[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]


-----------------------------------------------------------------------

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.
---------------------------------------------------------------------------

    \1\ Rule 52 exempts Alliant's financial transactions from 
Commission jurisdiction, however, this information is provided for 
background purposes.
---------------------------------------------------------------------------

    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.
---------------------------------------------------------------------------

    \2\ The figure for WPL includes the maximum outstanding 
borrowing for South Beloit Water, Gas & Electric Company, a wholly 
owned subsidiary of WPL.
---------------------------------------------------------------------------

    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\
---------------------------------------------------------------------------

    \3\ The Nonutility Pool participants are all nonutility 
subsidiary companies, except Services, included in this Application-
Declaration.
---------------------------------------------------------------------------

    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\
---------------------------------------------------------------------------

    \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.
---------------------------------------------------------------------------

    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