[Federal Register: January 31, 2003 (Volume 68, Number 21)]
[Notices]
[Page 5057-5058]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr31ja03-134]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 35-27641]
Filings Under the Public Utility Holding Company Act of 1935, as
Amended (``Act'')
January 27, 2003.
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 February 18, 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 February 18, 2003, the application(s) and/or
declaration(s), as filed or as amended, may be granted and/or permitted
to become effective.
CenterPoint Energy, Inc. et al. (70-9895)
CenterPoint Energy, Inc. (``CenterPoint''), 1111 Louisiana,
Houston, TX 77002, a registered public-utility holding company, and its
direct wholly owned registered holding company subsidiary, Utility
Holding, LLC, 200 West Ninth Street Plaza, Suite 411, Wilmington, DE
19801 (together, ``Applicants''), have filed a post-effective amendment
to their
[[Page 5058]]
application-declaration in this filing under sections 6(a) and 7 of the
Act and rules 44 and 54 under the Act.
CenterPoint is a registered public-utility holding company, created
on August 31, 2002, as part of a corporate restructuring of Reliant
Energy, Inc. On September 30, 2002, CenterPoint completed the
distribution (``Distribution'') to shareholders of the remaining stock
of Reliant Resources, Inc. (``Reliant Resources''). The Distribution
completed the separation from CenterPoint of the merchant power
generation and energy trading and marketing business of Reliant
Resources.
CenterPoint has three public-utility subsidiary companies that are
wholly owned (except as indicated below), that own and operate electric
generation plants, electric transmission and distribution facilities,
natural gas distribution facilities and natural gas pipelines.
CenterPoint Energy Houston Electric LLC (``T&D Utility'') engages in
the electric transmission and distribution business in a 5,000-square
mile area of the Texas Gulf Coast that includes Houston.
Texas Genco Holdings, Inc. (``Texas Genco'') is a section 3(a)(1)
exempt holding company that indirectly owns the Texas generating plants
formerly owned by the integrated electric utility that was a part of
Reliant Energy, Inc. (``Texas Genco Assets'').\1\
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\1\ On January 6, 2003, CenterPoint distributed to its
shareholders approximately 19% of the common stock of Texas Genco.
CenterPoint indirectly owns the remaining approximately 81% of the
common stock of Texas Genco.
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CenterPoint Energy Resources Corp. (``GasCo'') owns gas
distribution systems that together form one of the United States'
largest natural gas distribution operations in terms of customers
served. Through unincorporated divisions, GasCo provides natural gas
distribution services in Louisiana, Mississippi and Texas (Entex
Division), Arkansas, Louisiana, Oklahoma and Texas (Arkla Division) and
Minnesota (Minnegasco Division). Through wholly owned subsidiaries,
GasCo owns two interstate natural gas pipelines and gas gathering
systems and provides various ancillary services.
Utility Holding, LLC is a Delaware limited liability company and an
intermediate holding company that is registered under the Act. Utility
Holding, LLC directly holds approximately 81% of the outstanding common
stock of Texas Genco. Applicants state that Utility Holding, LLC is
otherwise a conduit entity formed solely to minimize tax liability.
For the nine months ended September 30, 2002, CenterPoint had
revenues of $5.8 billion and operating income of $1.1 billion. As of
September 30, 2002, CenterPoint had assets totaling $19.0 billion.
By order dated July 5, 2002, in this filing (``July Order''),\2\
the Commission authorized the formation of CenterPoint as a registered
holding company and approved various financing proposals. Among other
things, the July Order authorized CenterPoint to issue up to $5 billion
in long-term debt and $6 billion in short-term debt, subject to an
overall limit of no more than $6 billion in financings at any one time
outstanding through June 30, 2003 (``Authorization Period''). In the
July Order, CenterPoint committed that debt issued by it pursuant to
such authorization would be unsecured.
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\2\ Holding Co. Act Release No. 27548.
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CenterPoint seeks a modification of the July Order to permit
CenterPoint to issue and sell during the Authorization Period up to $4
billion of debt that is secured by the stock of Texas Genco, including
the assets and securities of its indirect subsidiary company, Texas
Genco, LP (the entity that directly owns the Texas Genco Assets), to
the extent permitted by and consistent with contractual restrictions
and applicable law.\3\
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\3\ Applicants anticipate that the term of the financing would
be from three to five years.
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The proceeds of this financing will be used to refinance the
existing indebtedness of CenterPoint. The proposed financing will
otherwise be subject to the terms and conditions as set forth in the
July Order.
CenterPoint also seeks authority to issue warrants or other stock
purchase rights, subject to the terms and conditions of the July Order.
CenterPoint states that it may be required to issue debt securities
convertible into common stock or debt securities with warrants or other
stock purchase rights. CenterPoint further states that the proceeds of
such financing will be used to refinance the existing indebtedness of
CenterPoint. CenterPoint notes that the July Order grants CenterPoint
the authority to issue convertible debt securities. CenterPoint now
seeks authority to issue warrants to purchase the common stock of
CenterPoint or other stock purchase rights subject to the terms and
conditions of the July Order.
On October 10, 2002, CenterPoint entered into a $3.85 billion, 364-
day credit facility (``CenterPoint Facility'') to replace a similar
facility that had expired. The CenterPoint Facility requires, among
other things, mandatory commitment reductions of $600 million each by
February 28, 2003, and June 30, 2003.
CenterPoint states that it is negotiating with its lenders to
extend the maturity date of the CenterPoint Facility into 2005, by
which time CenterPoint expects to have sold its generation assets and
recovered its stranded costs as provided by Texas law.\4\ CenterPoint
asserts that deteriorating market conditions have made it difficult to
refinance CenterPoint's debt on reasonable terms without providing some
security. CenterPoint states that with the ability to provide
collateral, an adequate financing arrangement may be implemented. As
set forth above, CenterPoint seeks authorization pursuant to sections
6(a) and 7 of the Act to issue and sell during the Authorization Period
up to $4 billion of debt that is secured by the stock of Texas Genco,
including the assets and securities of its indirect subsidiary company,
Texas Genco, LP.
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\4\ Reliant Resources has an option that may be exercised in
January 2004 to purchase all of the shares of Texas Genco common
stock then owned by CenterPoint. Applicants state that if Reliant
Resources does not exercise the option, CenterPoint plans to sell or
otherwise monetize its interest in Texas Genco. Applicants state
that proceeds from the sale, plus proceeds from the securitization
in 2004 or 2005 of stranded costs related to generating assets of
Texas Genco and generation related regulatory assets, are expected
to aggregate in excess of $5 billion.
For the Commission, by the Division of Investment Management,
pursuant to delegated authority.
Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 03-2255 Filed 1-30-03; 8:45 am]
BILLING CODE 8010-01-P