[Federal Register Volume 66, Number 140 (Friday, July 20, 2001)]
[Notices]
[Pages 38042-38046]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 01-18169]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 35-27426]


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

July 13, 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 August 7, 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 my notice or order issued in the 
matter. After August 7, 2001, the application(s) and/or declaration(s), 
as filed or as amended, may be granted and/or permitted to become 
effective.

Alliant Energy Corporation, et al. (70-9891)

    Alliant Energy Corporation (``Alliant Energy''), a registered 
holding company, and Alliant Energy's direct nonutility subsidiary, 
Alliant Energy Resources, Inc. (``AER''), and AER's direct nonutility 
subsidiaries, Alliant Energy Integrated Services Company, Alliant 
Energy Investments, Inc., Alliant Energy Transportation, Inc., and 
Whiting Petroleum Corporation (collectively, ``Applicants''),\1\ on 
behalf of itself and its direct and indirect nonexempt nonutility 
subsidiary companies, both located at 222 West Washington Avenue, 
Madison, Wisconsin 53703, have filed an application-declaration under 
sections 6(a), 7, 9(a), 10, 12(b), 13(b), 32, 33, and 34 of the Act and 
rules 43, 45(a), 46(a), 53, 54, 58, and 80-92 under the Act.
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    \1\ AER is the holding company for substantially all of Alliant 
Energy's nonutility investments and subsidiaries.
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    Applicants request authority to engage in a variety of financing 
transactions, credit support arrangements, and other related proposals, 
as more fully discussed below, commencing on the effective date of an 
order issued under this filing and ending December 31, 2004 
(``Authorization Period''). In addition, Alliant Energy seeks authority 
to finance exempt wholesale generator (``EWG'') and foreign utility 
company (``FUCO'') investments in an aggregate outstanding amount of up 
to $1.75 billion. This new proposal would replace certain 
authorizations that the Commission has previously granted to Alliant 
Energy.\2\ Applicants state that the proceeds from the financings will 
be used for general corporate purposes, including: (1) Financing, in 
part, investments by and capital expenditures of Alliant Energy, AER 
and AER's current and future direct and indirect nonutility 
subsidiaries (``Nonutility Subsidiaries''), including, without 
limitation, the funding of future investments in EWGs, FUCOs, and 
companies engaged or formed to engage in energy-related activities; (2) 
acquiring, retiring or redeeming by Alliant Energy or any Nonutility 
Subsidiary of any of its own securities; and (3) financing working 
capital requirements of Alliant Energy as well as Alliant Energy's 
utility subsidiaries,

[[Page 38043]]

Wisconsin Power and Light Company, South Beloit Water, Gas and Electric 
Company, Interstate Power Company, and IES Utilities, Inc.; Alliant 
Energy's subsidiary service company, Alliant Energy Corporate Services, 
Inc.; and the Nonutility Subsidiaries (``Subsidiaries'').
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    \2\ Alliant Energy's current financing authority is contained in 
three separate orders: WPL Holdings, Inc., et al., HCAR No. 26856 
(April 14, 1998) (``Merger Order''); Alliant Energy, et al., HCAR 
No. 26956 (December 18, 1998), as modified by Alliant Energy, et 
al., HCAR No. 27304 (December 15, 2000) (collectively, ``Current 
Money Pool Order''), and Alliant Energy, et al., HCAR No. 27069 
(August 26, 1999), as modified by Alliant Energy, et al., HCAR No. 
27130 (February 4, 2000) and Alliant Energy, et al., HCAR No. 27344 
(February 12, 2001) (collectively, ``Current Financing Order''). 
Applicants request that authorization granted in this proceeding 
replace the authorizations under the Merger Order (as it relates to 
the issuance of Common Stock under shareholder and employee plans) 
and the Current Financing Order. Applicants state that the Money 
Pool Order is unaffected by this application-declaration, except 
that Alliant Energy's utilization of proceeds of short-term debt to 
make investments in EWGs and FUCOs would be subject to the EWG/FUCO 
investment limitation proposed in this proceeding.
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    Specifically, Applicants seek authority for the following:

