[Federal Register Volume 66, Number 47 (Friday, March 9, 2001)]
[Notices]
[Pages 14225-14230]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 01-5794]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 35-27352]


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

March 2, 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 27, 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 27, 2001, the application(s) and/or 
declaration(s), as filed or as amended, may be granted and/or permitted 
to become effective.

Dominion Resources, Inc. (70-9555)

    Dominion Resources, Inc., (``DRI''), a public utility holding 
company registered under the Act, 120 Tredegar Street, Richmond VA 
23219, has filed, on behalf of itself and its subsidiaries, and 
application-declaration (``Application'') under sections 6(a), 7, 9(a), 
10, 12(b), 12(c), 12(f), 32 and 33 of the Act and rules 42, 45, 46, 53 
and 54.
    The Application seeks to update and supersede the authorization and 
approval for ongoing financial activities granted to DRI and its 
subsidiaries in a previous Commission order \1\ (``Initial Financing 
Order'') for the period through December 31, 2005 (``Authorization 
Date'').
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    \1\ HCAR No. 27112 (Dec. 15, 1999).
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    DRI's principal utility subsidiaries are: (1) Virginia Electric and 
Power Company (``Virginia Power''), a regulated public utility engaged 
in the generation, transmission and distribution of electric energy in 
Virginia and northeastern North Carolina, (2) The Peoples Natural Gas 
Company (``Peoples''), a regulated public utility engaged in the 
distribution of natural gas in Pennsylvania, (3) The East Ohio Gas 
Company (``East Ohio''), a regulated public utility engaged in the 
distribution of natural gas in Ohio, and (4) Hope Gas, Inc. (``Hope''), 
a regulated public utility engaged in the distribution of natural gas 
in West Virginia. Virginia Power is a direct subsidiary of DRI. 
Peoples, East Ohio and Hope are each direct subsidiaries of 
Consolidated Natural Gas Company (``CNG''), a direct subsidiary of DRI 
that is also a registered holding company under the Act.
    DRI's nonutility activities are conducted through: (1) Dominion 
Energy, Inc., which, through its direct and indirect subsidiaries, is 
active in the competitive electric power generation business and in the 
development, exploration and operation of natural gas and oil reserves; 
(2) direct and indirect subsidiaries of Virginia Power that are engaged 
in acquiring raw materials for the fabrication of nuclear fuel for use 
at power stations which are owned and operated by Virginia Power, 
providing telecommunications services utilizing fiber optic lines which 
are owned by Virginia Power, fuel procurement for Virginia Power, 
energy marketing and nuclear consulting services; and (3) direct and 
indirect subsidiaries of CNG which are engaged in all phases of the 
natural gas business other than retail distribution including 
transmission, storage and exploration and production. As of the date of 
this Application, DRI has another significant non-utility subsidiary, 
Dominion Capital, Inc.

[[Page 14226]]

