[Federal Register: September 11, 2003 (Volume 68, Number 176)]
[Notices]
[Page 53619-53625]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr11se03-96]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 35-27720]
Filings Under the Public Utility Holding Company Act of 1935, as
Amended (``Act'')
September 5, 2003.
Notice is hereby given that the following filing(s) has/have been
made with the Commission under 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 September 29, 2003, 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 September 29, 2003 the application(s) and/or
declaration(s), as filed or as amended, may be granted and/or permitted
to become effective.
Xcel Energy, Inc., et al. (70-9635)
Xcel Energy Inc. (``Xcel''), 800 Nicollet Mall, Minneapolis,
Minnesota 55402, a holding company registered under the Act, and
certain subsidiaries,\1\
[[Page 53620]]
(collectively, ``Applicants'' \2\) have filed a post-effective
amendment to an application-declaration (``Application'') previously
filed with the Commission under sections 6(a), 7, 9(a), 10, 12(b),
12(c), 12(f), 32 and 33 of the Act and rules 43, 45, 46, 53 and 54
under the Act.
---------------------------------------------------------------------------
\1\ Xcel directly owns six utility subsidiaries (``Utility
Subsidiaries'') that serve electric and/or natural gas customers in
12 states. These six utility subsidiaries are Northern States Power
Company (``NSP-M''), a Minnesota corporation, Northern States Power
Company (``NSP-W''), a Wisconsin corporation, Public Service Company
of Colorado (``PSCo''), Southwestern Public Service Co. (``SPC''),
Black Mountain Gas Company (``Black Mountain''), and Cheyenne Light,
Fuel and Power Company (``Cheyenne''). Xcel's major nonutility
subsidiaries (``Nonutility Subsidiaries'') are NRG Energy, Inc.
(``NRG''), Seren Innovations, Inc., e prime, inc., and Eloigne
Company. For purposes of this Application, the term ``Subsidiaries''
includes each of Xcel's utility subsidiaries and nonutility
subsidiaries, except for NRG and its subsidiaries, as well as any
future direct or indirect nonutility subsidiaries (other than of NRG
or its subsidiaries) of Xcel whose equity securities may be acquired
in accordance with an order of the Commission or in accordance with
an exemption under the Act or the Commission's rules under the Act.
\2\ As stated above, for purposes of this Application, NRG and
its subsidiaries are not Applicants.
---------------------------------------------------------------------------
Applicants request authority to extend the time period in which to
engage in a variety of financing transactions and other related
proposals, as more fully discussed below, commencing on the effective
date of an order issued under this Application and ending June 30, 2005
(``Requested Authorization Period''). Applicants also request certain
revisions to the terms and conditions for intrasystem financings and
guarantees, including the implementation of a utility money pool, and
the terms and conditions relating to the formation and operation of
financing subsidiaries.
I. Background
By order dated August 22, 2000 (HCAR No. 27218) (``August 2000
Order''), the Commission authorized Xcel to, among other things, issue
and sell common stock and long-term debt securities during a period
through September 30, 2003 (``Original Authorization Period''),
provided that the aggregate proceeds of these issuances, together with
any long-term debt and preferred securities issued by financing
entities established by Xcel, did not exceed $2.0 billion.
In the August 2000 Order, the Commission reserved jurisdiction over
Xcel's request to use the proceeds of financings to make investments
in, exempt wholesale generators (``EWGs''), as defined in section 32 of
the Act, and foreign utility companies (``FUCOs''), as defined in
section 33 of the Act, in excess of $1.2 billion. By order dated March
7, 2002 (HCAR No. 27494) (``100% Order'', and together with the August
2000 Order, ``Original Financing Orders''), the Commission released
that reservation of jurisdiction. By order dated May 29, 2003 (HCAR No.
27681), the Commission authorized Xcel's request to declare and pay
dividends out of capital and unearned surplus in an aggregate amount
not to exceed $152 million. (``Supplemental Financing Order'' and,
together with the Original Financing Orders, the ``Financing Orders'')
Applicants, in the Application, request that the Commission release
its reservation of jurisdiction in the Supplemental Financing Order, so
as to authorize an increase in the aggregate amount of common stock and
long-term debt securities that Xcel can issue during the Requested
Authorization Period from $2.0 billion, as authorized in the August
2000 Order, to $2.5 billion. Applicants also request that the financing
authority granted by this Application be subject to certain general
terms and conditions.