I. Alliant Energy External Financing

    Alliant Energy requests authority to issue and sell from time to 
time equity and debt securities in an aggregate amount not to exceed 
$1.5 billion at any one time outstanding during the Authorization 
Period. These securities include common stock (``Common Stock''),\3\ 
preferred stock (``Preferred Stock''), unsecured long-term debt 
(``Long-Term Debt'') and other preferred or equity linked securities. 
These securities, further described below, would be sold at rates or 
prices and under conditions negotiated or based upon, or otherwise 
determined by, competitive capital markets.
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    \3\ Alliant Energy is authorized by the Merger Order to issue 
from time to time through December 31, 2001, up to 11 million shares 
of common stock.
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A. Common Stock
    Alliant Energy requests authority to issue and sell from time to 
time common stock through underwriters,\4\ dealers,\5\ agents, or a 
limited number of purchasers directly. Alliant Energy may also issue 
Common Stock or options, warrants or others stock purchase rights 
exercisable for Common Stock in public or privately negotiated 
transactions in exchange for the equity securities or assets of other 
companies.\6\
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    \4\ Common Stock is being sold in an underwritten offering, 
Alliant Energy may grant the underwriters a ``green shoe'' option, 
permitting the purchase from Alliant Energy at the same price of 
additional shares then being offered solely for the purpose of 
covering over-allotments.
    \5\ If dealers are utilized in the sale of Common Stock, Alliant 
Energy will see such securities to the dealers, as principals. Any 
dealer may then resell such Common Stock to the public at varying 
prices to be determined by such dealer at the time of resale.
    \6\ Alliant Energy states that these acquisitions would be 
either expressly authorized in a separate proceeding or exempt under 
the Act or the rules under the Act.
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    Alliant Energy also proposes to issue and/or purchase shares of its 
Common Stock (either currently or under forward contracts) in the open 
market for purposes of reissuing shares at a later date under plans 
that are maintained for stockholders, officers and employees, and 
nonemployee directors. Currently, Alliant Energy maintains three plans 
under which it may directly issue or purchase in the open market shares 
of Common Stock: Alliant Energy Corporation Long Term Equity Incentive 
Plan; Alliant Energy Corporation 401(k) Savings Plan; and Alliant 
Energy Corporation Shareowner Direct Plant (collectively, ``Stock 
Plans''). Alliant Energy also proposes to issue and/or purchase shares 
of Common Stock in accordance with the Stock Plans, as they are amended 
or extended, and similar plan(s) funding arrangements adopted in the 
future without any additional Commission approval.
B. Preferred Stock, Long-term Debt and other Preferred or Equity-Linked 
Securities
    Alliant Energy proposes to issue Preferred Stock or other types of 
preferred or equity-linked securities issued in one or more series with 
such rights, preferences, and priorities as may be designated in the 
instrument creating each such series, as determined by Alliant Energy's 
board of directors. These securities will be redeemed no later than 50 
days after issuance. The dividend rate on any series of Preferred Stock 
or other preferred or equity-linked securities will not exceed at the 
time of issuance 500 basis points over the yield to maturity of a U.S. 
Treasury security having a remaining term equal to the term of such 
securities.\7\
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    \7\ Dividends or distributions on Preferred Stock or other 
preferred or equity-linked securities will be made periodically and 
to the extent funds are legally available for such purpose, but may 
be made subject to terms which allow the issuer to defer dividend 
payments or distributions for specified periods. Preferred Stock or 
other preferred or equity-linked securities may be convertible or 
exchangeable into shares of Common Stock.
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    Long-term Debt of a particular series (1) may be convertible into 
any other securities of Alliant Energy, (2) will have a maturity 
ranging from one to 50 years, (3) will bear interest at a rate not to 
exceed at the time of issuance 500 basis points over the yield to 
maturity of a U.S. Treasury security having a remaining term equal to 
the term of such Long-term Debt, (4) may be subject to optional and/or 
mandatory redemption, in whole or in part, at par or at various 
premiums above the principal amount, (5) may be entitled to mandatory 
or optional sinking fund provisions, (6) may provide for reset of the 
coupon pursuant to a remarketing arrangement, and (7) may be called 
from existing investors by a third party. The maturity dates, interest 
rates, redemption and sinking fund provisions and conversion features, 
if any, with respect to the Long-term Debt of a particular series, as 
well as any associated placement, underwriting or selling agent fees, 
commissions and discounts, if any, will be established by negotiation 
or competitive bidding.
C. Nonutility Subsidiary Financing
    Alliant Energy states that, in almost all cases, financings by AER 
and other Nonutility Subsidiaries will be exempt from Commission 
authorization pursuant to rule 52(b). However, in the limited 
circumstances where the Nonutility Subsidiary making the borrowing is 
not wholly owned by Alliant Energy, directly or indirectly, authority 
is requested under the Act for Alliant Energy through AER or any other 
Nonutility Subsidiaries, to make loans to these subsidiaries at 
interest rates and maturities designed to provide a return to the 
lending company of not less than its effective cost of capital. If 
loans are made to a Nonutility Subsidiary, that subsidiary will not 
sell any services to any associate Nonutility Subsidiary unless that 
subsidiary falls within one of the categories of companies to which 
goods and services may be sold on a basis of other than ``at cost.''