(``DCI'' and, together with its subsidiaries, the ``DCI Companies''), a 
diversified financial services company with several subsidiaries 
engaged in commercial lending, merchant banking and residential 
lending. By order dated December 15, 1999 (HCAR No. 27113), the 
Commission approved the merger of DRI and CNG (``Merger''). That order 
required DRI to dispose of its interest in the DCI Companies (other 
than certain interests in specified independent power projects) no 
later than January 28, 2003. DRI and all of its subsidiaries are 
referred to as the ``DRI System.''
    In summary, DRI requests authority through December 31, 2005, for 
DRI to: (1) Increase its total capitalization (excluding retained 
earnings and accumulated other comprehensive income) by $6 billion by 
way of the issuance of equity, preferred and unsecured debt securities, 
other than guarantees, and, with respect to the issuance of preferred 
securities, as authorized by the Initial Financing Order, to restate 
and clarify DRI's authority to form special purpose financing 
subsidiaries and to guarantee the obligations of such special purpose 
financing subsidiaries as described below; (2) increase the aggregate 
amount of the guarantee authorization for DRI to $9.6 billion for all 
subsidiaries of DRI; (3) make investments in exempt wholesale 
generators as defined in section 32 of the Act (``EWGs'') and foreign 
utility companies as defined in section 33 of the Act (``FUCOs'') in an 
aggregate amount not to exceed the sum of 100% of DRI's consolidated 
retained earnings plus $8 billion (``EWG/FUCO Investment Limit''); \2\ 
and (4) extend through the Authorization Date the period of time during 
which DRI may amend, renew, extend, replace and otherwise modify any 
securities, credit facilities, financing arrangements, indebtedness and 
similar obligations (including obligations incurred to finance the 
Merger) and any guarantees, financing arrangements and other credit 
support in respect of subsidiaries of DRI (collectively, the ``Existing 
Obligations''), existing as of the date of the Commission's order 
approving the Application. The Application also seeks Commission 
authorization for: (1) An extension through the Authorization Date of 
the financing authority granted the subsidiaries of DRI in the Initial 
Financing Order, subject to all of the other representations, covenants 
and restrictions set forth in the Initial Financing Application, except 
to the extent expressly modified in the Application; (2) DRI and its 
subsidiaries to enter into the Tax Allocation Agreement described 
below, and (3) DRI to manage and exploit DRI System non-utility real 
estate as described below.
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    \2\ Excluded from that total, however, is the amount of DRI's 
Aggregate Investment in Restructured Assets. As used in the 
Application, ``Restructured Assets'' denotes generation assets owned 
by Virginia Power that become owned, directly or indirectly, by any 
subsidiary of DRI that is qualified as an EWG. ``Aggregate 
Investment in Restructured Assets'' means the net book value of 
those generation assets immediately prior to their designation as 
Restructured Assets.
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    DRI proposes that the requested financings will be subject to the 
following limitations (collectively, ``Financing Conditions''), unless 
otherwise indicated: (1) Except as expressly modified by the 
Application, all terms, conditions and restrictions set forth in the 
application made in respect of the Initial Financing Order will remain 
applicable; (2) DRI will not issue any additional debt securities to 
finance those investments if upon its original issuance DRI's senior 
debt obligations are not rated investment grade by at least two of the 
major ratings agencies, viz., Standard & Poor's Corporation (``S&P''), 
Fitch Investor Service (``Fitch''), or Moody's Investor Service 
(``Moody's''); (3) common equity will constitute at least 30 percent of 
DRI's consolidated capitalization (based upon the financial statements 
included in DRI's most recent quarterly report on Form 10-Q or annual 
report on Form 10-K); (4) the interest rate on any series of debt 
security with a maturity of one year or less will not exceed the 
greater of (a) 300 basis points over the comparable term London 
Interbank Offered Rate, or (b) a rate that is consistent with similar 
securities of comparable credit quality and maturities issued by other 
companies; (5) the interest rate on any series of debt security with a 
maturity greater than one year will not exceed the greater of (a) 300 
basis points over the comparable term U.S. Treasury securities or other 
market-accepted benchmark securities, or (b) a rate that is consistent 
with similar securities of comparable credit quality and maturities 
issued by other companies; (6) as set forth in the application made in 
respect of the Initial Financing Order, the final maturity of any long-
term debt securities issued by DRI will not exceed 50 years; (7) the 
distribution rate on any series of preferred security will not exceed 
the greater of (a) 400 basis points over the comparable term U.S. 
Treasury securities or other market-accepted benchmark securities, or 
(b) a rate that is consistent with similar securities of comparable 
credit quality and structure issued by other companies; and (8) the 
underwriting fees, commissions or similar remuneration paid in 
connection with the issue, sale or distribution of any securities 
authorized hereunder (excluding interest rate risk management 
instruments, as to which separate provisions governing fees and 
expenses are proposed below) will not exceed 700 basis points of the 
principal of face amount of the securities issued or gross proceeds of 
the financing.
    The proceeds from the financings will be used for general corporate 
purposes, including: (1) Payments, redemptions, acquisitions, and 
refinancings of outstanding securities issued by DRI; (2) acquisitions 
of and investments in EWGs and FUCOs, provided that DIR's aggregate 
investment in EWGs and FUCOs does not exceed the EWG/GUCO Investment 
Limit; (3) acquisitions of and investments in energy-related companies 
under rule 58; (4) loans to and investments in other system companies; 
and (5) other lawful corporate purposes. As described below and 
defined, in the event DRI utilizes Financing Conduits to issue 
securities covered by the Application, those entities would apply the 
proceeds of securities nominally issued by them to make loans dividends 
or other transfers to DRI or an entity designated by DRI, which would 
then be applied for any of the purposes set forth in the preceding 
sentence.
    Subject to the Financing Conditions and the other conditions noted 
above, DRI proposes to issue debt securities consisting of short-term 
notes, commercial paper and long-term notes as well as equity 
securities consisting of common stock and preferred securities. DRI 
also seeks authorization to issue up to $9.6 billion at any one time 
outstanding of guarantees in support of DRI subsidiaries. In addition, 
DRI requests authority to acquire, directly or indirectly, the equity 
securities of one or more corporations, trusts, partnerships or other 
entities (``Financing Conduits'') created specifically for the purpose 
of facilitating the financing of the authorized and exempt activities 
(including exempt and authorized acquisitions) of such companies 
through the issuance of long-term debt or equity securities, including 
but not limited to hybrid securities, to third parties and the transfer 
of the proceeds of the financings by the Financing Conduits to DRI or 
another DRI subsidiary.
    The parent of a Financing Conduit may, if required, guarantee or 
enter into support or expense agreements in respect of the obligations 
of its Financing Conduits. Any amounts issued by a Financing Conduit to 
third parties will be included in the proposed