A. Financing Orders
In the Original Financing Orders, the Commission authorized the
following transactions (``Financing Authority''):
[sbull] Xcel to issue and sell common stock and/or long-term debt
securities for the uses described, provided that the aggregate proceeds
received during the Original Authorization Period upon issuance of such
common stock (exclusive of the issuance of common stock specifically
authorized in the Original Financing Orders in respect of employee
benefit plans and dividend reinvestment plans,\3\ the issuance of
common stock specifically authorized in the Commission order dated May
30, 2002 (HCAR No. 27533),\4\ and the issuance of common stock in
connection with the reorganization of NRG \5\) and the aggregate
principal amount of long-term debt issued and outstanding at any one
time during the Original Authorization Period, together with any long-
term debt or preferred securities issued by Financing Subsidiaries (as
defined in the Original Financing Orders) established by Xcel, not to
exceed $2.0 billion;
---------------------------------------------------------------------------
\3\ Xcel was also authorized to issue and/or acquire an
additional 30 million shares of its common stock (subject to
adjustment for stock splits) from time to time through June 30, 2007
under various employee benefit plans and dividend reinstatement
plans. This Application does not request any amendment to this
authority.
\4\ In HCAR No. 27533 (May 30, 2002), the Commission authorized
Xcel to issue up to 33,394,564 shares of its common stock in
connection with the consummation of the exchange offer for the
publicly held shares of NRG common stock and upon subsequent
exercise of options issued by NRG or conversion of the corporate
units issued by NRG into shares of Xcel.
\5\ On May 14, 2003, NRG and certain of NRG's subsidiaries filed
voluntary petitions for bankruptcy under Chapter 11 of the U.S.
Bankruptcy Code in the U.S. Bankruptcy Court for the Southern
District of New York. Authorization for Xcel to issue common stock
in accordance with the terms of NRG's Plan of Reorganization is
being addressed in a separate application to the Commission under
the Act.
---------------------------------------------------------------------------
[sbull] Xcel to have outstanding at any one time short-term debt
with a maturity date not more than one year from the date of the
borrowing in an aggregate principal amount of up to $1.5 billion;
[sbull] Cheyenne and Black Mountain to each issue short-term debt
to non-associate lenders, when combined with borrowings from associate
lenders, not to exceed $40 million for each of Cheyenne and Black
Mountain;
[sbull] Xcel's Subsidiaries to borrow from each other and from
Xcel, and for Xcel and any Subsidiary to enter into guarantees, obtain
letters of credit, enter into expense agreements or otherwise provide
credit support with respect to the debt and other obligations of other
Subsidiaries (``Intrasystem Financings''), excluding transactions that
are exempt under rules 45(b) and 52, as applicable, in an aggregate
outstanding principal amount not to exceed $2.5 billion at any one
time, provided that any short-term loans to Cheyenne and Black Mountain
will be counted against their respective authorization for $40 million
of short-term debt and shall not apply against this limit on
Intrasystem Financings; \6\
---------------------------------------------------------------------------
\6\ Applicants do not request an extension of this authority,
but rather seek revised authority for intrasystem financings and
guarantees.
---------------------------------------------------------------------------
[sbull] Xcel and its Subsidiaries to enter into hedging
transactions with respect to existing and anticipated debt offerings,
subject to certain limitations and restrictions;
[sbull] Xcel and its Subsidiaries to acquire, directly or
indirectly, the equity securities of one or more of their Financing
Subsidiaries created specifically for the purpose of facilitating the
financing of the authorized and exempt activities of Xcel and the
Subsidiaries through the issuance of debt or preferred securities,
including but not limited to monthly income preferred securities, to
third parties, the loaning of the proceeds of such financings to Xcel
or such Subsidiaries, the guarantee of all or part of the obligations
of any Financing Subsidiary under any securities issued by the
Financing Subsidiary, and Xcel or a Subsidiary to enter into expense
arrangements in respect of the obligations of any such Financing
Subsidiary;\7\
---------------------------------------------------------------------------
\7\ Applicants do not request an extension of this authority,
but rather seek revised authority.