II. Guaranties

    Alliant Energy requests authorization to enter into guaranties, 
obtain letters of credit, enter into expense agreements or otherwise 
provide credit support (``Guaranties'') with respect to the obligations 
of any subsidiary as may be appropriate to enable these companies to 
carry on their ordinary course of business in an aggregate principal or 
nominal amount not to exceed $3 billion outstanding at any one time 
(``Guaranty Limit''). Alliant Energy proposes that these Guaranties 
will be in addition to Guaranties by Alliant Energy authorized in the 
Money Pool Order. Alliant Energy requests authority to charge each 
Subsidiary a fee for providing credit support that is determined by 
multiplying the amount of the Guaranty Limit by the cost of obtaining 
the liquidity necessary to perform the Guaranty (for example, bank line 
commitment fees or letter of credit fees, plus other transactional 
expenses) for the period of time the Guaranty remains outstanding.
    In addition, AER and other Nonutility Subsidiaries request 
authority to provide to other Nonutility Subsidiaries guaranties and 
other forms of credit support (``Nonutility Subsidiary Guaranties'') in 
an aggregate principal amount not to exceed $600 million outstanding at 
any one time, exclusive of any guaranties and other forms of credit 
support that are exempt under rule 45(b) and rule 52(b), provided that 
the amount of any Nonutility Subsidiary Guaranties in respect of 
obligations of

[[Page 38044]]

energy-related companies as defined in rule 58 under the Act (``Rule 58 
Companies'') shall also be subject to the limitations of rule 58(a)(1). 
Any Nonutility Subsidiary providing any such credit support may charge 
is associate company a fee for each Guaranty provided on its behalf 
determined in the same manner as specified above.

