[Federal Register: August 2, 2005 (Volume 70, Number 147)]
[Notices]
[Page 44410-44413]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr02au05-75]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 35-28004]
Filings Under the Public Utility Holding Company Act of 1935, as
Amended (``Act'')
July 27, 2005.
Notice is hereby given that the following filing(s) has/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 August 22, 2005, to the Secretary, Securities and Exchange
Commission, 100 F Street, NE., Washington, DC 20549-9303, 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 August 22, 2005, the
application(s) and/or declaration(s), as filed or as amended, may be
granted and/or permitted to become effective.
PNM Resources, Inc., et al. (70-10280)
PNM Resources, Inc. (``PNM Resources''), a registered holding
company, PNMR Services Company (``Services''), a wholly-owned service
company subsidiary of PNM Resources, and Public Service Company of New
Mexico (``PNM''), a public utility company subsidiary of PNM Resources,
all located at Alvarado Square (MS-0920), Albuquerque, New Mexico 87158
and Texas-New Mexico Power Company (``TNMP''), an electric public
utility subsidiary of PNM Resources, 4100 International Plaza, Fort
Worth, Texas 76109 (collectively, ``Applicants''), have filed an
application-declaration (``Application'') under sections 9, 10 and
13(b) of the Act and rules 54, 88, 90, 91 and 93 under the Act.
I. Background
PNM Resources is a holding company that has recently registered
under the Act.\1\ Prior to June 6, 2005, PNM Resource's active
subsidiaries included PNM, Avistar Inc. (``Avistar''), a nonutility
company engaged in developing and marketing power system technologies,
and PNMR Development and Management Corporation (``PNMR Development''),
a company engaged in contract administration concerning the Luna Energy
power generation project.
[[Page 44411]]
On June 6, 2005, the Commission issued an order (the ``Acquisition
Order'') authorizing PNM Resources to acquire all of the voting
securities of TNP Enterprises, Inc. (``TNP Enterprises''), a public
utility holding company then-claiming exemption by rule 2 under the
Act.\2\ The Acquisition Order authorized Services to provide services
to TNP Enterprises and its active subsidiaries. The Acquisition Order
also authorized transferring shared services employees and their
functions from subsidiaries of TNP Enterprises to Services. As of June
6, 2005, the active subsidiaries of TNP Enterprises included TNMP, FCP
Enterprises, Inc., a Delaware corporation, and an intermediate
subsidiary parent of First Choice Power Special Purpose, L.P. (``First
Choice''), and First Choice, an energy-marketer.\3\ The recipients of
such services are referenced herein as ``Service Recipients.''
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\1\ PNM Resources filed a notice of registration under the Act
on December 30, 2004. In PNM Resources, Inc., Holding Co. Act
Release No. 27934 (December 30, 2004), PNM Resources committed to
file this application to qualify its service company under rule 88
within thirty days of registration; the Application was filed
January 28, 2005.
\2\ Holding Co. Act Release No. 27979 (June 1, 2005). TNP
Enterprises has since filed a notification of registration under the
Act.
\3\ First Choice is a Texas limited partnership and a bankruptcy
remote special purpose entity certificated retail electric (``REP'')
provider in Texas to which the original REP certificate of First
Choice Power was transferred pursuant to an Order of the Public
Utility Commission of Texas. A new certificate was granted to First
Choice Power, Inc., which is now First Choice Power, L.P., also a
subsidiary of TNP Enterprises and FCP Enterprises, Inc. These
entities are collectively called ``First Choice.''
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II. Current Requests
Applicants seek authorization for the continued operation of
Services and for it to continue to provide services, at cost in
accordance with the Commission's regulations, to PNM Resources and to
PNM Resources' other active subsidiaries: PNM, Avistar, Inc., PNMR
Development,\4\ TNMP, FCP Enterprises, Inc. and First Choice. These
services are to be provided in accordance with rules 90 and 91 under
the Act. As of January 1, 2005, PNM Resources ceased providing
services, which required personnel, to its affiliates and only retained
its lessor and sub-lessor interest in office and office-related
properties used in its subsidiaries operations. Services has entered
into an administrative services agreement between PNM Resources and
Services (``Services Agreement'').\5\ Services requests authorization
to provide services pursuant to rules 90 and 91 to authorized affiliate
Service Recipients on terms substantially identical to the Services
Agreement. PNM and Avistar have consented to the amendment and
assignment from PNM Resources to Services of their previously existing
service agreements so as to conform to the terms of the Services
Agreement and enable PNM Resources to cease rendering affiliate
services.
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\4\ PNMR Development is engaged in contract administration
concerning the Luna Energy power generation project. PNM Resources,
Holding Co. Act Release No. 27934 ( December 30, 2004) describes the
Luna energy project and authorizes the formation of subsidiaries for
project development purposes.
\5\ The only service function that will remain at PNM Resources
is the provision by it of access to offices to Services and PNM.
Otherwise, Services proposes to provide its Serviced Recipients with
all administrative, management, and support services as described in
the Application.