[[Page 14227]]

financing limit, if any, applicable to its immediate parent. However, 
if a parent guarantees these issuances by the Financing Conduit, the 
guarantee would not be counted against the proposed limits on 
guarantees.
    DRI, on behalf of itself and, to the extent not exempt under rule 
52, its subsidiaries, requests authorization to enter into interest 
rate hedging transactions with respect to outstanding indebtedness 
(``Interest Rate Hedges''), subject to certain limitations and 
restrictions, in order to reduce or manage interest rate costs. 
Interest Rate Hedges would only be entered into with counterparties 
(``Approved Counterparties'') whose senior debt ratings, or the senior 
debt ratings of the parent companies of the counterparties, as 
published by S&P, are equal to or greater than BBB-, or an equivalent 
rating from Moody's, Fitch or Duff and Phelps.
    Interest Rate Hedges will involve the use of financial instruments 
commonly used in today's capital markets, such as interest rate swaps, 
caps, collars, floors, and structured notes (i.e., debt instruments in 
which the principal and/or interest payments are indirectly linked to 
the value of an underlying asset or index), or transactions involving 
the purchase or sale, including short sales, of U.S. Treasury 
obligations.
    DRI also request approval of an agreement for the allocation of 
consolidated tax among DRI and its subsidiaries (``Tax Allocation 
Agreement''). DRI states that it requires this approval because the 
proposed Tax Allocation Agreement may provide for the retention by DRI 
certain payments for tax losses incurred from time to time, rather than 
the allocation of those losses to subsidiaries without payment as would 
otherwise be required by rule 45(c)(5). As a result of its financing, 
DRI will be creating tax credits that are non-recourse to the 
subsidiaries. DRI believes that it should retain the benefits of those 
tax credits and requests that the Commission reserve jurisdiction over 
the Tax Allocation Agreement, pending completion of the record.
    Finally, DRI, on behalf of itself and its subsidiaries, requests 
authorization to lease, sell or otherwise grant third parties access to 
or rights in excess or unwanted real estate and to permit the 
extraction or harvesting of mineral or other resources contained on or 
in that real estate and to form a new non-utility subsidiary to manage 
that business.

The Connecticut Light and Power Company (70-9697)