III. Hedging Transactions

    Alliant Energy and the Nonutility Subsidiaries request authority to 
enter into interest rate hedging transactions with respect to existing 
indebtedness (``Interest Rate Hedges''), subject to certain limitations 
and restrictions, in order to reduce or manage interestate cost using 
financial instruments commonly used in today's capital markets, such as 
interest rate swaps, caps, collars, floors, and structured notes (i.e., 
a debt instrument 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 Securities. Interest Rate Hedges would only be entered 
into with counterparties (``Approved Counterparties'') whose senior 
unsecured debt ratings, or the senior unsecured debt ratings of the 
parent companies of the counterparties, as published by Standard and 
Poor's Ratings Group, are equal to or greater than BBB, or an 
equivalent rating from Moody's Investors Service, Fitch Investor 
Service or Duff and Phelps. These transactions would be for fixed 
periods and stated notional amounts. Fees, commissions and other 
amounts payable to the counterparty or exchange (excluding, however, 
the swap or option payments) in connection with an Interest Rate Hedge 
will not exceed those generally obtainable in competitive markets for 
parties of comparable credit quality.
    Alliant Energy and the Nonutility Subsidiaries also request 
authority to enter into interest rate hedging transactions with respect 
to anticipated debt offers (``Anticipatory Hedges''), subject to 
certain limitations and restrictions. These Anticipatory Hedges would 
only be entered into with Approved Counterparties, and would be used to 
fix and/or limit the interest rate risk associated with any new 
issuance through (1) a forward sale of exchange-traded U.S. Treasury 
futures contracts, U.S. Treasury Securities and/or forward swap 
(``Forward Sale''), (2) the purchase of put options on U.S. Treasury 
Securities (``Put Options Purchase''), (3) a Put Options Purchase in 
combination with the sale of call options on U.S. Treasury Securities 
(``Zero Cost Collar''), (4) transactions involving the purchase or 
sale, including short sales, of U.S. Treasury Securities, or (5) some 
combination of a Forward Sale, Put Options Purchase, Zero Cost Collar 
and/or other derivative or cash transactions, including, but not 
limited to, structured notes, caps and collars, appropriate for the 
Anticipatory Hedges. Applicants represent that each Interest Rate Hedge 
and Anticipatory Hedge will qualify for hedge accounting treatment 
under generallyacceptable accounting practices. Applicants would comply 
with the financial disclosure requirements of the Financial Accounting 
Standards Board associated with hedging transactions.

IV. Changes in Capital Stock of Subsidiaries

    Applicants represent that the portion of an individual Subsidiary's 
aggregate financing to be effected through the sale of stock to Alliant 
Energy or other immediate parent company during the Authorization 
Period under rule 52 and/or under an order issued in this proceeding 
cannot be ascertained at this time. The proposed sale of capital 
securities may in some cases exceed the then authorized capital stock 
of that Subsidiary. In addition, a Subsidiary may choose to use capital 
stock with no par value. Also, a Subsidiary may wish to engage in a 
reverse stock split to reduce franchise taxes or for other corporate 
purposes. As needed to accommodate these proposed transactions and to 
provide for further issuances of securities, the Applicants request 
authority to change the terms of any Subsidiary's authorized capital 
stock capitalization by an amount deemed appropriate by Alliant Energy 
or other intermediate parent company, provided that if a Subsidiary is 
not wholly owned, the consent of all other shareholders has been 
obtained for this change. A Subsidiary would be able to change the par 
value, or change between par value and no-par value stock, without 
additional Commission approval. Any such action by a utility subsidiary 
of Alliant Energy would be subject to and would only be taken upon the 
receipt of any necessary approvals by the state commission in the state 
or states where the utility subsidiary is incorporated and doing 
business.

V. Financing Subsidiaries

    Alliant Energy and the Nonutility Subsidiaries request authority to 
acquire, directly or indirectly, the equity securities of one or more 
subsidiaries to facilitate financing ( ``Financing Subsidiaries'' ). 
These Financing Subsidiaries would be organized specifically for the 
purpose of facilitating the financings of the authorized and exempt 
activities (including exempt and authorized acquisitions) of Alliant 
Energy and the Nonutility Subsidiaries through the issuance of long-
term debt or equity securities, including but not limited to monthly 
income preferred securities, to third parties, and to transfer the 
proceeds of such financings to or as directed by the Financing 
Subsidiary's parent. Alliant Energy may, if required, guarantee or 
enter into expense agreements in respect of the obligations of any 
Financing Subsidiary that it organizes. The amount of any securities 
issued by a Financing Subsidiary of Alliant Energy would be counted 
against the limitation on the amounts of similar types of securities 
that Alliant Energy is authorized to issue directly, as set forth in 
this application-declaration or in an order or orders issued in any 
other proceeding. To avoid double counting, however, any credit support 
provided by Alliant Energy Financing Subsidiaries would not also be 
counted against the Guaranty Limit.

