[Federal Register: March 17, 2005 (Volume 70, Number 51)]
[Notices]
[Page 13056-13058]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr17mr05-93]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 35-27951]
Filings Under the Public Utility Holding Company Act of 1935, as
Amended (``Act'')
March 11, 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 April 4, 2005, 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 April 4, 2005, the application(s) and/or
declaration(s), as filed or as amended, may be granted and/or permitted
to become effective.
American Transmission Company LLC, et al. (70-10289)
American Transmission Company LLC (``ATC''), an electric
transmission public-utility company under the Act, ATC Management Inc.
(``ATCMI''), a public-utility company and a public-utility holding
company exempt from registration under section 3(a)(1) of the Act by
rule 2, both located at N19 W23993 Ridgeview Parkway West, Waukesha, WI
53188, and Alliant Energy Corporation (``Alliant''), a registered
public-utility holding company and an indirect, partial owner of ATC
and ATCMI, located at 4902 N. Biltmore Lane, Madison, WI 53707
(together, ``Applicants''), have filed and application-declaration, as
amended (``Application''), with the Commission under sections 6(a) and
7 of the Act and rule 54.
Applicants seek up to $100 million in additional financing
authority for ATC to refinance or redeem short-term debt securities
previously issued and other general corporate purposes, in addition to
Applicants' current financing authority under the Commission's July 1,
2004 order (``Omnibus Financing Order''),\1\ in an aggregate amount not
to exceed $810 million at any one time outstanding, provided that the
aggregate amount of short-term debt issued will
[[Page 13057]]
not exceed $200 million at any one time outstanding.
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\1\ American Transmission Company, et al., Holding Co. Act
Release No. 27871.
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I. Background
ATC is an electric transmission company, organized as limited
liability company under Wisconsin law, with its sole purpose to plan,
construct, operate, maintain and expand transmission facilities, to
provide adequate and reliable transmission services and to support
effective competition in energy markets. ATC was formed after the State
of Wisconsin enacted legislation in 1999, encouraging, among other
things, formation of for-profit transmission companies (``Transco
Legislation'').\2\ ATC is operated and managed by ATCMI, a Wisconsin
corporation that also owns a nominal interest in ATC.\3\
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\2\ See generally, Alliant Energy Corporation, et al., Holding
Co. Act Release No. 27331 (Dec. 29, 2000). Applicants state that ATC
is obliged, under the Transco Legislation, to construct, operate,
maintain and expand its transmission facilities to provide adequate,
reliable transmission service under an open-access transmission
tariff. Applicants further state that ATC offers certain key
benefits to its owners, i.e., the elimination of rate ``pancaking''
among ATC members'' transmission systems; one-stop shopping for
transmission and wholesale distribution service over multiple
transmission systems; the reduction of operational barriers within
the ATC service area; and the transfer of ownership of the
transmission assets from vertically integrated utilities that will
facilitate functional unbundling, among other things. Applicants
state also that, effective February 1, 2002, ATC transferred
operational control of its facilities to the Midwest Independent
Transmission System Operator, Inc.
\3\ ATC, as a Wisconsin limited liability company, may elect to
be ``member-managed'' or ``manager-managed'' and ATC elected to be
managed by ATCMI. Applicants state that ATCMI is structured as a
corporation, rather than a limited liability company, to facilitate
access to the public markets, including any potential public
offering of ATCMI.
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ATC was formed, in January 2001, by five public-utility holding
companies (or certain of their subsidiaries) \4\ with service areas in
Wisconsin and adjacent areas in Illinois and Michigan. The five initial
members were (1) Alliant (through its subsidiaries Wisconsin Power and
Light Company (``WPL'') and South Beloit Water, Gas and Electric
Company (``South Beloit'')),\5\ (2) Wisconsin Energy Corp. (through its
subsidiaries Wisconsin Electric Power Company and Edison Sault Electric
Company),\6\ (3) Madison Gas and Electric Company,\7\ (4) WPS Resources
Corporation (through its subsidiary Wisconsin Public Service Corp.),\8\
and (5) WPPI.\9\ By December 31, 2003, ATC had 21 additional
investors.\10\
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\4\ Of the five companies, four are investor-owned companies and
they (either directly or through subsidiaries) transferred ownership
and operation of their transmission assets to ATC in exchange for an
ownership interest. The fifth, Wisconsin Public Power Inc.
(``WPPI''), a Wisconsin municipal electric company, contributed cash
in exchange for an equity interest in ATC proportional to its
members' load ratio share in Wisconsin.
\5\ See Alliant Energy Corp., note 2 above. WPL and South Beloit
are both subsidiary companies of Alliant. WPL contributed
transmission assets to ATC, but member units were issued for the
assets to WPL's subsidiary, WPL Transco LLC.
\6\ Wisconsin Energy Corp., Holding Co. Act Release No. 27329
(Dec. 28, 2000). Wisconsin Energy Corp., dba We Energies, is an
exempt holding company under the Act.
\7\ Madison Gas and Electric Co., Holding Co. Act Release No.
27326 (Dec. 28, 2000). Madison Gas and Electric Company is a public-
utility company and an exempt holding company under the Act.