    The Connecticut Light and Power Company (``CLP''), 107 Selden 
Street, Berlin, Connecticut 06037 (``Applicant''), an electric utility 
subsidiary company of Northeast Utilities (``NU''), a registered 
holding company, has filed a post-effective amendment under sections 
6(a), 7, 9(a), 10, and 13(b) of the Act and rules 45, 46, 90 and 91 
under the Act to an application-declaration previously filed under the 
Act.
    CLP provides electric power at retail to customers in Connecticut. 
Connecticut enacted an electric utility restructuring law 
(``Restructuring Law''), which introduces retail competition for 
electric services. To facilitate the transition to completion, the 
Restructuring Law contains provisions that permit electric utilities to 
recover some, or all, of certain costs resulting from the transition to 
competition (``Transition Costs'').\3\ The recovery will take place 
through the collection, from electricity consumers, of a non-bypassable 
special charge that is based on the amount of electricity purchased 
(``Market Transition Charge''). The Market Transition Charge may be 
securitized, in part, by the utility through the issuance of transition 
bonds (``Transition Bonds''). Utility companies who wished to 
securitize a portion of their Transition Costs had to apply to the 
Connecticut Department of Public Utility Control (``CDPUC'') and 
receive an order authorizing the utility to issue a specific amount of 
Transition Bonds. CLP submitted a request to CDPUC to approve the 
recovery of Transition costs and to allow the issuance of Transition 
Bonds by special purpose entities (``SPEs'') to be organized by CLP.
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    \3\ Transition Costs include regulatory assets, long-term 
purchased power commitments and other costs, including investments 
in generating plants, spent-fuel disposal, retirement costs and 
reorganization costs, for which an opportunity for recovery is 
allowed in an amount determined by the state public utility 
commissions to be just and reasonable.
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    CLP requested authority from the Commission, through August 31, 
2005, (1) to create and acquire interests in SPEs, (2) for the SPEs to 
issue transition bonds in an aggregate amount not to exceed $1.489 
billion either to investors or to state government-sponsored trusts and 
(3) to enter into agreements to provide services to the SPEs at other 
than cost.
    The Commission issued a notice on August 25, 2000 (HCAR No. 27222), 
reflecting CLP's request to issue Transition Bonds in an aggregate 
amount not to exceed $1.489 billion through August 31, 2005. Subsequent 
to the issuance of this notice, the CPSC authorized CLP to issue $1.551 
billion in Transition Bonds. By order dated December 26, 2000 (HCAR No. 
27319), CLP was only authorized to issue up to $1.489 billion in 
Transition Bonds, due to the Commissions's inability to approve the 
issuance of a greater amount of Transition Bonds than requested in the 
notice issued concerning the transaction. Accordingly, CLP now requests 
authority to increase the amount of Transition Bonds it may issue 
through August 31, 2005 to $1.551 billion.

Allegheny Energy, Inc., et al. (70-9801)

    Allegheny Energy, Inc. (``Allegheny''), a registered holding 
company, and its wholly owned utility subsidiary Allegheny Energy 
Supply Company, LLC (``AE Supply'' and collectively, ``Applicants''), 
have filed an application-declaration (``Application'') under sections 
6(a), 8, 9(a), 10, 12(b), and 32 of the Act and rules 45, 53, and 54 
under the Act.
    Under a Purchase and Sale Agreement between AE Supply and Enron 
North America Corp. (``Enron'') dated November 13, 2000, AE Supply will 
purchase from Enron, for approximately $1.028 billion, all outstanding 
membership interests in five limited liability companies (collectively, 
``Enron LLCs''): Des Plaines Green Land Development, LLC (``DPGL 
Development''), Gleason Power I, LLC (``Gleason''), West Fork Land 
Development, LLC (``West Fork''), all exempt wholesale generators, 
Energy Financing Company, LLC. (``Energy Financing''), a company that 
purchased equipment that was installed in DPGL Development's 
facility,\4\ and Lake Acquisition Company, LLC (``Lake Acquisition''), 
a company that leases land to West Fork. Therefore, Applicants request 
authority for AE Supply to acquire Energy Financing and Lake 
Acquisition.
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    \4\ Applicants state that DPGL Development will continue to 
receive monthly payments through May 14, 2015 from Energy Financing 
for this equipment under an Equipment Sale Agreement dated October 
5, 2000.
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    Applicants also request authority to issue various types of 
securities whose proceeds will be used to finance the acquisition of 
the Enron LLCs and for other corporate purposes. Specifically, 
Applicants request authority for Allegheny to provide guaranties and 
other forms of credit support through July 31, 2005 (``Authorization 
Period'') on behalf of AE Supply in an aggregate amount not to exceed 
$400 million.\5\ This credit support may take the form