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Applicants request authority under section 13(b) of the Act for
TNMP to sublease and provide access to its existing offices and related
facilities owned or leased by it at cost to Services and to First
Choice. TNMP's leasehold interests were obtained by TNMP prior to the
acquisition of TNP Enterprises by PNM Resources. Before the
acquisition, TNMP provided certain shared services to First Choice and
TNPE Enterprises. Prior to the acquisition, employees occupied TNMP's
leased offices and related facilities which are leased from a non-
affiliate. In connection with the acquisition closing, the services
agreements between TNMP and First Choice and between TNMP and TNP
Enterprises were terminated, and the new services agreements initiated
with Services. The office space used by the discrete group of ``shared
services'' employees at the TNMP office building will continue to be
associated with those employees (who will not need to move physically),
and the cost associated with the space specific to First Choice will be
directly assigned to First Choice. In light of the transfer of shared
services employees from TNMP to Services, TNMP requests authority to
lease such offices and related facilities at cost to Services, and
authority for Services to provide access at cost to a portion of such
offices and related facilities to First Choice.
PNM Resources requests authority to continue its practice of
subleasing insubstantial space in its Alvarado Square office building
to certain non-affiliates. PNM Resources subleases insubstantial space
in its Alvarado Square office building to several non-affiliated
tenants that are engaged in businesses that pertain to the functions of
the complex.
Applicants further request that the Commission authorize reporting
under rule 93 that is consistent with the form of accounts required by
rate regulatory agencies, including Federal Power Act Form 1, to the
extent there is a conflict between such accounts and those prescribed
pursuant to 17 CFR part 256. Applicants are not requesting relief from
rule 94. Services' accounting and cost allocation methods and
procedures are structured so as to comply with the Commission's
standards for service companies in registered holding company systems.
Services' billing system will use the ``Uniform System of Accounts for
Mutual Service Companies,'' established by the Commission for holding
company systems. Services will utilize the chart of accounts specified
in the Federal Energy Regulatory Commission's (``FERC'') Uniform System
of Accounts for Public Utilities and Licensees (18 CFR 101).
Finally, PNM requests authority to provide generating plant
operating dispatch services to its affiliates at cost in compliance
with rules 90 and 91. Specifically, PNM requests authority to provide
joint dispatch services to its affiliates in connection with PNM's
generation resources and affiliate generation resources at cost. PNM
Resources' dispatch center supports its control area function and will
be predominantly used to support PNM plant dispatch and related
transactions. PNM provides electrical control services from much of New
Mexico, including the services area of PNM and TNMP in New Mexico.
III. Description of Services
Services' capitalization consists of 1,000 shares of common stock,
no par value. It is anticipated that Services will finance its business
through working capital, equipment and assets contributed by PNM
Resources and issuance of debt securities exempted under rule 52(b) to
associate companies or unaffiliated parties or otherwise authorized by
the Act, rules and Commission orders. PNM Resources has contributed to
Services certain physical property and contract rights as are necessary
for Services to succeed to the services function previously performed
by PNM Resources. PNM Resources has contributed $5 million cash to
Services.\6\ Approximately six hundred employees have transferred to
the payroll of Services from PNM Resources and its affiliates. In order
to provide substantially the same services as were previously provided
by PNM Resources, Services has entered into leases and subleases with
PNM Resources to occupy essentially the same office space that PNM
Resources used for corporate support services at rates established at
cost. Applicants state that this
[[Page 44412]]
arrangement avoids the transactional costs that would otherwise be
incurred in transferring property rights.
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\6\ PNM Resources further intends to loan funds to Services at
the effective cost of capital as authorized by rule 52(b).
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Applicants commit that no material change in the organization of
Services, the type and character of the companies to be serviced, the
methods of allocating cost to Service Recipients, or in the scope or
character of the services to be rendered subject to section 13 of the
Act, or any rule or order under the Act, shall be made unless and until
Services shall first have given the Commission written notice of the
proposed change not less than 60 days prior to the proposed
effectiveness of any such change. If, upon the receipt of any such
notice, the Commission shall notify Services within the 60-day period
that a question exists as to whether the proposed change is consistent
with the provisions of section 13 of the Act, or of any rule under the
Act, or Commission order, then the proposed change shall not become
effective unless and until Services shall have filed with the
Commission an appropriate declaration regarding such proposed change
and the Commission shall have permitted such declaration to become
effective.
Applicants have determined that the existing methods of allocating
costs presented in the Services Agreement are consistent with those
approved by the NMPRC on June 28, 2001. Under these cost allocations,
the costs for services will be assigned to the companies that cause or
benefit from those services. All charges for service shall be
distributed among Service Recipients, to the extent possible, based on
direct assignment. Costs which cannot be directly charged will be
allocated using an appropriate cost allocation methodology that will
take into account the cost causation of the type of service to be
allocated. The application of a specific allocation method will be
determined based upon principles of cost responsibility traditionally
applied in electric and gas utility accounting and regulation such that
each functional area supported by Services bears a fair share of fixed
costs in addition to paying the variable costs associated with specific
activities. Charges for all services provided by Services to its
Service Recipients under the Service Agreements will be on an ``at
cost'' basis as determined under rules 90 and 91 of the Act.