\8\ WPS Resources Corporation, Holding Co. Act Release No. 27330
(Dec. 28, 2000). Wisconsin Public Service Corporation (``WPS'') is
an exempt public-utility company under the Act and a subsidiary of
WPS Resources Corporation, an exempt holding company under the Act.
WPS contributed transmission assets to ATC, but member units were
issued for the assets to WPS Investments, LLC.
\9\ Wisconsin Public Power Inc. is not subject to regulation by
reason of section 2(c) of the Act.
\10\ Eighteen more contributors invested transmission assets
and/or cash in ATC (including twelve municipal utilities, four
cooperatives, one public power entity and one investor-owned
utility) in June 2001. Two members joined ATC on December 31, 2002,
and a third member joined on December 31, 2003.
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Applicants' proposal, as noted above, is for certain financing
authority of up to $100 million in addition to a previous authorization
given by the Omnibus Financing Order, in which the Commission
authorized, generally, the following financing transactions through
June 30, 2005 (``Authorization Period''): \11\
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\11\ See note 1 above.
(i) ATC to issue debt securities in an aggregate amount not to
exceed $710 million at any one time outstanding during the
Authorization Period, provided that the aggregate amount of short-
term debt issued pursuant to the requested authority will not exceed
$200 million at any one time outstanding during the Authorization
Period;
(ii) ATC to issue member interests and ATCMI to issue equity
interests and preferred securities in an aggregate amount of $500
million at any one time outstanding during the Authorization Period,
provided that the aggregate amount of member interests and Class A
and Class B shares outstanding at any one time during the
Authorization Period will not exceed $393 million plus the value at
that time of the member interests and Class A and Class B shares
outstanding as of the date of the Omnibus Financing Order;
(iii) ATC and ATCMI to provide guarantees and other credit
support in an aggregate amount not to exceed $125 million
outstanding at any one time during the Authorization Period;
(iv) ATC and ATCMI to enter into various interest rate hedging
transactions; and
(v) ATC and ATCMI to undertake transactions to extend the terms
of or replace, refund or refinance existing obligations, as well as
the issuance of new obligations in exchange for existing
obligations.
II. The Current Financing Proposal
Applicants now seek up to $100 million in additional authority for
ATC in an aggregate amount not to exceed $810 million in long-term debt
securities at any one time outstanding, provided that the aggregate
amount of short-term debt issued will not exceed $200 million at any
one time outstanding. Applicants state that the proceeds from the sale
of securities in the proposed external financing transactions will be
used for the refinancing or redemption of short-term debt securities
previously issued by ATC and other general corporate purposes.
Applicants also propose that this additional authorization will be
subject to the restrictions specified in the Omnibus Financing
Order.\12\ Applicants state, among other things, (i) the maturity of
long-term debt will not exceed fifty years; (ii) any debt security
issued will have the designation, aggregate principal amount, interest
rate(s) (or methods of determining interest rates), terms of payment of
interest, collateral, redemption provisions, non-refunding provisions,
sinking fund terms, conversion or put terms and other terms and
conditions as ATC might determine at the time of issuance, provided
that, in no event, however, will the interest rate on long-term debt
exceed 500 basis points over the yield-to-maturity of a U.S. Treasury
security having a remaining term approximately equal to the average
life of the debt; and (iii) the underwriting fees, commissions or other
similar remuneration paid in connection with the non-competitive issue,
sale or distribution of securities under this Application will not
exceed 7% of the principal or total amount of the securities being
issued.
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\12\ See note 1 above.
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Applicants also represent that ATCMI and ATC each has and will
maintain common equity of at least 30% of its consolidated
capitalization (common equity, preferred stock, long-term and short-
term debt). Applicants further represent that no security may be issued
in reliance upon the requested order, unless: (i) The security to be
issued, if rated, is rated investment grade; (ii) all outstanding rated
securities of the issuer are rated investment grade; and (iii) all
outstanding rated securities of ATCMI are rated investment grade.
Applicants state that ATC will notify the Commission within five (5)
business days of becoming aware of any downgrade in the securities of
any registered holding company in the
[[Page 13058]]
Alliant system and that the notice shall include a statement of whether
the downgrade will affect ATC's access to capital markets. ATC is not a
wholly-owned subsidiary of Alliant. Applicants state that, unlike other
subsidiaries of registered holding companies, ATC is only partially
owned by Alliant and has a number of other equity investors that each
hold over 10% of ATC and ATCMI. Applicants further state that ATC
finances on its own balance sheet without credit support from Alliant
or any other upstream owners and that ATC maintains an arm's length
relationship with Alliant and is not privy to any ``inside''
information. All information regarding Alliant in this Application
comes from Alliant's public filings. For purposes of this condition, a
security will be considered rated investment grade if it is rated
investment grade by at least one 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.
Applicants request that the Commission reserve jurisdiction over the
issuance by ATC LLC of any 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)
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above are not satisfied.
For the Commission, by the Division of Investment Management,
pursuant to delegated authority.
Jill M. Peterson,
Assistant Secretary.
[FR Doc. E5-1166 Filed 3-16-05; 8:45 am]
BILLING CODE 8010-01-P