[[Page 14228]]

of reimbursement agreements, assumptions of liability for issuances of 
bonds, letters of credit, and other performance and financial 
guaranties. Allegheny will charge AE Supply a fee for each guaranty 
provided on its behalf, and that fee will not exceed its cost of 
obtaining the liquidity necessary to perform the guaranty.
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    \5\ Allegheny is currently authorized to issue to up to $250 
million in guaranties and other credit support on behalf of AE 
Supply through the Authorization Period. See Allegheny Energy, HCAR 
No. 27199 (July 14, 200) (``Prior Order'').
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    Applicants request authority for Allegheny to issue and sell up to 
$1 billion of its common stock (``Common Stock'') through the 
Authorization Period. Applicants state that all Common Stock will be 
sold on terms determined by competitive capital markets. Specifically, 
Applicants state that, for Common Stock distributed to the public, the 
terms may be determined during negotiations with underwriters, dealers, 
or agents, or through competitive bidding processes among underwriters. 
Applicants state that Common Stock may be distributed through private 
placements or other non-public offerings to one or more persons.
    Applicants request authority for AE Supply to borrow from Allegheny 
up to $500 million of the proceeds from the sales of Common Stock. The 
maturities, terms and interest rates will be identical to those that AE 
Supply would be able to obtain in the market, but will not exceed the 
reference United States Treasury Rate plus 300 basis points. Fees and 
expenses associated with these borrowings will be comparable to those 
obtainable by similar utilities, issuing comparable securities, 
containing the same or similar terms and maturities.
    Applicants request authority for AE Supply to issue to banks and/or 
other financial institutions non-recourse debt securities to finance 
its acquisition of the Enron LLCs. Specifically, Applicants request 
authority for AE Supply to issue and sell, for a one year-period, up to 
$550 million in debt securities having maturities of 364 days or less 
(``Short-Term Debt'').\6\ Applicants also request authority for AE 
Supply to issue and sell during the Authorization Period up to $550 
million in debt securities having maturities of between five and thirty 
years (``Long-Term Debt'').\7\ The maturities, terms, and interest 
rates of the Long-Term Debt and the Short-Term Debt will be established 
through negotiations with financial institutions.\8\ The total amount 
of Short-Term Debt and Long-Term Debt at any time outstanding will not 
exceed $550 million.
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    \6\ Currently, AE Supply is authorized to incur up to $300 
million in short-term debt through the Authorization Period.
    \7\ AE Supply is currently authorized to incur up to $400 
million in long-term debt through the Authorization Period. See 
Prior Order.
    \8\ Applicants state that the interest rate on all Long-Term 
Debt will not exceed the United States Treasury Rate plus 400 basis 
points, and the interest rate on all Short-Term Debt will not exceed 
the London International Offered Rate plus 300 basis points.
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    Applicants request authority for AE Supply to acquire as its direct 
subsidiary Allegheny Energy Supply Capital, Inc. (``Supply Capital''), 
which is being organized to engage in tax efficient transactions 
relating to the acquisition of the Enron LLCs with AE Supply and its 
subsidiaries. Allegheny will contribute $1.05 billion in cash to Supply 
Capital in exchange for all ownership interests in the company.
    Applicants request authority for AE Supply to issue up to $1.05 
billion in interest bearing promissory notes to Supply Capital (``LLC 
Loans'') through the Authorization Period. These notes will mature 
within five to thirty years.\9\ Applicants state that AE Supply will 
use the proceeds of the LLC Loans to acquire the Enron LLCs. Further, 
Applicants request authority for Supply Capital to make other loans to 
AE Supply through the Authorization Period, in amounts up to the 
interest and principal payments made on the LLC Loan. These notes will 
mature within five or thirty years.\10\ The proceeds of all loans from 
Supply Capital to AE Supply will be used to finance authorized 
acquisitions, engage in activities authorized by rule 58 under the Act, 
and other capital expenditures (including the construction of pollution 
control equipment).
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    \9\ The interest rates on these notes will not exceed the 
reference United States Treasury Rate plus 300 basis points or the 
cost of acquisition. Applicants state that the fees and expenses 
associated with these debt securities will be comparable to those 
obtainable by similar utilities, issuing comparable securities, 
containing the same or similar terms and maturities.
    \10\ The interest rates on these notes will not exceed the 
reference United States Treasury Rate plus 300 basis points or the 
cost of acquisition. Applicants state that the fees and expenses 
associated these debt securities will be comparable to those 
obtainable by similar utilities, issuing comparable securities, 
containing the same or similar terms and maturities.
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    Applicants state that neither Allegheny nor any of its subsidiaries 
will undertake to effect any of the proposed transactions if the action 
will result in either the common stock equity of Allegheny, on a 
consolidated basis, or any of its utility subsidiaries falling below 
thirty percent.

