, and the Merger Order, to extend through June 30,
2005.
Entergy Corporation, et al. (70-9123)
Entergy Corporation (``Entergy''), 639 Loyola Avenue, New Orleans,
Louisiana 70113, a registered holding company; Entergy's wholly owned
subsidiaries Entergy Enterprises, Inc. (``Enterprises''), Entergy
Global Power Operations Corporation (``Global''), Entergy Power
Operations U.S., Inc. (``Power US''), all located at 20 Greenway Plaza,
Houston, Texas 77046; Entergy Nuclear, Inc. (``Nuclear''), 1340 Echelon
Parkway, Jackson, Mississippi 39213, Entergy Operations Services, Inc.
(``Operations''), and Entergy Power, Inc., 110 James Parkway West, St.
Rose, Louisiana 70087 (``Power'' and combined ``Applicants'') have
filed an application-declaration under sections 6(a), 7, 9(a), 10,
12(b), 12(c), and 13(b) of the Act and rules 54, 90, and 91 under the
Act.
By order dated June 22, 1999 (``June Order''),\1\ the Commission
granted authority: (1) For Entergy to acquire, directly or indirectly,
the securities of one or more companies (``New Subsidiaries'')
organized for purposes of performing development activities and/or for
purposes of acquiring, including financing or refinancing an
acquisition, owning and holding the securities of: (a) ``exempt
wholesale generators'' (``EWGs''), as defined in section 32(a) of the
Act, (b) ``foreign utility companies'' (``FUCOs''), as defined in
section 33(a) of the Act, (c) ``exempt telecommunications companies''
(``ETCs''), as defined in section 34(a) of the Act, (d) other
subsidiary companies that are authorized or permitted by rule,
regulation or order of the Commission under the Act to engage in other
businesses (``Authorized Subsidiary Companies''),\2\ (e) other New
Subsidiaries and/or, (f) ``energy related companies'', as defined in
rule 58 under the Act (``Rule 58 Companies''); (2) for Entergy to
acquire, directly or indirectly, the securities of one or more
operating and management companies (``O&M Subs'') organized for the
purpose of providing operations and maintenance services (``O&M
Services'') to nonassociate companies and associate nonutility
companies (collectively, with the companies described in (1) above,
``Nonutility Companies''); (3) for Nonutility Companies to issue and
sell securities to Entergy, to other Nonutility Companies and/or to
nonassociate companies for the purpose of financing or refinancing
investments in Nonutility Companies; (4) for Nonutility Companies to
provide services at other than cost under specific circumstances; (5)
for Nonutility Companies to pay dividends out of unearned surplus; and
(6) for Entergy to consolidate or reorganize Entergy's ownership
interests in one or more Nonutility Companies.
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\1\ See HCAR No. 27039 (June 22, 1999).
\2\ Authorized Subsidiary Companies currently consist of:
Enterprises; Power; Entergy Nuclear, Inc.; Entergy Nuclear
Operations, Inc.; Entergy Operations Services, Inc.; Global; Power
U.S., Entergy Nuclear Fuels Company; Entergy Shaw, LLC; EN Services,
LP; and Gulf South Pipeline, LP.
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Applicants now request an extension of authority for the activities
listed in (1) through (6) above, through December 31, 2005
(``Authorization Period''). In addition, Entergy requests a new
authorization to make initial investments, directly or indirectly, in
the New Subsidiaries or O&M Subsidiaries of up to an aggregate amount
of $750 million (``Investment Limit'') through the Authorization
Period.
I. Acquisitions and Related Financings of New Subsidiaries and O&M Subs
Applicants propose to acquire, directly or indirectly, the
securities of one or more New Subsidiaries. New Subsidiaries will be
organized in order to: (1) Engage in service and development activities
and/or (2)
[[Page 70262]]
acquire and/or finance the acquisition of the securities of one or more
Nonutility Companies. Applicants also propose that Entergy organize and
acquire the capital stock of O&M Subs through December 31, 2005. O&M
Subs will be formed as domestic or foreign corporations, partnerships
or other entities.
Applicants request authority for Entergy to make investments in New
Subsidiaries and O&M Subsidiaries by any combination of: (1) Purchases
of equity interests (``Equity Capital''); \3\ (2) capital
contributions; (3) open account advances without interest and (4) loans
and guarantees of securities or other obligations of New Subsidiaries
and O&M Subs. Applicants state that Entergy will obtain funds for these
investments from proceeds of previously authorized borrowings, sales of
its common stock, future authorized securities issuances and other
available cash resources. Applicants commit that the initial
investments in the Equity Capital of New Subsidiaries and O&M Subs will
be included in the Investment Limit.
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\3\ Equity Capital may include purchases of capital shares,
partnership interests, member interests in limited liability
companies, trust certificates or other forms of equity interests.
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Applicants state that loans by Entergy or a Nonutility Company to a
Nonutility Company generally will have interest rates and maturity
dates designed to parallel Entergy's effective cost of capital. Loans
by Entergy or a Nonutility Company to a Nonutility Company that is
partially owned by Entergy, directly or indirectly, however, may have
interest rates and maturity dates designed to provide a return to the
holding company of not less than its effective cost of capital (``Other
Loans''). The principal amount of Other Loans by Entergy or a
Nonutility Company to a Nonutility Company (including New Subsidiaries
and O&M Subs) will be included in the Investment Limit. Applicants
state that a Nonutility Company to which Other Loans are made will not
provide any services to a Nonutility Company that does not meet one of
the conditions for the rendering of services on a basis other than
cost, as described below.
Applicants assert that there are a number of legal and business
reasons for the use of special purpose subsidiaries such as the New
Subsidiaries in connection with investments in Nonutility Companies.
For example, the formation and acquisition of special purpose
subsidiaries is often necessary or desirable to facilitate the
acquisition and ownership of a FUCO, an EWG or another Nonutility
Company. Furthermore, the laws of some foreign countries may require
that the bidder in a privatization program be a domestic company in
that country. In these cases, Applicants state that it would be
necessary for Entergy to form a foreign subsidiary as the entity
submitting the bid or other proposal. In addition, the interposition of
one or more New Subsidiaries may allow Entergy to defer the
repatriation of foreign source income, take full advantage of favorable
tax treaties among foreign countries, or otherwise to secure favorable
U.S. income tax treatment that would not otherwise be available.
Applicants state that New Subsidiaries also serve to isolate business
risks, facilitate subsequent adjustments or sales to ownership
interests by the members of an ownership group, or to raise debt or
equity capital in domestic or foreign markets.