---------------------------------------------------------------------------
[sbull] Xcel and its Nonutility Subsidiaries to acquire the
securities of one or more companies (``Intermediate Subsidiaries''),
which would be organized exclusively for the purpose of acquiring,
holding and/or financing the acquisition of the securities of or other
interest in one or more other Nonutility Subsidiaries, provided that
Intermediate Securities may also engage in development activities and
administrative activities relating to such subsidiaries;
[sbull] Xcel to restructure its nonutility interests, including the
creation of new,
[[Page 53621]]
or the elimination of existing, Intermediate Subsidiaries, the
consolidation of Nonutility Subsidiaries engaged in similar businesses,
the spin-off of a portion of an existing business of a Nonutility
Subsidiary to another Nonutility Subsidiary, the re-incorporation of an
existing Nonutility Subsidiary in a different state, the transfer of
authority from one Nonutility Subsidiary to another or other similar
type arrangements, and to change the terms of any wholly-owned
Nonutility Subsidiary's authorized capital stock capitalization as
deemed appropriate by Xcel or other immediate parent company;
[sbull] Any Nonutility Subsidiary to pay dividends out of capital
and unearned surplus; and
[sbull] The use by Xcel of financings to invest in EWGs and FUCOs,
and to guarantee the obligations of EWGs and FUCOs, provided that
Xcel's aggregate investment at the time of such investment shall not
exceed 100% of its ``consolidated retained earnings,'' as defined in
rule 53(a)(1)(ii).
In the Supplemental Financing Order, the Commission authorized Xcel
to declare and pay two quarterly dividends out of capital and unearned
surplus on its common stock and its preferred stock, in an aggregate
amount of up to $152 million and the Commission reserved jurisdiction
over Xcel's request to increase the aggregate amount of common stock
and long-term debt securities that it may issue during the Original
Authorization Period from the $2.0 billion (authorized by the August
2000 Order) to $2.5 billion. Applicants request that the Commission
release that reserved jurisdiction.
II. Modifications to the Financing Parameters
Applicants request certain modifications to the financing
conditions contained in the Financing Orders. Applicants request that
the financing authority granted by the Application be subject to the
following general terms and conditions, where appropriate:
Effective Cost of Money. The effective cost of money on debt and
preferred securities issued to non-associate companies pursuant to
authorization in the Financing Orders and/or an order in this matter
will not exceed competitive market rates for securities of comparable
credit quality with similar terms and features.
Maturity of Debt. The maturity of authorized indebtedness will not
exceed 50 years.
Investment Grade Ratings. Applicants further represent that apart
from securities issued for the purpose of Intrasystem Financings, no
guarantees or other securities, other than common stock, may be issued
in reliance upon the authorization granted by the Commission pursuant
to the Application, unless (i) the security to be issued, if rated, is
rated investment grade; (ii) all outstanding securities of the issuer
(except in the case of Xcel, Xcel's preferred stock) that are rated are
rated investment grade; and (iii) all outstanding securities of Xcel
(except for Xcel's preferred stock) that are rated are rated investment
grade. For purposes of this provision, a security will be deemed to be
rated investment grade if it is rated investment grade by at least one
nationally recognized statistical rating organization. Xcel's preferred
stock is not rated investment grade. Applicants request that the
Commission reserve jurisdiction over the issuance by Xcel of preferred
stock and/or any other such securities that are rated below investment
grade. Applicants further request that the Commission reserve
jurisdiction over the issuance of any guarantee or other securities at
any time that the conditions, set forth in clauses (i) through (iii)
above, are not satisfied.
Capitalization Ratios. Xcel's common equity, as reflected on its
most recent Form 10-K or Form 10-Q and as adjusted to reflect
subsequent events that affect capitalization, will be at least 30% of
consolidated total capitalization (the ``Xcel 30% Test''); \8\ provided
that in any event when Xcel does not satisfy the Xcel 30% Test, Xcel
may issue common stock pursuant to this authorization. Similarly, the
common stock equity of each Utility Subsidiary will be at least 30% of
that Utility Subsidiary's total capitalization. Xcel requests that the
Commission reserve jurisdiction over Xcel's authority to engage in the
financing transactions authorized in the Financing Orders and in this
proceeding at a time when Xcel does not satisfy the Xcel 30% Test.
---------------------------------------------------------------------------
\8\ Total capitalization is the sum of common stock equity,
preferred stock, long-term debt (including current maturities) and
short-term debt.
---------------------------------------------------------------------------
Fees, Commissions and Other Remuneration. The underwriting fees,
commissions and other similar remuneration paid in connection with the
non-competitive issuance of any security issued by Xcel will not exceed
the greater of (A) 5% of the principal or total amount of the
securities being issued or (B) issuances expenses that are paid at the
time in respect of the issuance of securities having the same or
reasonably similar terms and conditions issued by similar companies of
reasonably comparable credit quality.
