[Federal Register Volume 65, Number 136 (Friday, July 14, 2000)]
[Notices]
[Pages 43791-43794]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-17825]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 35-27197]


Filings Under the Public Utility Holding Company Act of 1935, As 
Amended (``Act'')

July 7, 2000.
    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

[[Page 43792]]

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 August 1, 2000, 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 August 1, 2000, the application(s) and/or 
declaration(s), as filed or as amended, may be granted and/or permitted 
to become effective.

Northeast Utilities, et al. (70-8875)

    Northeast Utilities (``NU''), a registered public utility holding 
company, located at 174 Brush Hill Avenue, West Springfield, 
Massachusetts 01090-0010, and its wholly-owned utility subsidiary 
companies, Western Massachusetts Electric Company, located at the same 
address, Holyoke Water Power Company, located at Canal Street, Holyoke, 
Massachusetts 01040, Public Service Company of New Hampshire and North 
Atlantic Energy Corporation, located at 1000 Elm Street, Manchester, 
New Hampshire 03015, and NU's nonutility subsidiaries, NU Enterprises, 
Inc., Northeast Generation Service Company, Northeast Generation 
Company, Select Energy, Inc., Mode 1 Communications, Inc., The Rocky 
River Realty Company (Ricky River), The Quinnehtuk Company 
(Quinnehtuk), and Northeast Nuclear Energy Company (NNEC), located at 
107 Selden Street, Berlin, Connecticut 06037, HEC Inc. (HEC), located 
at 24 Prime Parkway, Natick, Massachusetts 01760 (the ``Current Money 
Pool Participants''), Yankee Energy System, Inc. (``YES''), a wholly 
owned exempt subsidiary holding company of NU by order under section 
3(a)(1) of the Act, HCAR No. 26737 (January 31, 2000), a wholly owned 
gas utility subsidiary of YES, Yankee Gas Services Company (``Yankee 
Gas''), and YES' wholly owned nonutility subsidiaries, Yankee Energy 
Financial Services Company, NorConn Properties, Inc., Yankee Energy 
Services Company and R. M. Services, Inc. (``Yankee Subsidiaries''), 
located at 599 Research Parkway, Meriden, Connecticut 06450, have filed 
a post-effective amendment under sections 6(a), 7, 9(a), 10 and 12(b) 
of the Act and rules 43(a) and 45 under the Act.
    By order dated November 20, 1996 (HCAR No. 26612)(``November 
Order''), and supplemented February 11, 1997 (HCAR No. 26665), March 
25, 1997 (HCAR No. 26692), May 29, 1997 (HCAR No. 26721), January 16, 
1998 (HCAR No. 26816), May 13, 1999 (HCAR No. 7022) and November 17, 
1999 (HCAR No. 27103), the Current Money Pool Participants were 
authorized to engage in various financing and related transactions 
through December 31, 2000 (``Authorization Period''). The November 
Order also authorized, among other things, the Current Money Pool 
Participants to continue to engage in a NU system money pool 
arrangement (``Money Pool'') through the Authorization Period.
    Applicants now request the following:
    1. Authorization for YES and Yankee Subsidiaries to participate in 
the Money Pool
    2. Authorization for YES and Yankee Gas to incur short-term debt 
through the authorization period, subject to the limits and on the 
terms as described in the declaration.
    3. Elimination of any maximum limit on borrowings by nonutility 
subsidiaries from the Money Pool.
    4. Clarification of the inclusion of NNEC, Quinnehtuk, Rocky River 
and HEC as participants in the Money Pool

