[Federal Register Volume 66, Number 33 (Friday, February 16, 2001)]
[Notices]
[Pages 10763-10765]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 01-3916]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 35-27343]
Filings Under the Public Utility Holding Company Act of 1935, as
Amended (``Act'')
February 9, 2001.
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 March 6, 2001, 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 March 6, 2001, the application(s) and/or
declaration(s), as filed or as amended, may be granted and/or permitted
to become effective.
CMS Energy Corporation (70-9843)
CMS Energy Corporation (``CMS Energy''), Fairlane Plaza South, 330
Town Center Drive, Suite 1100, Dearborn, Michigan 48126, a Michigan
public-utility holding company claiming exemption under section 3(a)(1)
of the Act by rule 2, has filed an application under sections 9(a)(2)
and 10 of the Act.
CMS Energy proposed to acquire indirectly, through Consumers Energy
Company (``Consumers Energy''), its public utility subsidiary, all of
the voting securities of Michigan Electric Transmission Company
(``Michigan Transco''), a currently inactive Michigan corporation. In
exchange for these voting securities, Consumers Energy intends to
transfer its ownership interest in certain transmission facilities
(``Transmission Assets'') to Michigan Transco (``Transfer''). The
Transmission Assets, which will be transferred at their actual
depreciated value, consist of: transmission lines (including towers,
poles, and conductors); transformers with voltage ratings of 120kV and
above; generation tie lines from the transmission grid to the point of
connection to the generator step-up transformers; associated voltage
control devices and power flow control devices; associated transmission
substations; and spare transmission equipment. Upon acquiring the
Transmission Assets, Michigan Transco will become a public-utility
company within the meaning of the Act.
CMS Energy states that the Transfer is designed to allow Consumers
Energy, in the future, either to sell its transmission system to an
unaffiliated third-party or transfer control of it to a regional
transmission organization. It is stated that the formation of Michigan
Transco is expected to create synergies that result in better regional
transmission service. Consumers Energy states that it intends to
continue to provide electric generation and distribution services to
retail customers.
After the Transfer, Consumers Energy will claim, and CMS Energy
will continue to claim, exemption from registration by rule 2, under
sections 3(a)(2) and 3(a)(1) of the Act, respectively.
Ameren Corporation, et al. (70-9805)
Ameren Corporation (``Ameren''), a registered holding company, and
its two wholly owned combination gas and electric utility subsidiaries,
Union Electric Company (``UE''), both located at 1901 Chouteau Avenue,
St. Louis, Missouri 63103, and Central Illinois Public Service Company
(``CIPS''), 607 East Adams Street, Springfield, Illinois 62739
(collectively, ``Applicants''), have filed an application-declaration
under sections 6(a), 7, 9(a), 10, 12(b), 12(c), 12(d) and 12(f) of the
Act and rules 43, 44, 45, 46 and 54 under the Act.
Ameren owns all of the issued and outstanding common stock of UE
and
[[Page 10764]]
CIPS. Together, UE and CIPS provide retail and wholesale electric
service to approximately 1.5 million customers and retail natural gas
service to approximately 300,000 customers in Missouri and Illinois. UE
owns and operates certain utility assets and provides electric service
and natural gas service in both Missouri and Illinois. Authorization is
sought for certain transactions (``Asset Transfer'') that would result
in the acquisition by CIPS of UE's electric transmission assets in
Illinois other than those associated with UE's Venice, Illinois
generating plant and UE's electric distribution assets in Illinois
(``T&D Assets''), and UE's retail gas distribution facilities in
Illinois (``Gas Facilities'' and together with T&D Assets, ``Acquired
Assets''). In connection with the Asset Transfer, CIPS would assume
certain obligations of UE that are associated with the Acquired Assets.
Applicants propose to transfer approximately one-half of the
Acquired Assets (``Transferred Assets'') from UE directly to CIPS in
return for a promissory note to be issued by CIPS in an amount equal to
approximately one-half of the total net book value of the Acquired
Assets, net of liabilities.\1\ The promissory note would have a market
rate of interest based on interest rates charged for generally
comparable unsecured five-year notes issued by companies whose credit
quality and bond ratings are comparable to those of CIPS. Applicants
state that the initial term of the promissory note would be five years.
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\1\ The estimated net book value of the Transferred Assets is
approximately $51 million.
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The remaining balance (approximately one-half) of the Acquired
Assets (``Dividend Assets'') and associated liabilities would be
transferred by a dividend from UE to Ameren and the subsequent
contribution of those assets and associated liabilities by Ameren to
CIPS.\2\ Upon the Asset Transfer, CIPS would assume responsibility for
serving electric and gas customers in Illinois that are currently
served by UE, and UE would no longer provide regulated utility services
in Illinois. The result of the Asset Transfer would be to consolidate
the utility operations of Ameren in Illinois in a single entity.
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\2\ The estimated net book value of the Dividend Assets is
approximately $51 million.
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Specifically, Applicants request authorization for: (1) UE to
transfer the Transferred Assets directly to CIPS; (2) UE to transfer
the Dividend Assets to Ameren through an in-kind dividend on its common
stock; (3) Ameren to contribute the Dividend Assets to CIPS by making a
capital contributions to CIPS; (4) CIPS to acquire the Acquired Assets;
(5) CIPS to assume certain liabilities of UE that are associated with
the Acquired Assets,\3\ and to issue a subordinated promissory note in
an amount equal to the book value of the Transferred Assets to UE as
payment for the Transferred Assets; and (6) UE to acquire and hold the
promissory note to be issued by CIPS.
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\3\ UE would also assign all related obligations to CIPS,
including the certificates of public convenience and necessity
granted by the Illinois Commerce Commission, environmental permits
and obligations, all municipal and county franchises, labor
agreements (as applicable), and any other relevant agreements that
exist as of the transfer date.