VI. Intermediate Subsidaries and Subsequent Reorganizations.

    Alliant Energy and AER propose to acquire, directly or indirectly, 
the securities of one or more intermediate subsidaries ( ``Intermediate 
subsidaries'' ), which would be organized exclusively for the purpose 
of acquiring, holding and/or financing the acquisition of the 
securities of or other interest in one or more EWGs, FUCOs, Rule 58 
Companies, exempt telecommunication companies ( ``ETCs'' ) as defined 
in section 34 of the Act, or other nonexempt Nonutility Subsidiaries 
authorized by order of the Commission. To the extent these transactions 
are not exempt from the Act or otherwise authorized or permitted by 
rule, regulation or order of the Commission, Alliant Energy requests 
authority for intermediate Subsidiaries to engage in development 
activities ( ``Development Activities'' ) \8\

[[Page 38045]]

and administrative activities ( ``Administrative Activities'') \9\ 
relating to these entities.
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    \8\ Development Activities will be limited to due diligence and 
design review; market studies; preliminary engineering; site 
inspection; preparation of bid proposals, including, in connection 
therewith, posting of bid bonds; application for required permits 
and/or regulatory approvals; acquisition of site options and options 
on other necessary rights; negotiation and execution of contractual 
commitments with owners of existing facilities, equipment vendors, 
construction firms, power purchasers, thermal ``hosts,'' fuel 
suppliers and other project contractors; negotiation of financing 
commitments with lenders and other third-party investors; and such 
other preliminary activities as may be required in connection with 
the purchase, acquisition, financing or construction of facilities 
or the acquisition of securities of or interests in new businesses.
    \9\ Administrative Activities will include providing ongoing 
personnel, accounting, engineering, legal, financial, operating, 
technical and other support services necessary to manage Alliant 
Energy's investments in Nonutility Subsidiaries.
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    An Intermediate Subsidiary may be organized, among other things, 
(1) in order to facilitate the making of bids or proposals to develop 
or acquire an interest in any EWG or FUCO, Rule 58 Company, ETC or 
other nonexempt Nonutility Subsidiary; (2) after the award of a bid 
proposal, in order to facilitate closing on the purchase or financing 
of any acquired companies; (3) at any time subsequent to the 
consummation of an acquisition of an interest in any such company in 
order, among other things, to effect an adjustment in the respective 
ownership interests in such business held by Alliant Energy or AER and 
nonaffilated investors; (4) to facilitate the sale of ownership 
interests in one or more acquired nonutility companyies (5) to comply 
with applicable laws of foreign jurisdictions limiting or otherwise 
relating to the ownership of domestic companies by foreign nationals; 
(6) as a part of tax planning in order to limit Alliant Energy's 
exposure to U.S. and foreign taxes; (7) to insulate Alliant Energy and 
the Utility Subsidiaries from operational or other business risks that 
may be associated with investments in nonutility companies; or (8) for 
other lawful business purposes.
    Investments in Intermediate Subsidiaries may take the form of any 
combination of the following: (1) Purchases of capital shares, 
partnership interests, member interests in limited liability companies, 
trust certificates or other forms of equity interests; (2) capital 
contributions; (3) open account advances with or without interest; (4) 
loans and (5) guaranties issued, provided or arranged in respect of the 
securities or other obligations of any Intermediate Subsidiaries. Funds 
for any direct or indirect investment in any Intermediate Subsidiary 
will be derived from: (1) Financings authorized in this proceeding; (2) 
any appropriate future debt or equity securities issuance authorization 
obtained by Alliant Energy from the Commission; and (3) other available 
cash resources, including proceeds of securities sales by AER or other 
Nonutility Subsidiary under rule 52. To the extent that Alliant Energy 
provides funds or Guaranties directly or indirectly to an Intermediate 
Subsidiary which are used for the purpose of making an investment in 
any EWG or FUCO or a Rule 58 Company, the amount of these funds or 
guaranties will be included in Alliant Energy's ``aggregate 
investment'' in these entities, as calculated in accordance with rule 
53 or rule 58 under the Act,\10\ as applicable.
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    \10\ ``Aggregate Investment'' is defined in rule 53(a)(1)(i) to 
mean all amounts invested, or committed to be invested, in EWGs and 
FUCOs, for which there is recourse, directly or indirectly, to the 
holding company.
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    Alliant Energy also requests authority to consolidate or otherwise 
reorganize all or any part of its direct and indirect ownership 
interests in Nonutility Subsidiaries, and the activities and functions 
related to these investments. To effect these consolidations or other 
reorganizations, Alliant Energy or AER may either contribute the equity 
securities of one Nonutility Subsidiary to another Nonutility 
Subsidiary (including a newly formed Intermediate Subsidiary) or sell 
(or cause a Nonutility Subsidiary to sell) the equity securities or all 
or part of the assets of one Nonutility Subsidiary to another one. 
These transactions may take the form of a Nonutility Subsidiary selling 
or transferring the equity securities of a Subsidiary or all or part of 
that Subsidiary's assets as a dividend to an Intermediate Subsidiary or 
to another Nonutility Subsidiary, and the acquisition, directly or 
indirectly, of the equity securities or assets of that Subsidiary, 
either by purchase or by receipt of a dividend. The purchasing 
Nonutility Subsidiary in any transaction structured as an intrasystem 
sale of equity securities or assets may execute and deliver its 
promissory note evidencing all or a portion of the consideration given. 
Each transaction would be carried out in compliance with all applicable 
U.S. or foreign laws and accounting requirements, and any transaction 
structured as a sale would be carried out for a consideration equal to 
the book value of the equity securities being sold.