Applicants state that the proceeds from the financings authorized
by the Commission pursuant to the Application will be used for the same
purposes authorized in the August 2000 Order, which are general
corporate purposes, including (i) financing investments by and capital
expenditures of Xcel and its Subsidiaries, (ii) the repayment,
redemption, refunding or purchase by Xcel or any of its Subsidiaries of
securities issued by such companies without the need for prior
Commission approval pursuant to rule 42 or a successor rule, (iii)
financing working capital requirements of Xcel and its Subsidiaries,
and (iv) other lawful general purposes. In addition, any use of
proceeds to make investments in any ``energy-related company,'' as
defined in rule 58 under the Act, will be subject to the investment
limitation of such rule, and any use of proceeds to make investments in
any EWG or FUCO will be subject to the investment limitation and other
conditions in the 100% Order or any order amending or replacing the
100% Order. Xcel further commits that no financing proceeds will be
used to acquire the equity securities of any new subsidiary unless such
acquisition has been approved by the Commission in this proceeding or
in a separate proceeding or is in accordance with an available
exemption under the Act or the rules.
Xcel requests that the Commission release jurisdiction reserved in
the Supplemental Financing Order over Xcel's request to increase the
aggregate amount of common stock and long-term debt securities that it
may issue from $2.0 billion to $2.5 billion. Specifically, Xcel
requests authorization, subject to the financing parameters in the
Application, to issue and sell common stock and/or long-term debt
securities for the uses described herein, provided that the aggregate
proceeds received during the Requested Authorization Period upon
issuance of such common stock (exclusive of the issuance of common
stock specifically authorized in the Financing Orders with respect to
employee benefit plans and dividend reinvestment plans, the issuance of
common stock specifically authorized in the NRG Order and the issuance
of common stock pursuant to NRG's Plan of Reorganization) and the
aggregate principal amount of long-term debt issued and outstanding at
any one time during the Requested Authorization Period, together with
any long-term debt or preferred securities issued by
[[Page 53622]]
Financing Subsidiaries established by Xcel, shall not exceed $2.5
billion.
III. Common Stock and Long-Term Debt
Applicants propose that the issuance of common stock \9\ and long-
term debt of Xcel would be subject to the following general terms and
conditions:
---------------------------------------------------------------------------
\9\ Any common stock to be issued by Xcel under the settlement
with NRG and NRG's creditors is addressed in a separate application
to the Commission under the Act.
---------------------------------------------------------------------------
Common Stock. Subject to the limits described above and the other
conditions described in the Application, Xcel may issue and sell common
stock, options, warrants and stock purchase rights exercisable for
common stock, or other equity-linked securities or contracts to
purchase common stock. Such financings may be effected pursuant to
underwriting agreements of a type generally standard in the industry.
Public distributions may be pursuant to private negotiation with
underwriters, dealers or agents, as discussed below, or effected
through competitive bidding among underwriters. In addition, sales may
be made through private placements or other non-public offerings to one
or more persons. All such common stock sales will be at rates or prices
and under conditions negotiated or based upon, or otherwise determined
by, competitive capital markets.
Xcel may also issue common stock in public or privately-negotiated
transactions in exchange for the equity securities or assets of other
companies, provided that the acquisition of any such equity securities
or assets has been authorized in this proceeding or in a separate
proceeding or is exempt under the Act.
Long-Term Debt. The long-term debt to be issued by Xcel under the
authorization will be unsecured. Subject to the limits described above
and the other conditions described in the Application, Xcel's long-term
debt (a) may be subordinated in right of payment to other debt and
other obligations of Xcel, (b) may be convertible into any other
securities of Xcel, (c) will have maturities ranging from one to 50
years, (d) may be subject to optional and/or mandatory redemption, in
whole or in part, at par or at various premiums above the principal
amount thereof, (e) may be entitled to mandatory or optional sinking
fund provisions, (f) may provide for reset of the interest rate
pursuant to a remarketing arrangement, and (g) may be called from
existing investors by a third party. In addition, Xcel may have the
right from time to time to defer the payment of interest on all or a
portion of its long-term debt (which may be fixed or floating or
``multi-modal'', i.e., where the interest is periodically reset,
alternating between fixed and floating interest rates for each reset
period).
