[Federal Register Volume 63, Number 216 (Monday, November 9, 1998)]
[Notices]
[Pages 60422-60424]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-29972]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 35-26935]
Filings Under the Public Utility Holding Company Act of 1935, as
Amended (``Act'')
November 2, 1998.
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) and any amendment is/are available for public
inspection through the Commission's Office 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 November 27, 1998, to the Secretary, Securities and Exchange
Commission, Washington, D.C. 20549, and serve a copy on the relevant
applicant(s) and/or declarants(s) at the address(es) specified below.
Proof of service (by affidavit or, in case of an attorney at law, by
certificate) should be filed with the request. Any request for hearing
should identify specifically the issues of fact 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 November 27, 1998, the application(s) and/or
declaration(s), as filed or as amended, may be granted and/or permitted
to become effective.
Interstate Energy Corporation, et al. (70-9317)
Interestate Energy Corporation (``IEC''), a registered holding
company, Wisconsin Power & Light Company, a public utility subsidiary
company of IEC (``WPL''), Alliant Services Company (``Services''), a
subsidiary service company of IEC, Alliant Industries, Inc.,
(``Alliant'') a wholly owned subsidiary of IEC, Heartland Environmental
Holding Company, RMT, Inc., Heartland Energy Group, Inc., Heartland
Properties, Inc., Capital Square Financing Corporation, Cargill-Alliant
LLC, all nonutility subsidiary companies of Alliant, and Wisconsin
Power & Light Company, a public utility subsidiary company of IEC,
located at 222 West Washington Avenue, Madison, Wisconsin 53703,
Interstate Power Company (``Interstate Power''), a public utility
subsidiary company of IEC, 1000 Main Street, PO Box 769, Dubuque, Iowa
53004-0789, IES Utilities Inc. (``IES Utilities''), a public utility
subsidiary company of IEC, IES Transportation Inc., IEC Transfer
Services Inc., IES Investments Inc., IES Investco Inc., Village
Lakeshares Inc., Prairie Ridge Business Park, Iowa Land and Building
Company, IES International Inc., all indirect nonutility subsidiary
companies of Alliant, located at 200 First Street, SE, Cedar Rapids,
Iowa 52401, Whiting Petroleum Company, an indirect nonutility
subsidiary company of Alliant, Mile High Center, 1700 Broadway, Denver,
Colorado 80290, and IEI Barge Services Inc. and Cedar Rapids and Iowa
City Railroad Company, both indirect nonutility subsidiary companies of
Alliant, located at 2330 12th Street, SW, Cedar Rapids, Iowa 52404,
have filed an application-declaration under sections 6(a), 7, 9(a), 10,
12(b), 12(f), and 13(b) of the Act and rules 32, 33, 40, 43, 44, 45,
53, 54, 87(b)(1), 90, 91 and 93 under the Act.
IEC and Alliant propose through December 31, 2000, to form and fund
a Utility Money Pool (``Utility Pool'') and a Nonutility Money Pool
(``Nonutility Pool'') in aggregate amounts not to exceed $450 million
and $600 million respectively, through the issuance and sale of
commercial paper and bank borrowings.\1\ IEC also proposes to finance
the acquisition of foreign utility companies (``FUCOs'') and exempt
wholesale generators (``EWGs'') through the issuance of commercial
paper and bank borrowings in an amount not to exceed $300 million. IEC
represents that borrowings allocated to finance FUCO and EWG
acquisitions will not at any time exceed 50% of IEC's retained
earnings. Lastly, IEC proposes through December 31, 2000 to enter into
guarantee agreements (``Guarantee'') in an amount not to exceed $600
million.
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\1\ Rule 52 exempts Alliant's financial transactions from
Commission jurisdiction, however, this information is provided for
background purposes.
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The Utility Pool participants are WPL, IES Utilities, Interstate
Power and Services. The aggregate principal amount of borrowings
outstanding at any one time from the Utility Pool will be limited as
follows: WPL, $128 million; IES Utilities, $150 million; Interstate
Power, $72 million; and Services, $100 million.\2\ IEC states that
participants in the Utility Pool intend to use the funds for general
corporate purposes including interim funding of construction programs
until permanent financing can be arranged.
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\2\ The figure for WPL includes the maximum outstanding
borrowing for South Beloit Water, Gas & Electric Company, a wholly
owned subsidiary of WPL.