AGL Resources, Inc. (70-9813)

    AGL Resources, Inc. (``AGL''), a registered holding company, 
located at 817 West Peachtree Street, NW., 10th Floor, Atlanta, Georgia 
30308, has filed an application-declaration with the Commission under 
sections 6(a), 7, 9(a), and 10 of the Act and rules 43 and 86 under the 
Act.
    Currently, the AGL system (``System'') self-insures up to $1 
million of its own risk. Specifically, on behalf of the AGL system, AGL 
Service Company (``AGSC''), a wholly owned service company subsidiary 
of AGL , maintains a per-occurrence deductible of $1 million for 
automobile and general liability exposures, $200,000 for directors and 
officers liability, $125,000 for ``all-risk'' property coverage, and 
$500,000 for workers compensation liability (the levels collectively, 
``Self-Insurance Limit''), and purchases insurance to cover risks over 
and above that amount.\11\
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    \11\ AGL states that certain of its subsidiaries maintain 
separate deductibles and purchase separate coverage limits outside 
the System program described above.
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    AGL requests authority to acquire directly, for $100,000, all of 
the common stock of a captive insurance company (``Captive'') that it 
proposes to organize. The System will maintain the Self-Insurance Limit 
and, to reduce the amount of premiums it pays, the Captive will 
underwrite a certain portion of the insurance purchased by the System, 
that is coverage over the Self-Insurance Limit.\12\ The Captive will 
then transfer its risks to third-party reinsurance companies. 
Applicants state that traditional insurance programs are supported and 
underwritten through a reinsurance market that is generally accessible 
only to insurance companies. By eliminating the middleman for selected 
transactions and coverage, AGL intends to create opportunities for 
significant savings.
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    \12\ AGL states that, initially, the Captive will underwrite 
approximately thirty percent of the System's insurance, and that the 
remaining seventy percent will continue to be provided by non-
affiliated traditional insurers.
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    Initially, the Captive will focus on providing the following types 
of coverage: Automobile, general liability, risk property, boiler and 
machinery, directors and officers, crime, fiduciary and workers 
compensation. In the future, the Captive may seek to underwrite 
additional insurance coverage and retain a small amount of risk within 
the Self-Insurance Limit. With one exception, the Captive proposes to 
sell insurance only to its associates.\13\
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    \13\ Applicants state that the Captive may provide performance 
bonds and construction-related insurance (``Wrap-Up Construction 
Coverage'') for nonassociate contractors working on projects for the 
System. At present, each contractor purchases a separate insurance 
plan in connection with System projects. Applicants state that the 
provision of the Wrap-Up Construction Coverage will eliminate costly 
insurance duplication by providing the general contractor and all 
sub-contractors access to the same insurance program, and that these 
cost savings can then be passed on to the System companies. 
Applicants further state that Wrap-Up Construction Coverage will be 
provided only for the duration of the particular construction 
program undertaken in connection with System company business.

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[[Page 14229]]

    The Captive will be authorized to operate as an insurance company 
in the British Virgin Islands. AGL states that no additional staff will 
be required to operate the Captive because a British Virgin Islands 
management company will be retained to provide administrative services. 
AGSC employees will be directors and principal officers of the Captive 
and, through the management company, will oversee administrative 
functions.\14\ The existing AGSC self-administration claim staff will 
continue to perform the claims adjusting function. All goods and 
services provided by the AGSC to the Captive will be provided in 
accordance with section 13 of the Act and the rules under the Act. The 
cost incurred by the Captive will be recovered in premiums charged by 
the Captive to the System. AGL states that the Captive will not be 
operated to maintain a surplus beyond what will be necessary to remain 
adequately capitalized.
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    \14\ These administrative functions will include: (1) Accounting 
and reporting activities; (2) legal, actuarial, banking and audit 
services; (3) negotiating reinsurance contracts, policy terms and 
conditions; (4) invoicing and making payments, and; (5) managing 
regulatory affairs.
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Entergy Corporation, et al. (70-8899)