Applicants state that, to the extent that Entergy provides funds to
a New Subsidiary that are used for the purposes of investing in an EWG
or FUCO, the amount of the investment will be included in Entergy's
``aggregate investment'' in these entities, as calculated in accordance
with rule 53. Additionally, Applicants assert that, to the extent that
Entergy provides funds to a New Subsidiary which are used to invest in
a Rule 58 Company, the amount of the investment will be included in
Entergy's ``aggregate investment'' as defined under rule 58.
II. Issuance of Securities
Applicants also requests authorization for Nonutility Companies to
issue and/or sell equity or debt securities in an aggregate amount up
to the Investment Limit, including common stock, LLC member interests,
partnership and limited partnership interests, preferred stock or other
preferred or equity-linked securities (collectively, ``preferred
securities''), short-term debt securities, such as promissory notes or
commercial paper, and long-term debt securities (collectively, ``Other
Securities'') to Entergy, to other Nonutility Companies or to
nonassociate companies, including banks, insurance companies, and other
financial institutions during the Authorization Period.
Other Securities will be subject to the following financing
parameters:
(1) The effective cost of money on long-term debt borrowings will
not exceed the greater of (i) 500 basis points over the comparable-term
U.S. Treasury securities or (ii) a gross spread over U.S. Treasuries
that is consistent with similar securities of comparable credit quality
and maturities issued by other companies.
(2) The effective cost of money on short-term debt borrowings will
not exceed the greater of (i) 500 basis points over the comparable-term
London Interbank Offered Rate (``LIBOR'') or (ii) a gross spread over
LIBOR that is consistent with similar securities of comparable credit
quality and maturities issued by other companies.
(3) The dividend rate on any series of preferred securities will
not exceed the greater of (i) 500 basis points over the yield to
maturity of a U.S. Treasury security having a remaining term equal to
the term of the series of preferred securities or (ii) a rate that is
consistent with similar securities of comparable credit quality and
maturities issued by other companies.
Also, in the case of the issuance of any Other Securities that
involve loans by Entergy or a Nonutility Company to a Nonutility
Company at interest rates and maturities designed to provide a return
to the lending company in excess of its effective cost of capital, the
borrowing Nonutility Company will not provide any services to any
associate Nonutility Company except a company which meets one of the
conditions for the rendering of services on a basis other than ``at
cost'', as described below.\4\
Applicants state that the net proceeds from the issuance and sale
of Other Securities would be used for general corporate purposes, for
example: (1) For loans to and/or equity investments in Nonutility
Companies; (2) for the repayment, refinancing or redemption of
outstanding securities of Entergy or Nonutility Companies originally
issued for purposes of acquiring interests in Nonutility Companies or
providing funds for the authorized or permitted business activities of
Nonutility Companies and (3) for working capital or other cash
requirements of Nonutility Companies, provided that the net proceeds
will only be applied to finance activities that are exempt under the
Act or are otherwise authorized or permitted by rule, regulation or
order of the Commission. Applicants state that at the time of issuance
of any Other Securities that are recourse to Entergy, directly or
indirectly, the proceeds of which are to be used to invest in any
Exempt Project,
[[Page 70263]]
the amount will be counted towards Entergy's ``aggregate investment''
in EWGs and FUCOs as required under rule 53.
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\4\ Applicants request that Non-utility Companies be permitted
to modify the terms of their charters or other governing documents
(``Charter Amendments'') as necessary to effectuate the issuance of
Other Securities. Entergy would describe the general terms of any
Charter Amendment in the next quarterly certificate filed with the
Commission pursuant to rule 24 in this file.
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Entergy represents that none of Entergy's operating companies
(``Operating Companies'') \5\ will incur any indebtedness, extend any
credit, or sell or pledge its assets, directly or indirectly, to or for
the benefit of any Nonutility Company, and that any Other Securities
that may be issued by a Nonutility Company, and any guarantees that may
be issued by Entergy or a Nonutility Company, will not be recourse to
any Operating Company.
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\5\ Entergy's regulated public utility companies Entergy
Arkansas, Inc., Entergy Gulf States, Inc., Entergy Louisiana, Inc.,
Entergy Mississippi, Inc. and Entergy New Orleans, Inc. are referred
to as the ``Operating Companies.''
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III. Provision of O&M Services and Other Services
Applicants propose that Entergy provide O&M Services, through one
or more O&M Subs. O&M Services would be provided to, or for the benefit
of, associate and nonassociate developers, owners and operators of
domestic and foreign power projects and other electric utility systems
or facilities. O&M Services may be provided to projects that Entergy
may develop on its own, through an associate Nonutility Company, or in
collaboration with third parties.
O&M Services would include, for example, development, engineering,
design, construction and construction management, pre-operational
start-up, testing and commissioning, long-term operations and
maintenance, fuel procurement, management and supervision, technical
and training, administrative support, market analysis, consulting,
coordination and any other managerial, technical, administrative or
consulting required in connection with the business of owning or
operating facilities used for the generation, transmission or
distribution of electric energy (including related facilities for the
production, conversion, sale or distribution of thermal energy) or
coordinating their operations in the power market. Applicants also
propose that an O&M Sub may also lease all or a portion of the
facilities with respect to which it is providing O&M Services. However,
Applicants state that an O&M Sub would not undertake to enter into
leases without further approval of the Commission if, as a result
thereof, the O&M Sub would become a ``public utility company'' as
defined in the Act.
Applicants request authorization for Nonutility Companies (i) to
provide other Nonutility Companies with administrative services
(``Administrative Services''); (ii) to provide consulting services
(``Consulting Services'') to other Nonutility Companies and to
nonassociate companies and (iii) to engage in development activities
(``Development Activities''), all on a worldwide basis. These services
are referred to collectively as ``Other Services.''
Applicants state that Administrative Services would include, for
example, corporate and project development and planning, management,
administrative, employment, tax, legal, accounting, engineering,
consulting, marketing, utility performance and electric data processing
services, and intellectual property development, marketing and other
support services.
Applicants state that Consulting Services would include, for
example, providing Entergy system technical capabilities and expertise
primarily in the areas of electric power generation, transmission and
distribution and ancillary operations. Applicants represent that,
except for consulting required in connection with the performance of
O&M Services, O&M Subs will not provide Consulting Services to
associate or nonassociate companies.
Applicants state that Development Activities would include, for
example, investigating sites, research, engineering and licensing
activities, acquiring options and rights, contract drafting and
negotiation, legal, accounting and financial analysis, preparing and
submitting bids and proposals, and other activities necessary to
identify and analyze investment opportunities on behalf of companies in
the Entergy system.\6\
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\6\ Applicants state that Development Activities would not be
performed on behalf of any of Entergy's regulated utilities.