VII. Additional Investments in Energy Assets

    AER and the other Nonutility Subsidiaries request authority to make 
additional investments in nonutility energy assets in the United States 
and Canada, specifically including natural gas production, gathering, 
processing, storage and transportation facilities and equipment, liquid 
oil reserves and storage facilities, and associated facilities 
(collectively, ``Energy Assets''), that are incidental to the ongoing 
oil and gas exploration and production and energy marketing, brokering 
and trading operations of AER's subsidiaries. AER requests 
authorization to invest up to $800 million (``Investment Limitation'') 
at any one time outstanding during the Authorization Period in these 
Energy Assets or in the equity securities of existing or new companies 
substantially all of whose physical properties consist or will consist 
of these Energy Assets.\11\ These Energy Assets (or equity securities 
of companies owning Energy Assets) may be acquired for cash or in 
exchange for Common Stock or other securities of Alliant Energy, AER, 
or other Nonutility Subsidiary of AER, or any combination of the 
foregoing. If Common Stock of Alliant Energy is used as consideration 
in connection with these acquisitions, the market value of that Common 
Stock on the date of issuance will be counted against the Investment 
Limitation. The stated amount or principal amount of any other 
securities issued as consideration in these transactions will also be 
counted against the Investment Limitation. Under no circumstances will 
AER or any oil or gas production or energy marketing subsidiary 
acquire, directly or indirectly, any assets or properties the ownership 
or operation of which would cause any of these companies to be 
considered an ``electric utility company'' or ``gas utility company'' 
as defined under the Act.
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    \11\ Companies whose physical properties consist of Energy 
Assets may also be currently engaged in energy (gas or electric or 
both) marketing activities. To the extent necessary, Applicants 
request authorization to continue such activities in the event they 
acquire such companies.
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VIII. Sales of Goods and Services

    AER and other Nonutility Subsidiaries propose to provide services 
and sell goods to each other at fair market prices determined and 
without regard to cost, and request an exemption (to the extent that 
rule 90(d) does not apply) under section 13(b) from the cost standards 
of rules 90 and 91 as applicable to each transaction, in certain 
instances.

