[Federal Register: December 26, 2002 (Volume 67, Number 248)]
[Notices]
[Page 78829-78831]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr26de02-115]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 35-27624]
Filings Under the Public Utility Holding Company Act of 1935, as
Amended (Act)
December 19, 2002.
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
[[Page 78830]]
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 January 13, 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 January 13, 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. (70-10096)
Xcel Energy Inc. (``Xcel''), a registered holding company, located
at 800 Nicollet Mall, Minneapolis, Minnesota 55402, has filed an
application-declaration (``Application'') under sections 6(a), 7,
12(c), 32 and 33 of the Act and rules 46, 53 and 54 under the Act.
By order dated August 22, 2000 (HCAR No. 27218) (the ``Prior
Financing Order''), the Commission authorized Xcel to, among other
things, (i) issue and sell common stock and long-term debt securities
during a period through September 30, 2003 (``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 \1\ and (ii)
issue and sell short-term debt in an aggregate principal amount of up
to $1.5 billion outstanding at any time. In this Application, Xcel
seeks to increase the aggregate amount of common stock and long-term
debt securities that it may issue during the Authorization Period from
the $2.0 billion authorized by the Prior Financing Order to $2.5
billion, as described below. Xcel also seeks to modify certain of the
conditions applicable to the financing authorizations granted in the
Prior Financing Order.\2\ In addition, Xcel seeks authorization of the
Commission to declare and pay dividends out of capital and surplus
during the Authorization Period in an aggregate amount not to exceed
$260 million.
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\1\ The authorization in the Prior Financing Order to issue up
to $2.0 billion of common stock and long-term debt was in addition
to the authorization in the Prior Financing Order for Xcel to issue
up to 30 million shares of its common stock under various employee
benefit and dividend reinvestment plans.
\2\ Except to the extent specifically provided below, all terms
and conditions of the Prior Financing Order would remain in effect
and all securities issued by Xcel under authorization granted by the
Commission in this proceeding would be subject to the terms and
conditions of the Prior Financing Order.
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Specifically, Xcel requests authority to issue and sell common
stock and/or long-term debt securities for the uses described below,
provided that the aggregate proceeds received during the Authorization
Period upon issuance of this common stock (exclusive of the issuance of
common stock specifically authorized in the Prior Financing Order in
respect of employee benefit plans and dividend reinvestment plan and
the issuance of common stock specifically authorized in the
Commission's order dated May 30, 2002 (HCAR No. 27533) (``NRG Order''))
\3\ and the aggregate principal amount of long-term debt issued and
outstanding at any one time during the Authorization Period, together
with any long-term debt or preferred securities issued by financing
subsidiaries established by Xcel under the Prior Financing Order, shall
not exceed $2.5 billion (``Aggregate Financing Limit'').\4\
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\3\ In the NRG Order, the Commission authorized Xcel to acquire
through an exchange offer and subsequent short-form merger the
outstanding publicly-held stock of its 74%-owned subsidiary, NRG
Energy, Inc. (``NRG''), and issue up to 33,394,564 shares of its
common stock for that purpose.
\4\ As of December 15, 2002, Xcel had issued $1,805 million,
consisting of $517.5 million of common stock, $1,230 million of
long-term debt outstanding, and a commitment to issue up to $57.5
million of long-term debt. These amounts would be counted against
the Aggregate Financing Limit.
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Xcel also requests certain modifications to the financing
conditions contained in the Prior Financing Order. Xcel requests that
the financing authority granted by the Commission in the Prior
Financing Order and the financing authority requested in this
Application be subject to the following general terms and conditions,
where appropriate:
(i) The securities would be issued at rates or prices and under
conditions negotiated or based upon, or otherwise determined by,
competitive capital markets;
(ii) The maturities of the debt securities would not exceed fifty
years;
(iii) Any long-term debt issued by Xcel (other than debt securities
not rated by the rating agencies) will, at the time of original
issuance, be rated at least investment grade by a nationally recognized
credit rating organization; provided that Xcel requests that the
Commission reserve jurisdiction over the issuance of long-term debt in
those circumstances where the security, upon issuance, would be unrated
or would be rated below investment grade;
(iv) 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,\5\ will be at least 30% of Xcel's consolidated total
capitalization; provided that in any event when Xcel does not satisfy
the 30% common equity ratio, Xcel may issue common stock under this
authorization; and
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\5\ Total capitalization is defined as the sum of common stock
equity, preferred stock, long-term debt (including current
maturities) and short-term debt.
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(v) the underwriting fees, commissions and other similar
remuneration paid in connection with the noncompetitive issuance of any
security issued by Xcel under this authorization will not exceed the
greater of (i) 5% of the principal or total amount of the securities
being issued; or (ii) 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.
Further, Xcel requests that the Commission authorize Xcel to engage
in the financing transactions authorized in the Prior Financing Order
and in the Commission's order dated March 7, 2002 (HCAR No. 27494) (the
``100% Order'')\6\ (together, ``Financing Orders'') and in this
Application at a time when Xcel does not satisfy the requirement that
Xcel maintain a ratio of common equity to total capitalization of at
least 30% (``Xcel 30% Test''). This requested authorization is
supplemental, and in addition, to the authorization granted by the
Commission on November 7, 2002 (HCAR No. 27597) (``Xcel 30%
Order'').\7\
Xcel now requests authorization to issue common stock at any time,
even if the Xcel 30% Test is not met. Xcel further requests that,
pending
[[Page 78831]]
completion of the record, the Commission reserve jurisdiction over the
authorization of Xcel and its subsidiaries to engage in any other
financing transactions authorized in the Financing Orders and in this
proceeding at any time that Xcel does not satisfy the Xcel 30% Test.