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Applicants request an exemption from the at-cost requirements of
rules 90 and 91 for O&M Services rendered to Nonutility Companies, if
one or more of the following conditions applies:
(i) The Nonutility Company is a FUCO or an EWG that derives no part
of its income, directly or indirectly, from the generation and sale of
electric energy within the United States;
(ii) The Nonutility Company is an EWG that sells electricity at
market-based rates that have been approved by the FERC or the relevant
state public utility commission, provided that the purchaser is not a
Regulated Utility;
(iii) The Nonutility Company is a ``qualifying facility'' (``QF'')
under the Public Utility Regulatory Policies Act of 1978, as amended
(``PURPA''), that sells electricity exclusively at rates negotiated at
arm's length to one or more industrial or commercial customers
purchasing the electricity for their own use and not for resale, or to
a electric utility company (other than a Regulated Utility) at the
purchaser's ``avoided costs'' as determined under the regulations under
PURPA and
(iv) The Nonutility Company is an EWG or QF that sells electricity
at rates based upon its cost of service, as approved by the FERC or any
state public utility commission having jurisdiction, provided that the
purchaser of the electricity is not a regulated utility.
The Nonutility Companies described in clauses (i)-(iv) are referred
to collectively below as ``Exempt Nonutility Companies.''
Applicants state that Other Services would generally be performed
by Nonutility Companies for associate Nonutility Companies at cost.
However, Applicants request an exemption from the at cost requirements
of rules 90 and 91 for Other Services rendered to Exempt Nonutility
Companies and to partially owned Nonutility Companies, provided that
the ultimate purchaser of the Other Services is not an Operating
Company, System Energy Resources, Inc., System Fuels, Inc., Entergy
Services, Inc., Entergy Operations, Inc. or any other subsidiary that
Entergy may create, the activities and operations of which are
primarily related to the domestic sale of electric energy at retail
(exclusive of Nonutility Companies) or at wholesale, or the provision
of goods or services to Entergy's affiliates. In addition, Entergy
requests that the exemption apply to Other Services provided by
Nonutility Companies to any Nonutility Company (a) that is engaged
solely in the business of developing, owning, operating and/or
providing Other Services to Exempt Nonutility Companies, or (b) that
does not derive, directly or indirectly, any material part of its
income from sources within the United States and is not a public
utility company operating within the United States.
IV. Reorganization
Entergy intends, from time to time, to consolidate or reorganize
all or any part of its ownership interests in certain Nonutility
Companies and/or New Subsidiaries under one or more New Subsidiaries.
For example, to effect a reorganization, Entergy could directly or
indirectly contribute to a New Subsidiary all of the outstanding Equity
Capital of one or more Nonutility
[[Page 70264]]
Companies (including a New Subsidiary) or sell the Equity Capital of
one or more Nonutility Companies to a New Subsidiary. Alternatively, a
Nonutility Company could distribute, as a dividend, the securities of
one or more Nonutility Companies to a New Subsidiary.
Applicants request authority for Entergy to consolidate or
otherwise reorganize its ownership interest in one or more Nonutility
Companies under the New Subsidiaries so long as the acquisition of the
securities of the Nonutility Company is authorized by the Commission or
is exempt from the Act.
V. Payment of Dividends Out of Capital or Unearned Surplus by
Nonutility Companies
Applicants request authority for a Nonutility Company to declare
and pay dividends out of capital or unearned surplus to its immediate
parent companies through December 31, 2005, subject to applicable
corporate law and any applicable financing agreement that restricts
distributions to shareholders.
FirstEnergy Corp., et al. (70-10079)
FirstEnergy Corporation (``FirstEnergy''), a registered holding
company, Ohio Edison Company (``Ohio Edison''), a public-utility
company subsidiary of First Energy and exempt holding company under
section 3(a)(2) of the Act,\7\ The Cleveland Electric Illuminating
Company, a public-utility company subsidiary of First Energy, The
Toledo Edison Company, a public-utility company subsidiary of First
Energy, American Transmission Systems, Incorporated, a public-utility
company subsidiary of First Energy, all at 76 South Main Street, Akron,
Ohio 44308, Pennsylvania Power Company, 1 E. Washington Street, P.O.
Box 891, New Castle, Pennsylvania 16103, a public-utility company
subsidiary of Ohio Edison, Metropolitan Edison Company, 2800 Pottsville
Pike, Reading, Pennsylvania 19640-0001, a public-utility company
subsidiary of First Energy, Pennsylvania Electric Company, 1001 Broad
Street, Johnstown, Pennsylvania 15907, a public-utility company
subsidiary of First Energy, and Jersey Central Power & Light Company
(collectively, ``Applicants''), Madison Avenue at Punchbowl Road,
Morristown, New Jersey 07060-9871, a public-utility company subsidiary
of First Energy, have filed an application under section 9(c)(3) of the
Act.
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\7\ See Ohio Edison, HCAR No. 21019 (April 26, 1979).
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By order dated October 29, 2001 (HCAR No. 27459), the Commission
authorized FirstEnergy, which at the time was a holding company that
claimed exemption from registration by rule 2, to merge with GPU, Inc.,
a registered holding company. In that order, the Commission also
authorized FirstEnergy to retain its investments in low-income housing
properties that qualified for Low Income Housing Tax Credits (``LITC
Projects'') under section 42 of the Internal Revenue Code (``IRC''). As
of December 31, 2001, FirstEnergy held, directly or indirectly,
approximately $102 million of these types of passive investments.
Applicants request authority to invest, through December 31, 2005,
up to $100 million in: (1) New or existing LIHTC Projects located
anywhere in the United States; and (2) historic building or other
qualified rehabilitated building projects (``Section 47 Projects'')
located within their service territories. By investing in Section 47
Projects, Applicants would earn tax credits under section 47 of the IRC
and, according to Applicants, FirstEnergy may also qualify for tax
credits under state law.
Applicants would not take any active role in the development,
management, or operation of any LIHTC Projects or Section 47 Projects
(collectively, ``Tax Credit Projects''), and would not acquire any
interest in any venture holding a Tax Credit Project if that venture
would consequently become an ``affiliate'' of First Energy. Tax Credit
Projects would be organized as limited liability partnerships or
limited liability companies, and Applicants would invest only as a
limited partner or non-managing member, respectively. In general, a
separate limited partnership or manager-managed LLC would be
established for each new qualifying Tax Credit Project. This structure
would: (1) Allow each Tax Credit Project to be financed on a stand-
alone basis, under the control of an unaffiliated third party; (2)
insulate each investment property from any liabilities that may arise
in connection with the development or management of any other Tax
Credit Project; and (3) facilitate compliance with the requirements of
sections 42 and 47 of the IRC Code.