Xcel states that long-term debt securities would be issued and sold
directly to one or more purchasers in privately-negotiated transactions
or to one or more investment banking or underwriting firms or other
entities who would resell such securities without registration under
the Securities Act of 1933, as amended, in reliance upon one or more
applicable exemptions from registration, or to the public either (i)
through underwriters selected by negotiation or competitive bidding or
(ii) through selling agents acting either as agent or as principal for
resale to the public either directly or through dealers.
IV. Intrasystem Financings and Guarantees
Applicants request authority for Xcel to enter into guarantees,
obtain letters of credit, enter into expense agreements or otherwise
provide credit support (``Guarantees'') with respect to the obligations
of Utility Subsidiaries as may be appropriate to enable the Utility
Subsidiaries to carry on in the ordinary course of their respective
businesses, and Xcel and its Nonutility Subsidiaries to enter into
Guarantees with respect to the obligations of Nonutility Subsidiaries
as may be appropriate to enable such Nonutility Subsidiaries to carry
on in the ordinary course of their respective businesses; provided that
the aggregate principal amount of intrasystem financings and Guarantees
pursuant to this paragraph shall not exceed $1.0 billion outstanding at
any one time during the Requested Authorization Period. The $1.0
billion excludes any such Guarantees that are exempt pursuant to rules
45(b) and 52. The authorization requested will permit issuances of
guarantees in situations where the exemptions provided by rules 45(b)
and 52 are not applicable.
Xcel may charge each Subsidiary a fee for each Guarantee provided
on behalf of the Subsidiary that is determined by multiplying the
amount of any such guarantee by Xcel by the cost of obtaining the
liquidity necessary to perform the guarantee (for example, bank line
commitment fees or letter of credit fees) for the period of time the
guarantee remains outstanding. Nonutility Subsidiaries may also charge
each Nonutility Subsidiary a fee for each guarantee provided on its
behalf determined in the same manner as specified above. Applicants
also request authorization for Xcel to finance its Nonutility
Subsidiaries and its Nonutility Subsidiaries to finance other
Nonutility Subsidiaries in an aggregate principal amount outstanding at
any one time during the Requested Authorization Period of not to exceed
$400 million. This $400 million excludes any financings that are exempt
pursuant to rules 45(b) and 52.
In the case of loans by Xcel or a Nonutility Subsidiary to a
Nonutility Subsidiary, the company making the loan or extending the
credit may charge interest at the same effective rate of interest as
the daily weighted average effective rate of commercial paper,
revolving credit and/or other short-term borrowings of such lending
company, including an allocated share of commitment fees and related
expenses. If no such borrowings are outstanding, then the interest rate
shall be predicated on the Federal Funds' effective rate of interest as
quoted daily by the Federal Reserve Bank of New York. In the limited
circumstances where the Nonutility Subsidiary effecting the borrowing
is not wholly-owned by Xcel, directly or indirectly, authority is
requested under the Act for Xcel or a Nonutility Subsidiary to make the
loans to the subsidiaries at interest rates and maturities designed to
provide a return to the lending company of not less than its effective
cost of capital. If loans are made to a Nonutility Subsidiary which is
not wholly-owned, such Nonutility Subsidiary will not provide any
services to any associate Subsidiary except a company which meets one
of the conditions for rendering of services on a basis other than ``at
cost'', as authorized in HCAR No. 27212 (August 16, 2000).
V. Utility Money Pool
In order to provide intrasystem financing to the Utility
Subsidiaries, Applicants request authorization to operate a Utility
Money Pool. The Utility Money Pool would include some or all of the
Utility Subsidiaries as borrowers from and lenders to the pool. Xcel
would participate in the Utility Money Pool, but only as a lender to
the pool. Xcel Energy Services Inc. (``Xcel Services'') will act as the
administrator of the Utility Money Pool. To the extent not exempted by
rule 52, the Utility Subsidiaries request authorization to make
unsecured short-term borrowings from the Utility Money Pool and to
contribute surplus funds to the Utility Money Pool and to lend and
extend credit to (and acquire promissory notes from) one another
through the Utility Money Pool. Xcel requests authorization to
contribute surplus funds and to lend and extend credit to the Utility
[[Page 53623]]
Subsidiaries through the Utility Money Pool. No loans through the
Utility Money Pool would be made to, and no borrowings through the
Utility Money Pool would be made by, Xcel.