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\6\ The 100% Order authorized Xcel to use the proceeds of its
securities issuances to invest up to 100% of its ``consolidated
retained earnings,'' as defined in rule 53(a)(1)(i) under the Act,
in exempt wholesale generators (``EWGs'') and foreign utility
companies (``FUCOs''), as those terms are defined in sections 32 and
33 of the Act, respectively.
\7\ In the Xcel 30% Order, the Commission authorized Xcel to
engage in certain specified financing transactions through March 31,
2003, at a time when Xcel's common equity ratio was less than 30%,
provided that Xcel's common equity ratio was at least 24%.
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Subject to the limits described above, Xcel may sell common stock,
options, warrants, stock purchase rights and other equity-linked
securities or contracts to purchase common stock in any of the
following ways: (i) Through underwriters or dealers; (ii) through
agents; or (iii) directly to a limited number of purchasers or a single
purchaser. 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 or the rules under the
Act.
Also, subject to the limits described above, Xcel's long-term debt
will be unsecured and: (i) May be subordinated in right of payment to
other debt and other obligations of Xcel; (ii) may be convertible into
any other securities of Xcel; (iii) will have maturities ranging from
one to 50 years; (iv) 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; (v) may be entitled to mandatory or
optional sinking fund provisions; (vi) may provide for reset of the
interest rate pursuant to a remarketing arrangement; and (vii) 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 contemplates 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 these securities
without registration under the Securities Act of 1933, as amended (``33
Act''), in reliance upon one or more applicable exemptions from
registration under the 33 Act, 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.
The Prior Financing Order authorizes Xcel and/or its Subsidiaries
\8\ to form one or more financing subsidiaries to issue preferred
securities and/or long-term debt securities, the proceeds of which may
be loaned to Xcel. Applicants state that any issuance of any long-term
debt securities by a financing subsidiary established by Xcel would be
counted against the $2.5 billion Aggregate Financing Limit described
above.
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\8\ The term ``Subsidiaries'' is defined in the Prior Financing
Order, and includes each of Xcel's utility subsidiaries and
nonutility subsidiaries, as well as any future direct or indirect
nonutility 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
thereunder.
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Applicants state that the proceeds from these sales would be used
for purposes previously approved by the Commission in the Prior
Financing Order, 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 under rule 42 or a successor rule; (iii) financing
working capital requirements of Xcel and its Subsidiaries; and (iv)
other lawful general purposes. In addition, Applicants state that any
use of proceeds to make investments in any ``energy-related company,''
as defined in rule 58 under the Act, would be subject to the investment
limitation of that rule. Applicants further state that any use of
proceeds to make investments in any EWG or FUCO would be subject to the
investment limitation and other conditions set forth in the 100% Order
or under 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 that 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 under the Act.
Xcel further commits that at any time that the Xcel 30% Test is not
met, neither Xcel nor any Subsidiary of Xcel (other than NRG and NRG's
subsidiaries) will invest or commit to invest any funds in NRG and/or
any EWG or FUCO, except for any amount required to honor the
obligations of Xcel under the Support and Capital Subscription
Agreement dated May 29, 2002 between Xcel and NRG (the ``Support
Agreement'') and/or under any guaranty of the obligations of NRG or any
EWG or FUCO, which was a valid and binding obligation of Xcel before
the time that Xcel ceased to comply with the Xcel 30% Test and was
entered into by Xcel in conformity with the terms and conditions of the
Prior Financing Order and the 100% Order. Furthermore, Xcel commits
that during the time that Xcel is not in compliance with the Xcel 30%
Test, Xcel will not permit NRG to invest, or commit to invest, in any
new projects which qualify as EWGs or FUCOs; provided, however, NRG may
increase its investment in EWGs and FUCOs as a result of the
qualification of existing projects as EWGs or FUCOs and NRG may make
additional investments in an existing EWG or FUCO to the extent
necessary to complete any project or desirable to preserve or enhance
the value of NRG's investment in that project. Xcel requests that the
Commission reserve jurisdiction over any additional investment by Xcel
and its Subsidiaries in NRG and/or any EWG or FUCO during the period
that the Xcel 30% Test is not met.
Xcel also requests authorization for Xcel to declare and pay
dividends out of capital and unearned surplus in an aggregate amount
not to exceed $260 million during the Authorization Period. Xcel states
that it will not declare or pay any dividend out of capital or unearned
surplus in contravention of any law restricting the payment of
dividends. In addition, Xcel states that it will comply with the terms
of any credit agreements and indentures that restrict the amount and
timing of distributions by Xcel to its shareholders.
For the Commission, by the Division of Investment Management,
pursuant to delegated authority.
Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 02-32529 Filed 12-24-02; 8:45 am]
BILLING CODE 8010-01-P