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IEC proposes to issue commercial paper that will have a commercial
rating of at least A-1 by Standard & Poor's (``S&P'') or at least P-1
by Moody's Investor Services (``Moody's''), and Alliant proposes to
issue commercial paper that will have a commercial rating of at least
A-2 by S&P or P-2 by Moody's. IEC proposes to issue and sell commercial
paper to fund the Utility Pool and invest in and acquire EWGs and
FUCOs. Alliant proposes to issue and sell commercial paper to fund the
Nonutility Pool.\3\
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\3\ The Nonutility Pool participants are all nonutility
subsidiary companies, except Services, included in this Application-
Declaration.
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The proceeds from the sale of the commercial paper that will be
used to fund the Nonutility Pool will be added to Alliant's treasury
funds in a separate nonutility account. The proceeds from the sale of
commercial paper intended to fund the Utility Pool and the investment
in and acquisition of FUCO's will be added to IEC's treasury funds in
separate utility and FUCO investment/acquisition accounts.
IEC and Alliant propose to issue commercial paper to dealers in the
form of book-entry unsecured promissory notes of varying denominations
not less than $100,000. Each note will mature not more than two-hundred
and seventy
[[Page 60423]]
days from the date of issue. The notes will be issued and sold by IEC
and Alliant directly to dealers at rates not to exceed the rate per
annum prevailing at the time of issuance for commercial paper of
comparable qualities and maturities sold by issuers thereof to
commercial paper dealers. No commission or fee will be payable in
connection with the issuance and sale of the commercial paper.
Applicants also request authorization for IEC and Alliant to sell
commercial paper directly to certain financial institutions. Sales of
commercial paper directly to these institutions will occur only if the
resulting cost of money would be equal to or less than that available
from dealer-placed commercial or bank borrowings. The terms of directly
placed notes would be similar to those of dealer-placed notes.
IEC and Alliant have also entered into credit agreements with banks
to support the issuance of commercial paper and in lieu of issuing
commercial paper may borrow directly from the banks if it is more cost
effective.\4\
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\4\ Alliant has two unsecured credit facilities totaling $600
million and IEC has a $150 million credit facility. All credit
facilities are available for direct borrowing or commercial paper
back-up.
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Borrowings from banks will be evidenced by promissory notes. Each
note, whether issued under a term loan or an open credit line, will be
for the principal amount available to be borrowed at the time from the
lending bank and be payable to the order of the bank; shall be dated
the date of the closing of the loan; shall bear interest at a rate no
higher than the effective cost of money for unsecured prime commercial
bank loans prevailing at the date of borrowing; and, shall be subject
to repayment by the borrower in whole at any time or in part from time
to time without premium or penalty.
The cost of compensating balances and fees paid to banks to
maintain credit lines will be initially allocated to the subsidiaries
of IEC on the basis of relative maximum outstanding short-term
borrowings for the prior calendar year from the particular money pool
in which the subsidiary participates, and the costs will be
retroactively reallocated at the end of each calendar year on the basis
of that year's actual relative maximum outstanding short-term borrowing
of each subsidiary in the particular pool. However, during the first
calendar year of operation of the money pools, the cost will initially
be allocated to the subsidiaries based on the relative maximum
borrowing authority of each subsidiary, and, similar to the
calculations to be made in subsequent years of operations, the costs
will be retroactively reallocated at the end of the first calendar year
on the basis of that year's actual relative maximum outstanding short
term borrowing of each subsidiary.
The funds available to the Utility Pool will be loaned by IEC on a
short-term basis to applicants that are public utility subsidiaries
and, to a lesser extent, will also come from the utility participants
themselves, to the extent permitted by state law, through the
investment of surplus funds into the Utility Pool.
Under the proposed terms of the respective money pools, from time
to time, short-term funds will be made available to participants of the
money pools if Services, as administrator of both money pools,
determines that it will result in a lower cost of borrowing consistent
with the individual borrowing needs and financial standing of the
participating subsidiaries.
Services will provide each money pool participant with periodic
activity and cash accounting reports that include, among other things,
reports of each activity, the daily balance of loans outstanding, and
the daily interest charged. No party will be required to effect a
borrowing through a money pool if it is determined that it could (and
had authority to) effect a borrowing at a lower cost directly from
banks.
The operation of the money pools is designed to match, on a daily
basis, the available cash and short-term borrowing requirements of the
participants. To the extent necessary, IEC and Alliant will use the
proceeds of external borrowings, up to Commission approved limits, to
accommodate the short-term requirements of participants. Requirements
satisfied by the money pools will be in the form of open account
advances and will not exceed the approved limits contained in the
financing program of IEC, Alliant and the other subsidiaries that may
be subsequently authorized by the Commission.