Entergy Corporation, et al. 70-9123

    Entergy Corporation (``Entergy''), a registered holding company, 
639 Loyola Avenue, New Orleans, Louisiana 70113, and its wholly owned 
nonutility subsidiary companies, Entergy Enterprises, Inc., Entergy 
Power, Inc., Entergy Global Power Operations Corporation, Entergy Power 
Operations U.S., Inc., Entergy Power Marketing Corp., all located at 
Parkwood Two Building, 10055 Grogan's Mill Road. The Woodlands, Texas 
77380, Entergy Nuclear, Inc., 1340 Echelon Parkway, Jackson, 
Mississippi 39213, and Entergy Operations Services, Inc., 110 James 
Parkway West, St. Rose Louisiana 70087 (collectively, ``Applicants'') 
have filed a post-effective amendment under sections 6(a), 7, and 12(b) 
of the Act and rules 45 and 54 under the Act to their application-
declaration that was previously authorized by Commission order dated 
June 22, 1999 (HCAR No. 27039) (``June 1999 Order'').
    The June 1999 Order authorized, among other things, Entergy and its 
Nonutility Companies \1\ to engage in a host of financing transactions 
including issuing guarantees or providing other forms of credit support 
or enhancements to, or for the benefit of the Nonutility Companies in 
an aggregate amount not to exceed $750 million through December 31, 
2002. Guarantees may take the form of Entergy or a Nonutility Company 
agreeing to guarantee, undertake reimbursement obligations, assume 
liabilities or other obligations in respect of or act as surety on 
bonds, letters of credit, evidences of indebtedness, equity 
commitments, power purchase agreements, leases, liquidated damages 
provisions, and other obligations undertaken by Entergy's Nonutility 
Companies (``Guarantees''). Under the June 1999 Order, Entergy 
currently has the capacity to issue Guarantees to or for the benefit of 
the Nonutility Companies in an aggregate principal amount of 
approximately $360 million.
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    \1\ For the purposes of the filing, exempt wholesale generators, 
as defined in section 32 of the Act, (``EWGs''), foreign utility 
companies, as defined in section 33 of the Act, (``FUCOs''), exempt 
telecommunications companies, energy-related companies as defined 
under rule 58 under the Act, operations and maintenance services 
subsidiaries, New Subsidiaries as defined in the June 1999 Order, 
and the Applicants other than Entergy, are referred to collectively 
as ``Nonutility Companies.''
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    The Applicants now propose to issue Guarantees to or for the 
benefit of Nonutility Companies from time to time through December 31, 
2005, in an aggregate principal amount not to exceed $2 billion at any 
one time outstanding. The terms and conditions of Guarantees would 
continue to be established at arm's length, based upon market 
conditions. Any Guarantees provided by Entergy to Exempt Projects 
(defined as EWGs and FUCOs) would be subject to the limitation on 
aggregate investment in EWGs and FUCOs set forth in rule 53(a), as 
modified by order of the Commission dated June 13, 2000 (HCAR No. 
27184). Specifically, Entergy would only issue Guarantees to Exempt 
Projects to the extent that the amount of any such Guarantee, when 
added to Entergy's aggregate investment in Exempt Projects, would not 
exceed 100% of Entergy's consolidated retained earnings. Any Guarantees 
provided to energy-related companies would be subject to the 
limitations on ``aggregate investment'' in energy-related companies set 
forth in rule 58.

Entergy Corp. (70-9189)

    Entergy Corporation (``Entergy''), 639 Loyola Avenue, New Orleans, 
Louisiana 70113, a registered holding company, has filed a declaration 
under sections

[[Page 43793]]

6(a) and 7 of the Act and rule 54 under the Act.
    By order dated July 10, 1998 (HCAR No. 26895), Entergy was 
authorized through December 31, 2008 to issue up to 12 million shares 
of its common stock (``Common Stock'') in connection with awards of 
Common Stock, options on the Common Stock (``Options''), and other 
equity awards granted under the 1998 Equity Ownership Plan of Entergy 
Corporation and Subsidiaries (``1998 Equity Plan''). Eligible key 
employees of Entergy and its subsidiaries and members of the board of 
directors of Entergy (``Board'') who are not otherwise employed by 
Entergy or its subsidiaries are eligible to participate in the 1998 
Equity Plan.
    More recently, the Board adopted the Equity Awards Plan (``2000 
Awards Plan'') as an amendment to the 1998 Equity Plan.\2\ In 
connection with the intended grant of awards under this plan, Entergy 
requests authority to issue, through December 31, 2010, up to 30 
million shares of Common Stock, Options, and equity awards in the form 
of phantom stock units (collectively, ``Awards'').
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    \2\ Entergy states that the 2000 Award Plan does not require 
shareholder approval.
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    A committee of the Board (``Committee'') will administer the 2000 
Awards Plan. Officers and other personnel of Entergy and its 
subsidiaries who are not subject to Section 16(b) of the Securities 
Exchange Act of 1934 (``Exchange Act'') \3\ and whom the Committee 
identifies as having significant responsibility for the continued 
growth, development and financial success of Entergy and its 
subsidiaries (``Key Employees'') are eligible to participate in the 
2000 Awards Plan.
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    \3\ Section 16(b) of the Exchange Act imposes restrictions on 
certain officers of corporations issuing stock. In general, under 
the statute, profits realized by the purchase and subsequent sale or 
sale and subsequent purchase of stock within six months, by an 
officer of the corporation issuing the stock is recoverable by the 
corporation. Under the 1998 Equity Plan, employees of Entergy or its 
subsidiaries were eligible for equity compensation even if they were 
subject to section 16(b) of the Exchange Act. Applicant states that 
stock options awarded under the 1998 Equity Plan to individuals who 
are not subject to section 16(b) of the Exchange Act will be 
rescinded and replaced with awards to be granted under the 2000 
Awards Plan. Entergy further states that shares of Common Stock 
underlying the rescinded options will become available for grant 
under the 1998 Equity Plan.
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    Entergy states that the 2000 Awards Plan was adopted to promote 
effective leadership of Entergy and its subsidiaries and to closely tie 
the interests of Key Employees with Entergy's stockholders.
    Shares of Common Stock awarded under the 2000 Awards Plan may be 
either authorized but unissued shares or shares acquired in the open 
market. Shares of Common Stock covered by awards which are not earned, 
or which are forfeited and Options which expire unexercised, will again 
be available for subsequent awards under the 2000 Awards Plan.