Applicants commit to dispose of their ownership interests in each
Tax Credit Project upon becoming fully vested in the tax credits,
including any state credits.
Georgia Power Company (70-10080)
Georgia Power Company (``Georgia ``), 241 Ralph McGill Boulevard,
NE., Atlanta, Georgia 30308, a public-utility subsidiary company of The
Southern Company (``Southern''), a registered holding company, has
filed a declaration under sections 6(a) and 7 of the Act and rule 54
under the Act.
Georgia proposes to issue and sell, from time-to-time, through
March 31, 2006 (the ``Authorization Period'') up to an aggregate
principal amount at any one time outstanding up to $3.2 billion of the
following: (1) Short-term notes to lenders; (2) commercial paper to or
through dealers; and/or (3) issue non-negotiable promissory notes to
public entities for their revenue anticipation notes.
Georgia proposes to borrow from certain banks or other lending
institutions through the Authorization Period. The institutional
borrowings will be evidenced by notes to be dated as of the date of
such borrowings and to mature in not more than one year after the date
of issue, or by ``grid'' notes evidencing all outstanding borrowings
from each lender to be dated as of the date of the initial borrowing
and to mature not more than one year after the date of issue. Georgia
proposes that it may provide that any note evidencing such borrowings
may not be prepayable, or that it may be prepaid with payment of a
premium that is not in excess of the stated interest rate on the
borrowing to be prepaid.
Borrowings will be at the lender's prevailing rate offered to
corporate borrowers of similar quality. Such rates will not exceed the
prime rate or (i) LIBOR plus up to 3% or (ii) a rate not to exceed the
prime rate to be established by bids obtained from the lenders prior to
a proposed borrowing. Compensation for the credit facilities may be
provided by fees of up to 1% per annum of the amount of the facility.
Compensating balances may be used in lieu of fees to compensate certain
of the lenders.
Georgia also proposes to issue and sell commercial paper to or
through dealers from time to time through the Authorization Period.
Such commercial paper would be in the form of promissory notes with
varying maturities not to exceed 390 days. Georgia states that the
actual maturities would be determined by market conditions, the
effective interest costs of issuing such commercial paper, and
Georgia's anticipated cash flow, including the proceeds of other
borrowings, at the time of issuance. The commercial paper notes will be
issued in denominations of not less than $50,000 and will be sold by
Georgia directly to or through dealer. The discount rate (or the
interest rate in the case of interest-bearing notes), including any
commissions, will not be in excess
[[Page 70265]]
of the discount rate per annum (or equivalent interest rate) prevailing
at the date of issuance for commercial paper of comparable quality of
the particular maturity sold by issuers to commercial paper dealers.
Georgia also proposes, through the Authorization Period, to effect
short-term borrowings in connection with the financing of certain
pollution control facilities through the issuance by public entities of
their revenue bond anticipation notes. Under an agreement with each
such public entity, the entity would effectively loan to Georgia the
proceeds of the sale of such revenue bond anticipation notes, having a
maturity of not more than one year after date of issue, and Georgia in
turn would issue Georgia's non-negotiable promissory note. Such note
would provide for payments to be made at times and in amounts which
shall correspond to the payments with respect to the principal of,
premium, if any, and interest, which shall not exceed the prime rate,
on such revenue bond anticipation notes, whenever and in whatever
manner the same shall become due, whether at stated maturity, upon
redemption or declaration or otherwise.
By order dated March 13, 1996 (HCAR No. 26490) (``1996 Order''),
the Commission authorized Georgia to effect short-term debt borrowings
prior to January 1, 2003. By order dated November 8, 2000 (HCAR No.
27273) (``2000 Order'') (and together with the 1996 Order, the
``Financing Orders''), the Commission authorized Georgia to effect any
such short-term borrowings through Southern's consolidated commercial
paper program prior to June 30, 2004. According to the Financing
Orders, any borrowings under the Financing Orders must be aggregated
and may not exceed $1.7 billion. Georgia states that at August 14,
2002, borrowings in an aggregate principal amount of approximately
$531,800,000 were outstanding under the Financing Orders.
The proceeds from the proposed borrowings will be used by Georgia
for working capital purposes, including the financing in part of its
construction program. None of the proceeds from any borrowing or from
the sale of any of the notes will be used by Georgia, directly or
indirectly, for the acquisition of any interest in an ``exempt
wholesale generator'' or a ``foreign utility company,'' as those terms
are defined in sections 32 and 33 of the Act, respectively. Georgia
further states that, except as may be otherwise authorized by the
Commission, any short-term borrowings of Georgia outstanding after
March 31, 2006 will be retired from internal cash resources, the
proceeds of equity financings or the proceeds of long-term debt.
Savannah Electric Power Company (70-10081)
Savannah Electric Power Company (``Savannah''), 600 East Bay
Street, Savannah, Georgia 31401, a public-utility subsidiary company of
The Southern Company (``Southern''), a registered holding company, has
filed a declaration under sections 6(a) and 7 of the Act and rule 54
under the Act.
Savannah proposes to issue and sell, from time-to-time, through
March 31, 2006 (the ``Authorization Period'') up to an aggregate
principal amount at any one time outstanding up to $120 million of the
following: (1) Short-term notes to lenders; (2) commercial paper to or
through dealers; and/or (3) issue non-negotiable promissory notes to
public entities for their revenue anticipation notes.
Savannah proposes to borrow from certain banks or other lending
institutions through the Authorization Period. The institutional
borrowings will be evidenced by notes to be dated as of the date of
such borrowings and to mature in not more than one year after the date
of issue, or by ``grid'' notes evidencing all outstanding borrowings
from each lender to be dated as of the date of the initial borrowing
and to mature not more than one year after the date of issue. Savannah
proposes that any note evidencing such borrowings may not be
prepayable, or that it may be prepaid with payment of a premium that is
not in excess of the stated interest rate on the borrowing to be
prepaid.
Borrowings will be at the lender's prevailing rate offered to
corporate borrowers of similar quality. The rates will not exceed the
prime rate or (i) LIBOR plus up to 3% or (ii) a rate not to exceed the
prime rate to be established by bids obtained from the lenders prior to
a proposed borrowing. Compensation for the credit facilities may be
provided by fees of up to 1% per annum of the amount of the facility.
Compensating balances may be used in lieu of fees to compensate certain
lenders.