IEC and Alliant will participate in the money pools only insofar as
they have funds available for lending, either through internally
generated or from external sources. Under no circumstances will IEC or
Alliant be permitted to borrow funds available through the money pools.
If at any time there are funds remaining in the money pools after
satisfaction of the borrowing needs of the participating subsidiaries,
Services, as the manager of the money pools, will invest these funds
appropriately and consistent with applicable state and federal
regulations and allocate the earnings of the investments between or
among those applicants within each money pool according to the amount
of excess funds provided by each respective applicant. The return on
the funds loaned by a subsidiary into either of the money pools will
essentially be equal to the cost of borrowing from the money pools. The
applicable interest rate will be the average for the month of the CD
yield equivalent of the 30 day Federal Reserve ``AA'' Industrial
Commercial Paper Composite Rate (``Composite'') or, if no Composite
were established for that particular day, then the applicable rate
would be the Composite for the next preceding day for which the
Composite was established.
All borrowings from and contributions to the money pools will be
adequately documented and will be evidenced on the books of each
applicant that is borrowing or contributing funds through the money
pools. All loans will be payable on demand, may be prepaid by any
borrowing applicant at any time without premium or penalty and will be
subject to interest that shall be calculated and added to the
outstanding loan balance. These rates will be adjusted periodically and
any participating subsidiary that contributes funds to a money pool may
withdraw them at any time to satisfy its daily need for funds.
Services proposes to administer the Utility Pool on an ``at cost''
basis and to administer the Nonutility Pool on a basis other than cost.
Services will also provide cash management and banking services to the
subsidiaries of IEC that participate in the money pools.
IEC proposes to enter into guarantees, obtain letters of credit,
enter into guarantee-type expense agreements or otherwise provide
credit support to the obligations of its nonutility subsidiaries as may
be appropriate to enable those companies to carry on in the ordinary
course of their respective business in an aggregate principal amount
not to exceed $600 million outstanding at any one time.
Columbia Energy Group, et al. (70-9365)
Columbia Energy Group (``Columbia''), a registered holding company,
and its wholly owned subsidiary Columbia Electric Corporation
(``Columbia Electric''), both located at 13880 Dulles Corner Lane,
Herndon, Virginia 20171-4600, have filed an application-declaration
under sections 6(a), 7, 9(a), 10, 12(b) and 13(b) of the Act and rules
45, 54, 87(b)(1), 90, and 91 under the Act.
Columbia proposes to acquire indirectly, through Columbia Electric,
a 50% interest in a congeneration facility
[[Page 60424]]
(Project Gregory) to be constructed in Gregory, Texas and to issue
guarantees in an aggregate amount not to exceed $200 million. Project
Gregory is a 550 megawatt electric and steam production facility that,
once operational, will be a ``qualifying facility'' under the Public
Utility Regulatory Policies Act of 1978 and rules thereunder.
In June, 1998, Columbia Electric and LG&E Power Inc. (``LG&E'')
entered into an agreement to participate in the development,
construction, start-up, operation, maintenance, financing, and
ownership of Project Gregory. The assets of Project Gregory will be
held by Gregory Power Partners, L.P., a special purpose limited
partnership that will be jointly owned by subsidiaries of Columbia
Electric and LG&E. Columbia Electric Gregory General Corporation will
hold a 1% interest as a general partner of Gregory Power Partners, L.P.
and Columbia Electric Gregory Limited Corporation will hold a 49%
interest as a limited partner on behalf of Columbia Electric. LG&E
Power Gregory IV, Inc. will hold a 1% interest as a general partner and
LG&E Power Gregory I, Inc. will hold a 49% interest as a limited
partner on behalf of LG&E.
A second special purpose entity, Gregory Partners, LLC will provide
administrative and advisory services to Project Gregory. Columbia
Electric Gregory Remmington Corporation will hold a 1% interest as
member-manager, and Columbia Electric Gregory Member Corporation will
hold a 49% interest as a member of Gregory Partners, LLC on behalf of
Columbia Electric. LG&E Power Gregory II, Inc. will hold a 1% interest
as a member-manager, and LG&E Power Gregory III, Inc. will hold a 49%
interest as a member of Gregory Partners, LLC on behalf of LG&E.
For the Commission, by the Division of Investment Management,
under delegated authority.
Jonathan G. Katz,
Secretary.
[FR Doc. 98-29972 Filed 11-6-98; 8:45 am]
BILLING CODE 8010-01-M