Northeast Utilities, et al. (70-9657)

    Northeast Utilities (``NU'') a registered holding company, 174 
Brush Hill Avenue, West Springfield, Massachusetts 01090, Yankee Energy 
System, Inc. (``YES''), 599 Research Parkway, Meriden, Connecticut 
06450, a wholly owned exempt subsidiary holding company of NU by order 
under section 3(a)(1)( of the Act, HCAR No. 26737 (January 31, 2000) 
(``January 2000 Order''), Yankee Gas Services Company, 599 Research 
Parkway, Meriden, Connecticut 06450, a wholly owned gas utility 
subsidiary of YES, YES' wholly owned nonutility subsidiaries, Yankee 
Financial Services Company, NorConn Properties, Inc., and Yankee Energy 
Services Company, all located at 599 Research Parkway, Meriden, 
Connecticut 06450, and R.M. Services, Inc., 639 Research Parkway, 
Meriden, Connecticut 06450, a wholly owned nonutility subsidiary of YES 
(collectively, ``Applicants'') have filed a declaration under section 
12(c) of the Act and rules 46 and 54 under the Act.
    In summary, Applicants request authority through June 30, 2000, 
(``Authorization Period'') for each of YES and its subsidiaries to 
repurchase stock from its parent and pay dividends out of capital and 
unearned surplus.
    The January 2000 Order, authorized NU to acquire all of YES' 
outstanding voting securities (``Merger''), which was accounted for 
using the ``purchase'' method of accounting. In accordance with the 
Commission's Staff Accounting Bulletin No. 54, Topic 5J, this method of 
accounting provides for the ``push down'' of the goodwill generated by 
the Merger (``Merger Goodwill'') from the holding company to 
subsidiaries and categorizes the amount pushed down in the 
subsidiaries' financial statements as additional paid-in-capital.
    Applicants estimate that Merger Goodwill will approximate $310 
million, resulting in an adverse impact on YES' annual income due to 
the required amortization of the Merger Goodwill. In addition, YES and 
its subsidiaries do not have recourse to retained earnings existing at 
the time of the Merger to pay out dividends, since the purchase 
accounting method requires that these retained earnings be 
recharacterized as additional paid-in-capital. Consequently, YES and 
its subsidiaries request authorization to pay dividends out of its 
additional paid-in-capital account up to the amount of its retained 
earnings just prior to the Merger and out of earnings before the 
amortization of the Merger Goodwill.
    In addition, each of YES and its subsidiaries request authority 
through the Authorization Period to repurchase its stock from its 
parent out of capital or unearned surplus. Applicants state that, after 
the Merger, and giving effect to the push down of the Merger Goodwill 
and its periodic amortization, YES' consolidated common equity as a 
percentage of total capital will be 67%.

Alliant Energy Corporation, et al. (70-9695)

    Alliant Energy Corporation (``Alliant''), a registered public 
utility holding company, and its wholly owned electric-utility 
subsidiary, Wisconsin Power & Light Company (``WPL'' and, together with 
Alliant, ``Applicants''), both located at 222 West Washington Avenue, 
Madison, Wisconsin 53703, have filed an application-declaration under 
sections 6(a), 7, 9(a), 10 and 12(b) of the Act and rules 456 and 54 
under the Act.
    Applicants request authority to: (1) Acquire a membership interest 
in American Transmission Company, LLC, a limited liability company to 
be organized under Wisconsin law (``Transco''); and (2) acquire a 
percentage of the capital stock of ATC Management Co. (``Manager''), a 
corporation to be formed under Wisconsin law. Alliant also requests 
authority, through September 30, 2001, to guarantee Transco's payment 
obligations under a credit agreement and to enter into a reimbursement 
agreement with Transco.
    In 1999, the state of Wisconsin enacted legislation that 
facilitates the formation of Transco as a single-purpose, for-profit 
transmission company (the ``Transco Legislation'').\4\ The Transco 
Legislation is intended to encourage public utility affiliates of 
Wisconsin holding companies, including WPL, to transfer ownership of 
their transmission assets to Transco.
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    \4\ 1999 Wisconsin Act 9, sections 2335tr to 2335uh (Assembly 
Amendment to Assembly Subcommittee Amendment 1 to 1999 Assembly Bill 
133).
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    Manager will manage Transco's assets and will also hold a portion 
of Transco's membership interests. All Transco participants will 
ultimately own direct or indirect interests in Transco and manager in 
proportion to the value of the transmission assets each participant 
contributes to Transco.