Savannah also proposes to issue and sell commercial paper to or
through dealers from time-to-time through the Authorization Period. The
commercial paper would be in the form of promissory notes with varying
maturities not to exceed 390 days. Actual maturities would be
determined by market conditions, the effective interest costs of
issuing such commercial paper, and Savannah's anticipated cash flow,
including the proceeds of other borrowings, at the time of issuance.
The commercial paper notes will be issued in denominations of not less
than $50,000 and will be sold by Savannah directly to or through the
dealer. The discount rate (or the rate in the case of interest-bearing
notes), including any commissions, will not be in excess of the
discount rate per annum (or equivalent interest rate) prevailing at the
date of issuance for commercial paper of comparable quality of the
particular maturity sold by issuers to commercial paper dealers.
Savannah also proposes, through the Authorization Period, to effect
short-term borrowings in connection with the financing of certain
pollution control facilities through the issuance by public entities of
their revenue bond anticipation notes. Under an agreement with each
public entity, the entity would effectively loan to Savannah the
proceeds of the sale of such revenue bond anticipation notes, having a
maturity of not more than one year after date of issue, and Savannah in
turn would issue Savannah's non-negotiable promissory note. The note
would provide for payments thereon to be made at times and in amounts
which shall correspond to the payments with respect to the principal
of, premium, if any, and interest, which shall not exceed the prime
rate, on such revenue bond anticipation notes, whenever and in whatever
manner the same shall become due, whether at stated maturity, upon
redemption or declaration or otherwise.
By order dated March 13, 1996 (HCAR No. 26492) (``1996 Order''),
the Commission authorized Savannah to effect short-term debt borrowings
prior to January 1, 2003. By order dated November 8, 2000 (HCAR No.
27273) (``2000 Order'') (and together with the 1996 Order, the
``Financing Orders''), the Commission authorized Savannah to effect any
such short-term borrowings through Southern's consolidated commercial
paper program prior to June 30, 2004. According to the Financing
Orders, any borrowings under the Financing Orders must be aggregated
and may not exceed $90 million. At August 14, 2002, borrowings in an
aggregate principal amount of approximately $29,400,000 were
outstanding under the Financing Orders.
The proceeds from the proposed borrowings will be used by Savannah
for working capital purposes, including the financing in part of its
construction program. None of the proceeds from any borrowing or from
the sale of any of the notes will be used by Savannah, directly
[[Page 70266]]
or indirectly, for the acquisition of any interest in an ``exempt
wholesale generator'' or a ``foreign utility company,'' as those terms
are defined in sections 32 and 33, respectively. Savannah further
states that, except as may be otherwise authorized by the Commission,
any short-term borrowings of Savannah outstanding after March 31, 2006
will be retired from internal cash resources, the proceeds of equity
financings or the proceeds of long-term debt.
Mississippi Power Company (70-10082)
Mississippi Power Company (``Mississippi''), 2992 West Beach,
Gulfport, Mississippi 39501, an public-utility subsidiary company of
The Southern Company, a registered holding company, has filed a
declaration under sections 6(a) and 7 of the Act and rule 54 under the
Act.
Mississippi proposes to issue and sell, from time-to-time, through
March 31, 2006 (the ``Authorization Period'') up to an aggregate
principal amount at any one time outstanding up to $500 million of the
following: (1) Short-term and/or term-loan notes to lenders; (2)
commercial paper to or through dealers; and/or (3) issue non-negotiable
promissory notes to public entities for their revenue anticipation
notes.
Mississippi proposes to borrow from certain banks or other lending
institutions. The institutional borrowings will be evidenced by notes
to be dated as of the date of such borrowings and to mature in not more
than seven years after the date of issue, or by ``grid'' notes
evidencing all outstanding borrowings from each lender to be dated as
of the date of the initial borrowing and to mature not more than seven
years after the date of issue. Mississippi proposes that any note
evidencing such borrowings may not be prepayable, or that it may be
prepaid with payment of a premium that is not in excess of the stated
interest rate on the borrowing to be prepaid.
Borrowings will be at the lender's prevailing rate offered to
corporate borrowers of similar quality. Such rates will not exceed the
lenders prime rate or (i) LIBOR plus up to 3% or (ii) a rate not to
exceed the prime rate to be established by bids obtained from the
lenders prior to a proposed borrowing. Compensation for the credit
facilities may be provided by fees of up to 1% per annum of the amount
of the facility. Compensating balances may be used in lieu of fees to
compensate certain of the lenders.
Mississippi also proposes to issue and sell commercial paper to or
through dealers from time-to-time through the Authorization Period.
Such commercial paper would be in the form of promissory notes with
varying maturities not to exceed 390 days. Actual maturities would be
determined by market conditions, the effective interest costs of
issuing such commercial paper, and Mississippi's anticipated cash flow,
including the proceeds of other borrowings, at the time of issuance.
The commercial paper notes will be issued in denominations of not less
than $50,000 and will be sold by Mississippi directly to or through the
dealer. The discount rate (or the rate in the case of interest-bearing
notes), including any commissions, will not be in excess of the
discount rate per annum (or equivalent interest rate) prevailing at the
date of issuance for commercial paper of comparable quality of the
particular maturity sold by issuers to commercial paper dealers.
Mississippi also proposes, through the Authorization Period, to
effect short-term borrowings in connection with the financing of
certain pollution control facilities through the issuance by public
entities of their revenue bond anticipation notes. Under an agreement
with each such public entity, the entity would effectively loan to
Mississippi the proceeds of the sale of such revenue bond anticipation
notes, having a maturity of not more than one year after date of issue,
and Mississippi in turn would issue Mississippi's non-negotiable
promissory note. The note would provide for payments thereon to be made
at times and in amounts which shall correspond to the payments with
respect to the principal of, premium, if any, and interest, which shall
not exceed the prime rate, on such revenue bond anticipation notes,
whenever and in whatever manner the same shall become due, whether at
stated maturity, upon redemption or declaration or otherwise.
By order dated March 13, 1996 (HCAR No. 26491) (``1996 Order''),
the Commission authorized Mississippi to effect short-term borrowings
prior to January 1, 2003. By order dated November 8, 2000 (HCAR No.
27273) (``2000 Order'') (and together with the 1996 Order, the
``Financing Orders''), the Commission authorized Mississippi to effect
any such short-term borrowings through a Southern consolidated
commercial paper program prior to June 30, 2004. According to the
Financing Orders, any borrowings under the Financing Orders must be
aggregated and may not exceed $350 million. At August 14, 2002,
borrowings in an aggregate principal amount of approximately
$14,900,000 were outstanding under the Financing Orders.