AGL Resources Inc. (70-10304)
AGL Resources Inc. (``AGL''), Ten Peachtree Place, Suite 1000,
Atlanta, Georgia 30309, a registered holding company has filed an
application-declaration under sections 6(a), 7, 9(a), 10, 11 and 12(b)
of the Act.
Generally, AGL requests authority to organize and finance one or
more direct or indirect subsidiaries to engage in certain gas- and
energy-related nonutility businesses in Canada, Mexico and/or the
United States.
I. Background
AGL distributes natural gas to more than 2.2 million end-use
customers through public-utility company subsidiaries organized in
Georgia (Atlanta Gas Light Company), Tennessee (Chattanooga Gas
Company), Virginia (Virginia Natural Gas Inc. and Virginia Gas
Distribution Company) and New Jersey (Pivotal Utility Holdings, Inc.).
Pivotal Utility Holdings owns and operates utility facilities in New
Jersey, Florida and Maryland through the following divisions:
Elizabethtown Gas, Florida City Gas, and Elkton Gas.
AGL is also involved in various energy- and gas-related nonutility
businesses, including: retail natural gas marketing to end-use
customers in Georgia; natural gas asset management and related
logistics activities for its own utilities as well as for other non-
affiliated companies; operation of high deliverability underground
natural gas storage; and construction and operation of
telecommunications conduit and fiber infrastructure within select
metropolitan areas. The common stock of AGL is listed on the New York
Stock Exchange.
Through various subsidiaries, Sequent, LLC (``Sequent''), an
indirect, wholly-owned subsidiary company of AGL, is engaged in the
optimization of natural gas assets, gas transportation and storage,
producer and peaking services and the wholesale marketing of natural
gas. Sequent's asset optimization business focuses on capturing value
from idle or underutilized natural gas assets, which are typically
amassed by companies via investments in, or contractual rights to,
natural gas transportation and storage facilities. Margins are
typically created in this business by participating in transactions
that balance the needs of varying markets and time horizons. Sequent
provides its customers with natural gas from the major producing
regions and market hubs primarily in the Eastern and Mid-Continental
United States. Sequent also purchases transportation and storage
capacity to meet its delivery requirements and customer obligations in
the marketplace. Sequent's customers benefit from its logistics
expertise and ability to deliver natural gas at prices that are
advantageous relative to the other alternatives available to its end-
use customers.
II. Requests for Authority
AGL requests authority to acquire interests in energy- and gas-
related nonutility businesses operating in Canada, Mexico and/or the
U.S (``Foreign Nonutility Businesses'').\7\ Typically, these
investments would be made through one or more direct or indirect
subsidiaries of Sequent and funded by acquisitions of equity and debt
securities of Foreign Nonutility Businesses, borrowings from AGL's
nonutility money pool by Foreign Nonutility Businesses, and guarantees.
AGL would limit its direct and indirect investments in Foreign
Nonutility Businesses to an aggregate amount not to exceed $300 million
(``Investment Limit'') in the form of equity, debt and guarantees,
including nonutility money pool borrowings, through September 31, 2008
(``Authorization Period''). AGL's public utility subsidiary companies
would not directly or indirectly acquire any Foreign Nonutility
Businesses and they would not provide funding for, extend credit to, or
guarantee the obligations of, Foreign Nonutility Businesses.
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\7\ Investments in gas- and energy-related businesses that may
be acquired under rule 58 would be subject to the investment limits
under that rule, not the limit described below.
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The specific nonutility businesses in which AGL seeks authorization
to invest include: (1) Energy management services and other energy
conservation related businesses; (2) the maintenance and monitoring of
utility equipment; (3) the provision of utility related or derived
software and services; (4) engineering, consulting and technical
services, operations and maintenance services; (5) brokering and
marketing of natural gas, electricity and other energy commodities and
providing incidental related services, such as fuel management, storage
and procurement; and (6) oil and gas exploration, development,
production, gathering, transportation, storage, processing and
marketing activities, and related or incidental activities. AGL does
not seek authority to acquire any assets that would cause any
subsidiary to be or become an ``electric-utility company'' or ``gas-
utility company,'' as those terms are defined in sections 2(a)(3) and
2(a)(4) of the Act.
AGL requests authority for all Foreign Nonutility Businesses to
participate as borrowers and lenders in the nonutility money pool
authorized by Commission order dated April 1, 2004 (Holding Co. Act
Release No. 27828). Participation in the nonutility money pool would
include unsecured short-term borrowing, contributing surplus funds,
[[Page 44413]]
and lending and extending credit to other nonutility money pool
participants.
For the Commission by the Division of Investment Management,
pursuant to delegated authority.
Margaret H. McFarland,
Deputy Secretary.
[FR Doc. E5-4110 Filed 8-1-05; 8:45 am]
BILLING CODE 8010-01-P