    Entergy Corporation, a registered holding company, 639 Loyola 
Avenue, New Orleans, Louisiana 70113, and its retail public subsidiary 
companies, Entergy Arkansas, Inc., 425 West Capitol Avenue, Little 
Rock, Arkansas 72201, Entergy Gulf States, Inc., 350 Pine Street, 
Beaumont, Texas 77701, Entergy Louisiana, Inc., 4809 Jefferson Highway, 
Jefferson, Louisiana 70121, Entergy Mississippi, Inc., 308 East Pearl 
Street, Jackson, Mississippi 39201, Entergy New Orleans, Inc. (``New 
Orleans''), 1600 Perdido Building, New Orleans, Louisiana 70112, as 
well as Entergy's service company subsidiary, Entergy Services, Inc., 
639 Loyola Avenue, New Orleans, Louisiana 70113, System Energy 
Resources, Inc., a generating public utility subsidiary company of 
Entergy, Entergy Operations, Inc., a nuclear management public utility 
of Entergy, both located at 1340 Echelon Parkway, Jackson, Mississippi 
39213, and System Fuels, Inc., a nonutility subsidiary, 350 Pine 
Street, Beaumont, Texas 77701, have filed a post-effective amendment to 
their application-declaration under sections 6(a), 7, 9(a), 10 and 
12(b) of the Act and rules 43, 45 and 54 under the Act. The Commission 
issued a notice of the filing on February 16, 2001 (HCAR No. 27347).
    The notice stated that New Orleans requested an increase in its 
short-term borrowing limits of ``$35 million, for a total of $60 
million.'' The notice should be and is corrected to state, in pertinent 
part, that New Orleans is requesting an increase in its short-term 
borrowing limits of ``$65 million, for a total of $100 million * * *.''

GPU, Inc. (70-9835)

    GPU, Inc. (``GPU''), a registered public-utility holding company 
located at 300 Madison Avenue, Morristown, New Jersey 07960, has filed 
a declaration (``Declaration'') under sections 6(a), 7 and 12(b) of the 
Act and rules 45 and 54 under the Act.
    By order dated April 14, 2000 (HCAR No. 27165), the Commission 
authorized GPU to acquire for cash all of the issued and outstanding 
common shares of MYR. On April 26, 2000, MYR was merged with and into 
GPU Acquisition Corp., wholly owned subsidiary of GPU, and became a 
wholly owned nonutility subsidiary of GPU.\15\ At the time of the 
acquisition, MYR was party to a Credit Agreement dated September 21, 
1999 (``Old Credit Agreement'') with Harris Trust and Savings Bank and 
Comerica Bank (``Comerica''), providing for revolving credit borrowings 
by MYR of up to $30 million outstanding at any one time, of which up to 
$10 million could be in the form of letter of credit (``L/C'') 
obligations. Effective upon GPU's acquisition of MYR, the old Credit 
Agreement was amended to, among other things, reduce the aggregate 
amount of available credit to $20 million to reflect Comerica's 
withdrawal as a lender under the facility. At September 30, 2000, 
$13,333,337 of borrowings were outstanding under the Old Credit 
Agreement.
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    \15\ MYR's principal business involves providing utility 
transmission and distribution, infrastructure and related commercial 
and industrial electrical contracting services to utility, 
industrial, mining, institutional, and governmental entities on a 
nationwide basis.
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    On November 28, 2000, MYR entered into a New Credit Agreement 
(``New Credit Agreement''), with Bank One, NA (``Bank One'') as 
administrative agent and as the initial lender. The New Credit 
Agreement permits borrowings by MYR from time to time in an aggregate 
amount not to exceed $50 million outstanding at any one time. Bank One 
may assign a portion of its rights and obligations to new lenders which 
will become parties to the New Credit Agreement. As described below, 
the New Credit Agreement provides that if GPU does not enter into a 
guaranty of MYR's obligations under that agreement by April 1, 2001, 
the interest rate on loans and fees payable under the New Credit 
Agreement will increase. Accordingly, GPU now proposes to guarantee 
MYR's obligations under the New Credit Agreement (``GPU Guaranty''). 
Under the GPU Guaranty, Declarant would unconditionally and irrevocably 
guarantee the punctual payment when due of all obligations of MYR under 
the New Credit Agreement. GPU will not charge any fee for the issuance 
of the GPU Guaranty.
    Loans made under the New Credit Agreement (``Loans''), at MYR's 
election, will bear interest at one of the three following rates, each 
of which is described below: (1) The Eurodollar Rate; (2) the Floating 
Rate; or (3) the Fixed Rate. The Eurodollar Rate fixes an interest rate 
for an interest period of, at MYR's election, either one, two, three, 
or six months. The Floating Rate may vary on any day and a Fixed Rate 
fixes an interest rate for periods of up to 30 days. In selecting an 
interest rate option, GPU states that MYR will endeavor to achieve, 
over the term of the New Credit Agreement, the lowest overall interest 
expense.
    The Eurodollar Rate is the sum of a specified British Bankers' 
Association Interest Settlement Rate for United States (``U.S.'') 
dollar deposits \16\ (as adjusted for any applicable reserve 
requirements) and the Applicable Margin. The Applicable Margin, as 
defined in the New Credit Agreement, ranges from 50 to 200 basis 
points, depending on the credit rating of GPU's senior unsecured debt, 
plus, after the Non Guaranty Date, 10 basis points. The Non Guaranty 
Date, as defined in the New Credit Agreement, is April 1, 2001. If GPU 
delivers the GPU Guaranty proposed in this Declaration, the Non 
Guaranty Date will not occur.
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    \16\ The British Bankers' Association Interest Settlement Rate 
for deposit in U.S. dollars is a published interest rate for offers 
to place deposits in U.S. dollars with first-class banks in the 
London interbank market for one, two, three, and six-month interest 
periods.
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    The Floating Rate for each day is equal to (1) the Alternate Base 
Rate minus 200 basis points, plus, after the Non Guaranty Date, 10 
basis points. The Alternative Base Rate for any day is the higher of 
(1) Bank One's prime rate and (2) the Federal Funds effective rate \17\