The proceeds from the proposed borrowings will be used by
Mississippi for working capital purposes, including the financing in
part of its construction program. None of the proceeds from any
borrowing or from the sale of any of the notes will be used by
Mississippi, directly or indirectly, for the acquisition of any
interest in an ``exempt wholesale generator'' or a ``foreign utility
company,'' as those terms are defined in sections 32 and 33 of the Act,
respectively. Mississippi further states that, except as may be
otherwise authorized by the Commission, any short-term or long-term
borrowings of Mississippi outstanding after March 31, 2006 and March
31, 2013, respectively, will be retired from internal cash resources,
the proceeds of equity financings or the proceeds of short-term or
long-term debt.
Entergy Louisiana, Inc. (70-10086)
Entergy Louisiana, Inc. (``Entergy Louisiana''), 639 Loyola Avenue,
New Orleans, Louisiana 70113, a direct, wholly owned public-utility
subsidiary company of Entergy Corporation (``Entergy''), a registered
holding company, has filed an application-declaration under sections
6(a), 7, 9(a), 10, 12(c), and 12(d) of the Act and rules 42, 44, and 46
under the Act.
I. Current Financing Authority
By order dated March 12, 1998 (HCAR No. 26839, ``Prior Order''),
the Commission authorized Entergy Louisiana to engage in a program of
external financing and related transactions through December 31, 2002.
Specifically, the Commission authorized Entergy Louisiana to: (1) Issue
and sell up to a combined aggregate principal amount of $600 million of
first mortgage bonds and/or debentures, with maturities not later than
forty years and fifty years, respectively; (2) issue and sell up to a
combined aggregate principal amount of $260 million of preferred stock
and equity-linked securities; and (3) enter into arrangements for the
issuance and sale of tax-exempt bonds in an aggregate principal amount
of up to $420 million for the financing of pollution control facilities
and sewage and/or solid waste disposal facilities, including the
issuance and pledge of first mortgage bonds issued as collateral
security for such tax-exempt bonds in an aggregate principal amount of
up to $455 million (in addition to the $600 million referenced above).
[[Page 70267]]
II. Requested Authority
Entergy Louisiana requests authority, through March 31, 2006
(``Authorization Period''), to issue and sell up to an aggregate amount
of $750 million (``Aggregate Limit'') in any combination of: (1)
Unsecured long-term indebtedness (``Long-Term Debt''); (2) first
mortgage bonds (``First Mortgage Bonds''); (3) preferred stock
(``Preferred Stock''); and (4) other forms of preferred or equity-
linked securities (``Other Securities''). The terms of the proposed
securities are described below. Generally, the proceeds from sales of
the proposed securities will be used by Entergy Louisiana for its
general corporate purposes, including: financing its capital
expenditures; repaying, redeeming, refunding or purchasing any of its
securities issued in reliance on rule 42 and/or those securities issued
on Entergy Louisiana's behalf under section 9(c)(1); and financing its
working capital requirements.
Long-Term Debt may be convertible into any other securities of
Entergy Louisiana (except common stock), and would have a maturity
ranging between one and fifty years. These securities may be subject to
optional and/or mandatory redemption, in whole or in part, at par or at
premiums above the principal amount. Long-Term Debt may be entitled to
mandatory or optional sinking fund provisions, and may provide for
reset of the coupon under to a remarketing arrangement. Additionally,
Long-Term Debt may be issued at fixed or floating rates of interest,
and may be called from existing investors by a third party. The
maturity dates, interest rates, redemption and sinking fund provisions
and conversion features, if any, of Long-Term Debt, as well as any
associated placement, underwriting or selling agent fees, commissions,
and discounts, if any, would be established by negotiation or
competitive bidding. The interest rate on Long-Term Debt would not
exceed, at the time of issuance, the greater of: (1) 500 basis points
over U.S. Treasury securities having a remaining term comparable to the
term of such series, if issued at a fixed rate or, if issued at a
floating rate, 500 basis points over the London Interbank Offered Rate
(``LIBOR'') for the relevant interest rate period; and (2) a spread
over U.S. Treasury securities or LIBOR, as the case may be, that is
consistent with similar securities of comparable credit quality and
maturities.
All First Mortgage Bonds will have maturities ranging between one
and fifty years. First Mortgage Bonds may be subject to optional and/or
mandatory redemption, in whole or in part, at par or at premiums above
the principal amount. They may be entitled to mandatory or optional
sinking fund provisions and may be issued at fixed or floating rates of
interest. First Mortgage Bonds may provide for reset of the coupon in
accordance with a remarketing arrangement and may be called from
existing investors by a third party. Additionally, they may be backed
by a bond insurance policy. The interest rate on First Mortgage Bonds
will not exceed at the time of issuance the greater of: (1) 500 basis
points over U.S. Treasury securities having a remaining term comparable
to the term of such series if issued at a fixed rate or, if issued at a
floating rate, 500 basis points over LIBOR for the relevant interest
rate period; and (2) a spread over U.S. Treasury securities or LIBOR,
as the case may be, that is consistent with similar securities of
comparable credit quality and maturities issued by other companies.
Entergy Louisiana may issue and sell series of Preferred Stock to
underwriters for deposit, which would subsequently be delivered to
purchasers in a public offering. Preferred Stock and Other Securities
may be issued in one or more series with rights, preferences and
priorities, including those related to redemption, designated in the
instrument creating the series. Preferred Stock or Other Securities may
be redeemable, or may be perpetual in duration. The dividend rate on
any series of Preferred Stock or Other Securities would not exceed at
the time of issuance the greater of: (1) 500 basis points over the
yield to maturity of a U.S. Treasury security having a remaining term
comparable to the term of such series, if issued at a fixed rate or, if
issued at a floating rate, 500 basis points over LIBOR for the relevant
interest rate period; and (2) a rate that is consistent with similar
securities of comparable credit quality and maturities. Dividends or
distributions on Preferred Stock or Other Securities may be made
subject to terms that allow the issuer to defer dividend payments for
specified periods.
Entergy Louisiana requests authority to acquire during the
Authorization Period all of the outstanding ownership interests of
special purpose subsidiaries (``SPEs''), through which Entergy
Louisiana would issue and sell Other Securities. Entergy Louisiana
would hold the ownership interests of an SPE directly or indirectly.
SPEs may be organized in any of the following corporate forms: A
limited liability company; a limited partnership; a business trust; or
any other domestic entity or structure considered advantageous by
Entergy Louisiana.