Applicants believe that the cost of the proposed borrowings through
the Utility Money Pool will generally be more favorable to the
borrowing participants than the comparable cost of external short-term
borrowings, and the yield to the participants contributing available
funds to the Utility Money Pool will generally be higher than the
typical yield on short-term investments.
Under the proposed terms of the Utility Money Pool, short-term
funds would be available from the following sources for short-term
loans to each of the Utility Subsidiaries from time to time: (1)
Surplus funds in the treasuries of Utility Money Pool participants, (2)
surplus funds in the treasury of Xcel, and (3) proceeds from bank
borrowings by Utility Money Pool participants or the sale of commercial
paper by the Utility Money Pool participants for loan to the Utility
Money Pool (``External Funds''). The determination of whether a Utility
Money Pool participant at any time has surplus funds to lend to the
Utility Money Pool or shall borrow funds from the Utility Money Pool
would be made by the participant's chief financial officer or
treasurer, or by a designee thereof, on the basis of cash flow
projections and other relevant factors, in that participant's sole
discretion.
Utility Money Pool participants that borrow would borrow pro rata
from each company that lends, in the proportion that the total amount
loaned by each lending company bears to the total amount then loaned
through the Utility Money Pool. On any day when more than one fund
source (e.g., surplus treasury funds of Xcel and other Utility Money
Pool participants (``Internal Funds'') and External Funds), with
different rates of interest, is used to fund loans through the Utility
Money Pool, each borrower would borrow pro rata from each such fund
source in the Utility Money Pool in the same proportion that the amount
of funds provided by that fund source bears to the total amount of
short-term funds available to the Utility Money Pool.
Borrowings from the Utility Money Pool would require authorization
by the borrower's chief financial officer or treasurer, or by a
designee. No party would be required to effect a borrowing through the
Utility Money Pool if it is determined that it could (and had authority
to) effect a borrowing at lower cost directly from banks or through the
sale of its own commercial paper. The cost of compensating balances, if
any, and fees paid to banks to maintain credit lines and accounts by
Utility Money Pool participants lending External Funds to the Utility
Money Pool would initially be paid by the participant maintaining such
line. A portion of these costs--or all of such costs in the event a
Utility Money Pool participant establishes a line of credit solely for
purposes of lending any External Funds obtained thereby into the
Utility Money Pool--would be retroactively allocated every month to the
companies borrowing these External Funds through the Utility Money Pool
in proportion to their respective daily outstanding borrowings of such
External Funds.
If only Internal Funds make up the funds available in the Utility
Money Pool, the interest rate applicable and payable to or by the
Utility Money Pool participants for all loans of such Internal Funds
outstanding on any day will be the rates for high-grade unsecured 30-
day commercial paper sold through dealers by major corporations as
quoted in The Wall Street Journal on the last business day of the prior
calendar month. If only External Funds comprise the funds available in
the Utility Money Pool, the interest rate applicable to loans of such
External Funds would be equal to the lending company's cost for such
External Funds (or, if more than one Utility Money Pool participant had
made available External Funds on such day, the applicable interest rate
would be a composite rate equal to the weighted average of the cost
incurred by the respective Utility Money Pool participants for such
External Funds).
In cases where both Internal Funds and External Funds are
concurrently borrowed through the Utility Money Pool, the rate
applicable to all loans comprised of such ``blended'' funds would be a
composite rate equal to the weighted average of (a) the cost of all
Internal Funds contributed by Utility Money Pool participants (as
determined pursuant to the second-preceding paragraph above) and (b)
the cost of all such External Funds (as determined pursuant to the
immediately preceding paragraph, above).
Funds not required by the Utility Money Pool to make loans (with
the exception of funds required to satisfy the Utility Money Pool's
liquidity requirements) would ordinarily be invested in one or more
short-term investments, including: (i) Interest-bearing accounts with
banks; (ii) obligations issued or guaranteed by the U.S. government
and/or its agencies and instrumentalities, including obligations under
repurchase agreements; (iii) obligations issued or guaranteed by any
state or political subdivision, provided that such obligations are
rated not less than ``A'' by a nationally recognized rating agency;
(iv) commercial paper rated not less than ``A-1'' or ``P-1'' or their
equivalent by a nationally recognized rating agency; (v) money market
funds; (vi) bank certificates of deposit; (vii) Eurodollar funds; and
(viii) such other investments as are permitted by section 9(c) of the
Act and rule 40 under the Act.