[[Page 43794]]

    In addition to Applicants, several other Wisconsin public utilities 
or public utility holding companies are expected to participate in 
Transco, including: South Beloit Water, Gas and Electric Company 
(``South Beloit''), a wholly owned subsidiary of WPL with transmission 
assets in Illinois; Wisconsin Energy Corporation (``WEC''), an exempt 
holding company which owns Wisconsin Electric Power Company; Wisconsin 
Public Power, Inc. (``WPPI''); WPS Resources Corporation (``WPS''), an 
exempt holding company which owns Wisconsin Public Service Corporation; 
and Madison Gas & Electric Company.\5\ Other transmission-owning 
utilities may, in the future, decide to become members of Transco.
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    \5\ As exempt public utility holding companies, WEC and WPS are 
required to file separate applications to request authority to 
participate in Transco under section 9(a)(2) of the Act.
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    WPL and the other participating Wisconsin utilities intend to 
contribute their transmission assets to Transco on or about January 1, 
2001 (the ``Operations Date'').\6\ In this Application the Applicants 
only seek authority to make initial contributions before the Operations 
Date to enable Transco and Manager to conduct start-up and other 
interim operations, including the leasing of office space and the 
negotiation of financing arrangements.
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    \6\ WPL and South Beloit will file a separate application 
seeking Commission authority to transfer their transmission assets 
to Transco, to engage in certain affiliated transactions, and to 
carry out other related activities.
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    Therefore, in this Application Applicants propose: (1) To acquire, 
for a consideration not to exceed $125,000, a membership interest in 
Transco; and (2) to acquire, for a consideration not to exceed 
$125,000, 100 shares of the capital stock to be issued by Manager, each 
of which will have a par value of $1.00. Depending on the number of 
initial members of Transco, it is expected that Applicants' interest in 
Transco and Manager will be between 35% and 40% of each entity. 
Transco's other participants will make similar initial contributions.
    Transco intends to enter into a credit agreement with Bank One, NA 
(the ``Credit Agreement'').\7\ The Credit Agreement will permit 
borrowings by Transco in an aggregate amount not to exceed $30 million, 
which Transco will use to fund its activities during its developmental 
stages. Notes issued under the Credit Agreement will bear interest at: 
(1) A rate equal to the sum of (a) the quotient of (i) the London 
Interbank Offered Rate in effect at the time, divided by (ii) one minus 
the reserve requirement imposed under Regulation D of the Board of 
Governors of the Federal Reserve System on Eurocurrency Liabilities, 
plus (b) 0.30% per annum; (2) the ``Alternate Base Rate'' (as defined 
below); or (3) a higher rate after default under the terms of the 
Credit Agreement. The ``Alternate Base Rate'' is defined as a rate of 
interest per annum equal to the higher of: (1) The Bank One, NA 
corporate base rate; or (2) the sum of the Federal Funds effective rate 
plus 0.5% per annum. Transco may also issue letters of credit (``L/
Cs'') under the Credit Agreement in a maximum aggregate face amount for 
all L/Cs outstanding of $12.5 million. The aggregate amount that 
Transco may borrow under the Credit Agreement will be reduced by the 
face amount of all outstanding L/Cs.
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    \7\ Additional lenders may participate in the Credit Agreement 
in the future through Bank One, NA's syndication.
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    Alliant propose to guarantee to the lenders the payment of all 
principal, interest and other fees incurred under the Credit Agreement 
(``the Guaranty agreement). The Guaranty Agreement is intended to 
operate only until Transco is able to establish its credit standing as 
an independent entity and will terminate when Transco receives an ``A-
'' or higher credit rating from Moody's Investors Services, Inc. 
Alliant states that the Guaranty Agreement will be non-recourse to 
Alliant's affiliates, and that the Guaranty Agreement will not, in any 
event, extend beyond September 30, 2001.
    Alliant also proposes to enter into a reimbursement agreement with 
Transco (the ``Reimbursement Agreement''), under which Transco will 
reimburse Alliant for all amounts it pays in respect of the Guaranty 
Agreement.\8\ It is expected that all other participants in Transco, 
except WPPI, will ultimately enter into one or more indemnification and 
reimbursement agreements with Alliant under which each participant will 
agree to reimburse Alliant for its payments under the Guaranty 
Agreement in proportion to each participant's ownership interest in 
Transco.
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    \8\ In the Reimbursement Agreement, Transco also agrees to 
obtain the release of Alliant from its obligations under the 
Guaranty agreement 60 days after transmission assets are transferred 
to Transco.

    For the Commission by the Division of Investment Management, 
pursuant to delegated authority.
Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 00-17825 Filed 7-13-00; 8:45 am]
BILLING CODE 8010-01-M