IX. Energy-Related Activities Outside the United States

    Applicants request authority for the Nonutility Subsidiaries to 
engage in energy-related activities both within and outside the United 
States. These activities include energy marketing, energy management 
and energy consulting services. Specifically, Applicants request 
authority to engage in energy marketing activities in Canada and 
request the Commission to reserve

[[Page 38046]]

jurisdiction over energy marketing activities outside the United States 
and Canada pending the completion of the record in this proceeding. 
Applicants also request authority for the Nonutility Subsidiaries to 
provide energy management services and consulting services anywhere 
outside the United States. Applicants request that the Commission 
reserve jurisdiction over other energy-related activities outside the 
United States, pending completion of this record.

X. Payment of Dividends Out of Capital or Unearned Surplus

    AER proposes, on behalf of itself and each of its nonexempt 
Nonutility Subsidiaries, that these companies be permitted to pay 
dividends out of capital and unearned surplus and to acquire, retire, 
or redeem securities that AER or any Nonutility Subsidiary has issued 
to any associate company, to the extent permitted under applicable 
corporate law and the terms of any applicable credit or security 
agreements. AER anticipates that there will be situations in which it 
or one or more Nonutility Subsidiaries will have unrestricted cash 
available for distribution in excess of any such company's current and 
retained earnings. In these situations, the declaration and payment of 
a dividend would be charged, in whole or in part, to capital or 
unearned surplus.
    AER, on behalf of itself and each nonexempt Nonutility Subsidiary 
represents that it will not declare or pay any dividend or acquire, 
retire or redeem any securities of which any of these Nonutility 
Subsidiaries is the issuer that are held by an associate company, out 
of capital or unearned surplus in contravention of any law restricting 
the payment of dividends or the terms of any credit or security 
agreements.\12\
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    \12\ The Commission has previously authorized substantial 
similar proposals. See Current Financing Order; also see NiSource 
Inc., Holding Co. Act Release No. 27265 (Nov. 1, 2000).
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XI. Investments in EWGs and FUCOs

    Alliant Energy requests authority to use the proceeds of authorized 
financing and Alliant Energy Guaranties to make investments in EWGs and 
FUCOs in an amount which, when added to Alliant Energy's existing 
aggregate investment, would not exceed $1.75 billion. Based on Alliant 
Energy's aggregate investments as of March 31, 2001 (approximately 
$355.9 million), this would enable Alliant Energy to make incremental 
investments in EWGs and FUCOs of about $1.39 billion. Alliant Energy, 
through subsidiaries of AER, currently holds interests in various 
foreign electric generation and distribution utility companies that 
have been certified as FUCOs. Alliant Energy does not hold an interest 
in any EWG at this time, but is investigating several potential 
investments.\13\ As of March 31, 2001, Alliant Energy's aggregate 
investment in all of these entities was approximately $355.9 million. 
An aggregate investment in EWGs and FUCOs in an amount equal to $1.75 
billion would be equal to about 160% of Alliant Energy's average 
consolidated retained earnings \14\ as of March 31, 2001 ($1.093 
billion).
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    \13\ The largest concentration of Alliant Energy's foreign 
investments is in Brazil, followed by New Zealand and Australia. 
Alliant Energy has also made relatively small investments in China 
and Mexico.
    \14\ ``Consolidated retained earnings'' is defined in rule 
53(a)(1)(ii) to mean the average of the consolidated retained 
earnings of the registered system as reported for the four most 
recent quarterly periods in the holding company's Annual Report on 
Form 10-K or Quarterly Report on Form 10-Q filed under the 
Securities Exchange Act of 1934.
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    Alliant Energy further represents that it will maintain common 
equity as a percentage of its consolidated capitalization (inclusive of 
short-term debt) at 30% or above during the Authorization Period, and 
will also maintain common equity as a percentage of capitalization of 
each of Alliant Energy's utility subsidiaries at 30% or above during 
the Authorization Period.

    For the Commission by the Division of Investment Management, 
pursuant to delegated authority.
Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 01-18169 Filed 7-19-01; 8:45 am]
BILLING CODE 8010-01-M