The interest income and investment income earned on loans and
investments of surplus funds would be allocated among the participants
in the Utility Money Pool in accordance with the proportion each
participant's contribution of funds bears to the total amount of funds
in the Utility Money Pool. Each Applicant receiving a loan through the
Utility Money Pool would be required to repay the principal amount of
such loan, together with all interest accrued, on demand. All loans
made through the Utility Money Pool may be prepaid by the borrower
without premium or penalty. Operation of the Utility Money Pool,
including record keeping and coordination of loans, will be handled by
Xcel Services under the authority of the appropriate officers of the
participating companies. Xcel Services will administer the Utility
Money Pool on an ``at cost'' basis.
Proceeds from the Utility Money Pool may be used by each Utility
Subsidiary (i) for the interim financing of its construction and
capital expenditure programs, (ii) for its working capital needs, (iii)
for the repayment, redemption or refinancing of its debt and preferred
stock, (iv) to meet unexpected contingencies, payment and timing
differences and cash requirements, and (v) to otherwise finance its own
business and for other lawful general corporate purposes. The Utility
Subsidiaries request authority to borrow up to an amount at any one
time outstanding from the Utility Money Pool as set forth below:
------------------------------------------------------------------------
Money pool
Utility subsidiary limit
(million)
------------------------------------------------------------------------
NSP-M...................................................... $250
NSP-W...................................................... 100
PSCo....................................................... 250
SPS........................................................ 100
Cheyenne................................................... 40
Black Mountain............................................. 40
------------------------------------------------------------------------
Loans to Cheyenne and Black Mountain through the money pool will be
counted against their respective $40 million limits applicable to
short-term debt.
[[Page 53624]]
VI. Financing Subsidiaries
For the Requested Authorization Period, Applicants request that the
terms and conditions in respect of Financing Subsidiaries be modified.
Applicants request authority for Xcel and its Subsidiaries to acquire,
directly or indirectly, the equity securities of one or more
corporations, trusts, partnerships or other entities (``Financing
Subsidiaries'') created specifically for the purpose of facilitating
the financing of the authorized and exempt activities (including exempt
and authorized acquisitions) of Xcel and the Subsidiaries through the
issuance of debt or preferred securities, including but not limited to
monthly income preferred securities, to third parties and the loaning
of the proceeds of such financings to Xcel or such Subsidiaries. The
proceeds of any securities issuance by a Financing Subsidiary would be
loaned, dividended or otherwise transferred to Xcel or the Subsidiary
that established such Financing Subsidiary. The proceeds of any
securities issuances by a Financing Subsidiary would count against any
applicable authorization limit of Xcel or a Subsidiary establishing
such Financing Subsidiary as though Xcel or the Subsidiary had
undertaken the issuance directly. Xcel or the Subsidiary that
established such Financing Subsidiary, as applicable, may, if required,
guarantee all or part of the obligations of such Financing Subsidiary
under any securities issued by the Financing Subsidiary. Xcel or the
Subsidiary that established such Financing Subsidiary, as applicable,
also may enter into expense arrangements in respect of the obligations
of such Financing Subsidiary. However, the amount of any such guarantee
by Xcel or a Subsidiary would not be counted against the authorization
limit in respect of intra-system financings and guarantees discussed
above.
Any such long-term debt or preferred securities would be issued
with terms and features negotiated or based upon, or otherwise
determined by, competitive capital markets, and in any event consistent
with the general terms set forth above for Xcel. Any such preferred
securities would have dividend rates or methods of determining the
same, redemption provisions, conversion or put terms and other terms
and conditions as Xcel may determine at the time of issuance. In
addition, all issuances of preferred securities will be at rates or
prices, and under conditions negotiated pursuant to, based upon, or
otherwise determined by competitive capital markets.
Georgia Power Company (70-10137)
Georgia Power Company (``Georgia Power''), a wholly owned utility
subsidiary of the Southern Company (``Southern''), a registered holding
company, 241 Ralph McGill Boulevard, NE., Atlanta, Georgia, 30308, has
filed a declaration under section 12(b) of the Act and rules 45 and 54
under the Act.
Georgia Power owns 50% of the outstanding common stock of Southern
Electric Generating Company (``SEGCO''), an indirect utility subsidiary
of Southern. Alabama Power Company (``Alabama Power''), a wholly owned
utility subsidiary of Southern, owns the remaining outstanding common
stock of SEGCO. SEGCO owns units one through four of the 1,000 megawatt
Ernest C. Gaston steam plant near Wilsonville, Alabama. The plant sells
all of its energy and capacity to Georgia Power and Alabama Power in
proportion to their ownership interest in the plant. Alabama Power acts
as SEGCO's agent in the operation of the plant.