Entergy Louisiana also requests authority to: (1) Acquire financing
subsidiaries (``Financing Subsidiaries''), which would hold Entergy
Louisiana's ownership interests in SPEs and, as discussed below,
facilitate the issuance of Other Securities; and (2) acquire directly,
or through a Financing Subsidiary, all of the ownership interests of
one or more special purpose subsidiaries organized to hold certain
types of ownership interests in SPEs (``Partner Subs''). Partner Subs
would be created to hold: (1) Membership interests of an SPE where
applicable State law requires that a limited liability company have at
least two members; and (2) general partnership and/or limited
partnership interests in an SPE to ensure that an SPE has a limited
partner as may be required under applicable State law.
Entergy Louisiana, a Financing Subsidiary, and/or a Partner Sub
would acquire all of the ownership interests of an SPE for an amount
not less than the minimum required by applicable law.\8\ Entergy
Louisiana requests authority to issue and sell Other Securities either
directly or through SPEs. Entergy Louisiana would finance any indirect
issuance of Other Securities by directly, or through a Financing
Subsidiary, issuing and selling to an SPE unsecured subordinated
debentures, unsecured promissory notes or other unsecured debt
instruments (``Notes'') governed by an indenture or other document. In
turn, that SPE would use the Equity Contribution and proceeds from its
sale of Other Securities (collectively, ``Proceeds'') to purchase those
Notes. Alternatively, Entergy Louisiana and/or a Financing Subsidiary
would enter into a loan agreement or agreements with a SPE under which
the SPE would loan to Entergy Louisiana and/or a Financing Subsidiary
the Proceeds from time to time, and Entergy Louisiana and/or the
Financing Subsidiary would issue to the SPE Notes in an amount equal to
the Proceeds. The terms (e.g., interest rate, maturity, amortization,
prepayment terms, default provisions, etc.) of all Notes would
generally be designed to parallel the terms of the Other Securities to
which the Notes relate, and so the maximum principal amount of Notes
issued would not exceed the Proceeds. Correspondingly, Entergy
Louisiana requests authority to issue and sell Notes directly and
indirectly through a
[[Page 70268]]
Financing Subsidiary to the SPEs. Additionally, Entergy Louisiana
requests authority for the Financing Subsidiaries and/or SPEs to
transfer (directly or indirectly) the proceeds from sales of Other
Securities to Entergy Louisiana, resulting in the payment of dividends
out of capital to Entergy Louisiana.
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\8\ The aggregate amount of this investment by Entergy
Louisiana, a Financing Subsidiary, and/or a Partner Sub is referred
to here as the ``Equity Contribution.''
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Solely in connection with the issuance of Other Securities by a
SPE, Entergy Louisiana and the Financing Subsidiaries also request
authority to guarantee: (1) Payment of dividends or distributions on
Other Securities by the SPE if and to the extent the SPE has funds
legally available; (2) payments to the holders of such securities due
upon liquidation of the SPE or redemption of the Other Securities of
the SPE; and (3) certain additional amounts that may be payable in
respect of such Other Securities. Entergy Louisiana also requests
authority to provide credit support for any guaranty that is provided
by a Financing Subsidiary.
Entergy Louisiana also requests authority through the Authorization
Period to enter into arrangements (``Arrangements'') with one or more
government authorities (each, ``Issuer'') to issue and sell on behalf
of the company up to an aggregate amount of $420 million of tax exempt
bonds (``Tax-Exempt Bonds'') under one or more trust indentures
(collectively, ``Indentures'') between the Issuer(s) and one or more
trustees.\9\ Under the Arrangements, Entergy Louisiana would be
obligated to make payments sufficient to provide for payment by the
Issuer(s) of the principal or redemption price of, premium (if any) and
interest on, and other amounts owing with respect to the Tax-Exempt
Bonds, together with related expenses. Proceeds from the sale of the
Tax-Exempt Bonds would be applied to financing, or refinancing existing
tax-exempt bonds issued for the purpose of financing, certain Entergy
Louisiana pollution control facilities and/or sewage or solid waste
disposal facilities (``Facilities'').
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\9\ Arrangements would consist of leases, subleases, installment
sale agreements, or other agreements (collectively, ``Facilities
Agreement'') or, alternatively, one or more refunding agreements
(each, ``Refunding Agreement'')
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Under the Arrangements, Entergy Louisiana may be required to issue
and pledge first mortgage bonds (``Collateral Bonds'') as collateral
for the Tax-Exempt Bonds. Correspondingly, Entergy Louisiana requests
authority through the Authorization Period to issue and sell up to an
aggregate amount of $470 million of Collateral Bonds.\10\ Under the
terms of the Facilities Agreement, the Issuer(s) may purchase from
Entergy Louisiana the subject Facilities, and Entergy Louisiana would
then repurchase the Facilities from the Issuer(s). Correspondingly,
Entergy Louisiana requests authority through the Authorization to sell
the Facilities, which are utility assets.
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\10\ The proposed $470 million of Collateral Bonds is in
addition to the Aggregate Limit.
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Each series of Tax-Exempt Bonds would have a maturity ranging from
one to forty years. Additionally, Tax-Exempt Bonds may: (1) Be subject
to optional and/or mandatory redemption at par or at premiums above the
principal amount; (2) be subject to mandatory or optional sinking fund
provisions; (3) provide for reset of the coupon in accordance with a
remarketing arrangement; (4) be issued at fixed or floating rates of
interest; (5) be called from existing investors by a third party; (6)
be backed by a municipal bond insurance policy; (7) be supported by
credit support such as a bank letter of credit and reimbursement
agreement; and (8) may be supported by a subordinated lien on the
facilities related to the Tax-Exempt Bonds. The maturity dates,
interest rates, redemption and sinking fund provisions and conversion
features, if any, with respect to Tax-exempt Bonds of a particular
series, as well as any associated placement, underwriting or selling
agent fees, commissions and discounts, if any, will be established by
negotiation or competitive bidding. The interest rate on Tax-Exempt
Bonds would not exceed at the time of issuance the greater of: (1) 400
basis points over U.S. Treasury securities having a remaining term
comparable to the term of such series if issued at a fixed rate or, if
issued at a floating rate, 400 basis points over LIBOR for the relevant
interest rate period; and (2) a spread over U.S. Treasury securities or
LIBOR, as the case may be, that is consistent with similar securities
of comparable credit quality and maturities issued on behalf of
companies.
Entergy Louisiana represents that it would not issue any of the
proposed securities if, as a consequence of the issuance, the common
equity component of the company's capital structure would comprise less
than thirty percent of its total capitalization. Entergy Louisiana also
represents that it would not publicly issue any senior secured
indebtedness that is rated by any nationally recognized statistical
rating organization (``nationally recognized statistical rating
organization''), as that term is used in paragraphs (c)(2)(vi)(E), (F)
and (H) of rule 15c3-1 under the Securities Exchange Act of 1934,
unless the securities are rated at the investment grade level as
established by at least one such nationally recognized statistical
rating organization, except for: (1) New debt issued to refund or
redeem existing debt that, if voluntarily refunded is at a lower
effective after-tax cost of money, (b) debt issued to replace currently
maturing debt; or (2) privately-placed debt.