[[Page 14230]]

plus 50 basis points. The Fixed Rate is a fixed rate for an interest 
period of up to 30 days determined by mutual agreement of MYR and the 
lender under the New Credit Agreement. The Fixed Rate is only available 
under the New Credit Agreement when there is only one lender.
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    \17\ The Federal Funds effective rate means, for any day, an 
interest rate equal to the weighted average of the rates on 
overnight Federal funds transactions with members of the Federal 
Reserve System arranged by Federal Funds brokers on that day, as 
published by the Federal Reserve Bank of New York.
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    MYR may borrow and repay Loans through November 1, 2003. MYR paid 
Bank One a one-time commitment fee at the initial closing of the New 
Credit Agreement of $25,000. MYR also will pay the lenders a facility 
fee on the unused commitment which ranges from 10 basis points to 40 
basis points, depending on the credit rating of GPU's senior unsecured 
debt, plus, after the Non Guaranty Date, 2.5 basis points.
    Under the New Credit Agreement, MYR also may request lenders to 
issue L/Cs in a maximum aggregate amount for all L/Cs outstanding of up 
to $10 million. The aggregate amount that MYR may borrow under the New 
Credit Agreement is reduced by the face amount of all outstanding L/
Cs.\18\
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    \18\ Drawings on an L/C would bear interest at the Floating Rate 
if these amounts are repaid by MYR on the same day the drawing is 
made on the L/C. If MYR repays this drawing later, the drawing will 
bear interest at the Floating Rate plus 200 basis points. If MYR 
elects not to reimburse the issuing bank immediately and the 
conditions for a borrowing under the New Credit Agreement are 
satisfied, MYR may obtain a Loan to satisfy its reimbursement 
obligation. In this case, MYR would pay a letter of credit fee equal 
to the Applicable Margin for Eurodollar Rate Loans on the undrawn 
stated amount of outstanding L/Cs.
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    MYR will use the proceeds of the Loans: (1) To refinance borrowings 
under the Old Credit Agreement; (2) to repay outstanding open account 
advances made by GPU; and (3) for working capital, acquisition 
financing, and other general corporate purposes.

    For the Commission, by the Division of Investment Management, 
pursuant to delegated authority.
Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 01-5794 Filed 3-8-01; 8:45 am]
BILLING CODE 8010-01-M