On May 22, 2003 SEGCO issued its Series A 4.40% Senior Notes due
May 15, 2013 in an aggregate principal amount of $50 million. As part
of the financing, Alabama Power guaranteed repayment of the SEGCO debt.
Georgia Power proposes to agree by letter to reimburse Alabama Power
pro rata (based on Georgia Power's ownership of the outstanding equity
securities of SEGCO as of the date the payment is due) for any payments
made by Alabama Power under its guarantee. The letter will provide that
the commitment of Georgia Power will terminate when Georgia Power
ceases to own an interest in SEGCO.
Unitil Corporation (70-10161)
Unitil Corporation (``Unitil''), a registered holding company under
the Act, 6 Liberty Lane West, Hampton, New Hampshire 03842,
(``Applicant'') has filed an application/declaration (``Application'')
with the Commission under sections 6(a) and 7 of the Act.
Unitil requests authority to issue and sell for cash prior to
January 31, 2004 up to 717,600 additional shares of its common stock,
no par value (the ``Additional Common Stock''). Unitil has an
authorized total of 8,000,000 shares of common stock, of which
4,753,630 shares were issued and outstanding as of June 30, 2003.
Unitil contemplates that the Additional Common Stock would be
issued and sold to the public through underwriters, who would acquire
the Additional Common Stock for their own accounts and may resell the
shares of the Additional Common Stock in one or more transactions,
including negotiated transactions, either at a fixed public offering
price or at varying prices determined at the times of sale. The
offering is expected to be effected in accordance with an underwriting
agreement of a type generally standard in the industry and Unitil may
grant the underwriters a ``green shoe'' option to purchase additional
shares at the same price then offered solely for the purpose of
covering over-allotments (provided that the total number of shares
offered initially, together with the number of shares issued in
accordance with any ``green shoe'' option would not exceed the number
of shares authorized for issuance by any order granted under the
Application). Applicant states that it is also possible that Unitil
would sell the Additional Common Stock through dealers or agents or
directly to a limited number of purchasers or a single purchaser.
The aggregate price of the Additional Common Stock being sold
through any underwriter or dealer would be calculated based on either
the specified selling price to the public or the closing price of the
common stock on the day the offering is announced. Public distributions
may be in accordance with private negotiation with underwriters,
dealers or agents as discussed above or effected through competitive
bidding among underwriters. In addition, sales may be made through
private placements or other non-public offerings to one or more
persons. The sale of the shares of Additional Common Stock would be at
rates or prices and under conditions negotiated or based upon, or
otherwise determined by, competitive capital markets. The underwriting
fees, commissions or other similar remuneration paid in connection with
the issue, sale or distribution of the Additional Common Stock in
accordance with the Application (not including any original issue
discount) would not exceed 7% of the principal or total amount of the
Additional Common Stock being issued.
Unitil states that it intends to use the net proceeds of the
offering (after deduction of fees, commissions and expenses) (i) to
make cash capital contributions to its subsidiaries, including, without
limitation, its public utility subsidiaries, Fitchburg Gas and Electric
Light Company (``Fitchburg'') and Unitil Energy Systems, Inc. (``Unitil
Energy''), in accordance with rule 45(a)(4) of the Act; (ii) to repay
its outstanding short-term indebtedness; and (iii) for other general
corporate
[[Page 53625]]
purposes consistent with the requirements of the Act, including to meet
working capital needs. Unitil Energy and Fitchburg are expected, in
turn, to use any funds contributed by Unitil to repay outstanding
short-term indebtedness incurred for additions, extensions and
betterments to their respective property, plant and equipment and to
finance future expenditures for additions, extensions and betterments
to property, plant and equipment. Unitil represents that no proceeds
from any offering authorized in any order of the Commission issued on
the Application will be used (i) to acquire any exempt wholesale
generators or foreign utility companies, as those terms are defined in
sections 32 and 33 of the Act, respectively; or (ii) to acquire or form
a new subsidiary unless that financing is consummated in accordance
with an order of the Commission or an available exemption under the
Act.
For the Commission, by the Division of Investment Management,
under delegated authority.
Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 03-23152 Filed 9-10-03; 8:45 am]
BILLING CODE 8010-01-U