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Applicants note that separate filings have been made with the
Illinois Commerce Commission relating to transfer of the T&D Assets and
to transfer of the Gas Facilities. As a result, it is possible that the
transfer may not coincide. If this is the case, Applicants contemplate
the Asset Transfer would take place in two stages with the exchange of
two separate promissory notes. The promissory note associated with
transfer of the T&D Assets only would be approximately $46 million and
the dividend would be approximately $46 million. Conversely, the
promissory note associated with transfer of the Gas Facilities only
would be approximately $5 million and the related dividend would
approximately $5 million.
Applicants state that the Asset Transfer would simply regulation of
UE by eliminating regulatory jurisdiction of the Illinois Commerce
Commission over its activities. Applicants further state that by
transferring responsibility for serving certain retail electric service
customers in Illinois from UE to CIPS, the Asset Transfer also would
enable UE to meet its obligations to provide electric service in the
next few years without acquiring additional generation facilities and
alleviate UE's projected electric generation capacity deficit in a
manner beneficial to its Missouri retail electric service customers.
Applicants state that the combination of the utility assets of UE in
Illinois with the utility assets of CIPS would result in efficiencies
and economies through elimination of duplicative regulatory burdens,
and would produce savings for the benefit of the public, consumers and
investors of CIPS.
The Southern Company (70-8789)
The Southern Company (``Southern''), 270 Peachtree Street, N.W.,
Atlanta, Georgia 30303, a registered holding company, has filed a post-
effective amendment under sections 6(a) and 7 of the Act and rules 53
and 54 under the Act, to a previously filed application-declaration.
By order dated March 13, 1996 (HCAR No. 26489), Southern was
authorized to issue and sell, from time to time through April 1, 2001,
short-term and/or term-loan notes (together, ``Notes'') and/or
commercial paper (``Commercial Paper'') in an aggregate principal
amount not to exceed $2 billion outstanding at any time. At December
31, 2000, Southern had Commercial Paper and Notes evidencing bank
borrowings in an aggregate principal amount of $558,000,000. Southern
now proposes to extend its authority to issue the Notes and/or
Commercial Paper to April 1, 2008 (``Authorization Period''). The
aggregate principal amount of Notes and Commercial Paper, including the
amount presently outstanding, will not exceed $2 billion at any time
during the Authorization Period. All Notes and Commercial Paper are
unsecured.
Southern proposes to effect short-term and term-loan borrowings
from one or more lending institutions (``Banks''). These borrowings
will be evidenced by either Notes, dated as of the date of the
borrowings, and maturing not more than seven years after the date of
issue, or ``grid'' Notes, evidencing all outstanding borrowings from
each lender, dated as of the date of the initial borrowings, and
maturing in not more than seven years after the date of issue. Southern
proposes that it may provide that Notes may not be prepayable, or that
it may be prepaid with payment of a premium that is not in excess of
the stated interest rate on the Note to be prepaid. Borrowings from
Banks will be at: (1) The prevailing rate offered to corporate
borrowers of similar quality, which will not exceed the prime rate, (2)
the London Interbank Offered Rate plus up to three percent or (3) a
rate not to exceed the prime rate to be established by bids obtained
from lenders prior to a proposed borrowing.
Southern may pay a commitment fee based upon the unused portion of
each Bank's commitment. The total fee is determined by multiplying the
unused portion of the Bank's commitment by up to one-half of one
percent. Compensating balances may be used in lieu of fees to
compensate certain Banks.
Southern proposes to issue Commercial Paper in the form of
promissory notes with varying maturities not to exceed one year. These
maturities may be subject to extension to a final maturity not to
exceed 390 days. Actual maturities will be determined by market
conditions, the
[[Page 10765]]
effective interest costs and Southern's anticipated cash flow,
including the proceeds of other borrowings, at the time of issuance.
Commercial paper will be issued in denominations of not less than
$50,000 and, by their terms, will not be prepayable prior to maturity.
Southern proposes to sell the Commercial Paper directly or through
a dealer or dealers. The discount rate (or the interest rate),
including any commissions, will not be in excess of the discount rate
per annum (or equivalent interest rate) prevailing at the date of
issuance for Commercial Paper of comparable quality and maturity sold
to Commercial Paper dealers.
No commission or fee will be payable in connection with the
issuance and sale of Commercial Paper, except for a commission, payable
to the dealer, not to exceed one-eighth of one percent per annum in
respect of Commercial Paper sold through the dealer as principal. The
dealer will reoffer this Commercial Paper at a discount rate up to one-
eighth of one percent per annum less than the prevailing discount rate
to the issuer or at an equivalent cost if sold on an interest-bearing
basis.
Southern proposes to use the proceeds of the Notes and Commercial
Paper to (1) acquire the securities of companies in transactions either
authorized in separate proceedings or exempt from the Act, (2) fund
additional investments, directly or indirectly, in one or more exempt
wholesale generators (``EWGs''), as defined in section 32 of the Act,
foreign utility companies (``FUCOs''), as defined in section 33 of the
Act, or exempt telecommunications companies, as defined in section 34
of the Act, (3) provide bridge financing for other equity investments
in Southern's wholesale generation subsidiary or (4) to pay for
environmental and other contingencies.
Any short-term borrowings outstanding after March 31, 2008 will be
retired from internal sources of cash or the proceeds of financings
approved in separate filings, refinancings of EWG and FUCO indebtedness
on a non-recourse basis and other distributions from EWGs and FUCOs.
For the Commission, by the Division of Investment Management,
pursuant to delegated authority.
Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 01-3916 Filed 2-15-01; 8:45 am]
BILLING CODE 8010-01-M