American Electric Power Service Corporation (70-10092)
American Electric Power Service Corporation (``AEP Service''), a
New York corporation, 1 Riverside Plaza, Columbus, Ohio 43215, and a
wholly owned subsidiary of American Electric Power Company Inc., a New
York corporation (``AEP'') and a registered holding company under the
Act, has filed an application-declaration (``Application'') under
sections 9(a), 10 and 11 of the Act and rule 54 under the Act.
AEP Service seeks an extension of the authority granted in previous
orders to license and sell to nonassociate entities specialized
computer programs and to provide support services to licensees and
entities that have purchased this software. The authority is sought for
the period through December 31, 2008 (``Authorization Period'').
By order dated August 10, 1990 (HCAR No. 35-25132), the Commission
authorized Central and South West Services Inc., a Delaware corporation
(``CSW Services'') to license and sell to nonassociate entities through
December 31, 1992, specialized computer programs and to provide support
services to licensees and entities that purchased the software. Support
services included program enhancements and problem resolution. CSW
Services was merged into AEP Service on December 31, 2000, as described
below. By order dated December 18, 1992 (HCAR No. 35-25132), the
Commission authorized CSW Services to license and sell to nonassociate
entities through December 31, 1994, specialized computer programs and
to provide support services to licensees and entities that purchased
such software. These support services were to be sold to nonassociate
entities for an amount not less than CSW Services' cost. By order dated
December 28, 1994 (HCAR No. 35-26206), the Commission extended the term
of the authority granted to CSW Services in the above described orders
and granted CSW Services the authority through December 31, 1997, to
make expenditures up to $1 million per calendar year and $250,000 per
project
[[Page 70269]]
to develop or change software for nonassociate entities, to market
software, services, and reserve computer capacity and to add up to ten
employees to support these activities. The order also authorized CSW
Services to sell reserve computer capacity (in amounts up to 50% of its
total capacity) and provide data management services to nonassociate
entities, largely customers of its associate public utility companies.
By order dated December 11, 1997 (HCAR No. 35-26795), the Commission
extended the authorization granted in the previous order through
December 31, 2002. By order dated June 14, 2000 (HCAR 35-27186), AEP
was authorized to acquire by merger all of the outstanding common stock
of Central and South West Corporation, a registered holding company and
the parent of CSW Services. By that order, CSW Services was merged into
AEP Service and the authority granted to CSW Services in HCAR No. 35-
26206 was vested in AEP Service.
AEP Service is party to a Software Distribution and License
Agreement with a corporation for the licensing and distribution and
support for a software system and method for managing special or
complex billing for larger utility customers or commodity/service
providers. As the authority granted in HCAR No. 35-26206 expires
December 31, 2002, AEP Service requests that the Commission authorize
it to:
(1) License and sell to nonassociates through December 31, 2008,
specialized computer programs;
(2) Provide support services to licensees and entities that
purchase its software, including program enhancements and problem
resolution;
(3) Make expenditures up to $1 million per calendar year and
$250,000 per project to develop or change software, to market software
and services;
(4) Sell reserve computer capacity (in amounts up to 50% of its
total capacity); and
(5) Provide data management services to nonassociate entities.
Entergy Louisiana, Inc. (70-10098)
Entergy Louisiana, Inc. (``ELI''), 4809 Jefferson Highway,
Jefferson, Louisiana 70121, a wholly owned electric public utility
subsidiary of Entergy Corporation (``Entergy''), a registered holding
company, has filed a declaration (``Declaration'') under section 12(c)
of the Act and rules 42, 46, 53, and 54 under the Act.
ELI states that it maintains a purchased power contract (``Power
Contract'') with Catalyst Old River Hydroelectric Limited Partnership.
Under Internal Revenue Code Section 475, ELI was able to elect to take
a mark-to-market tax deduction of approximately $2.316 billion in
association with the Power Contract and in conjunction as part of the
Entergy Corporation consolidated tax return for the tax year ending
December 31, 2001. This election is expected to provide a cash flow
benefit to ELI of approximately $700-$800 million during the fourth
quarter of 2002. As of June 30, 2002, ELI had retained earnings of
approximately $193 million. Subsequent to receipt of the cash flow
benefit, but prior to December 31, 2003, ELI proposes to make one or
more dividend payments to Entergy from capital surplus or to repurchase
up to 46,000,000 shares of ELI's common stock from Entergy, provided
that the aggregate of the dividends and common stock repurchases will
not exceed $350 million (``Transaction Limit''). ELI states that it
will pay book value for each share of common stock that it
repurchases.\11\
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\11\ Applicant defines book value per share as $7.75 per share
at June 30, 2002.
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ELI represents that, upon effecting any of the proposed dividend
payments or common stock repurchase transactions, its common equity
capital will not fall below thirty percent of its total consolidated
capitalization. ELI further represents that its cash position after any
payments or repurchase will be sufficient to allow it to continue to
meet its projected capital requirements and other obligations.
ELI further states that certain supplemental indentures under ELI's
April 1, 1944 Mortgage and Deed of Trust contain covenants (``Dividend
Covenants'') generally limiting the aggregate amount of dividends/
distributions on ELI's common stock and repurchases by ELI of its
common stock to the sum of (a) the aggregate amount credited to earned
surplus subsequent to the date of the applicable supplemental
indenture, (b) a specific dollar amount set forth in the applicable
supplemental indenture, and (c) ``such additional amounts as shall be
authorized or approved, upon application by [ELI], by the Securities
and Exchange Commission, or by any successor commission thereto, under
the Public Utility Holding Company Act of 1935.'' ELI states that it
anticipates that the aggregate amount of dividends or common stock
purchases proposed in this Declaration will reduce the amount available
to pay dividends under these Dividend Covenants by a like amount.
Accordingly, ELI requests that the Commission specifically authorize or
approve ``such additional amounts'' of dividends or common stock
purchases as may be necessary to implement the dividends and stock
repurchase activities up to the $350 million Transaction Limit for
purposes of each applicable Dividend Covenant.
For the Commission, by the Division of Investment Management,
pursuant to delegated authority.
Jill M. Peterson,
Assistant Secretary.
[FR Doc. 02-29592 Filed 11-20-02; 8:45 am]
BILLING CODE 8010-01-U