[Federal Register Volume 67, Number 37 (Monday, February 25, 2002)]
[Notices]
[Pages 8569-8572]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 02-4343]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 35-27492]


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

February 15, 2002.
    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

[[Page 8570]]

March 12, 2002, 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 12, 2002, the application(s) and/or 
declaration(s), as filed or as amended, may be granted and/or permitted 
to become effective.

SCANA Corporation, et al.

[70-9521]

    SCANA Corporation (``SCANA''), a registered holding company, and 
South Carolina Electric & Gas Company (``SCE&G''), one of its public-
utility company subsidiaries, both at 1426 Main Street, Columbia, South 
Carolina 29201, have filed a post-effective amendment to a previously 
submitted application-declaration (``Prior Application'') under section 
11(b)(1) of the Act.
    By order dated February 9, 2000,\1\ the Commission authorized 
SCANA, then a public-utility holding company claiming an exemption from 
registration under section 3(a)(1) of Act, to acquire Public Service 
Company of North Carolina, Incorporated, a gas public-utility company 
operating in North Carolina. In the Prior Order, the Commission allowed 
SCANA to retain all of the combined company's nonutility operations 
except for a bus transit system (``Bus Service'') being operated in 
South Carolina by SCE&G and a forty-nine percent membership interest in 
Palmetto Lyme, LLC, a company engaged in the sale of lime.\2\ SCANA 
conceded that retention of the Bus Service would not be consistent with 
the standards of section 11(b)(1) of the Act, and proposed to divest 
it.
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    \1\ HCAR No. 27133 (``Prior Order'').
    \2\ The Commission reserved jurisdiction over the retention of 
Palmetto, pending completion of the record. See Prior Order.
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    On February 24, 2000, the City of Columbia, South Carolina 
(``City'') filed a Petition for Clarification or Review of the Prior 
Order (``Petition''). In the Petition, and its subsequently filed 
pleadings, the City questions only the Commission's decision to require 
the divestiture of the Bus System. Specifically, the City contends that 
SCANA is required under South Carolina law to operate the Bus System 
and that the Bus Service serves important State and/or community 
interests.
    In its post-effective amendment, SCANA states that it has been 
negotiating for the City to take over the Bus System. The company 
states that an agreement has been reached regarding the basic terms for 
the transfer, and they are as follows:
     The City will discharge SCE&G's obligation to provide a 
public transit system in Columbia, South Carolina, and the assets of 
the Bus System will be transferred to the City;
     SCE&G and the City will enter into a thirty-year electric 
and gas franchise;
     SCE&G will pay the City for the franchise an initial fee 
of $15 million in four quarterly installments beginning at the time of 
the transfer of the Bus System and an additional annual fee of $2.47 
million for the first seven years of the franchise;
     SCE&G will convey 6.98 acres of property currently used in 
connection with the transit system as a parking facility for the buses, 
in a condition compliant with current state and federal regulations;
     SCE&G will convey the historic Columbia Canal and 
Hydroelectric Plant (``Plant'') to the City, and enter into collateral 
agreements regarding the Plant; and
     SCE&G and the City will enter into a new water contract 
for withdrawals from Lake Murray for the terms of the electric and gas 
franchise.
    SCANA requests that the Commission grant the company a one-year 
extension of time to divest the Bus System. The company states that 
this additional time is necessary to allow: (1) the City to complete 
due diligence regarding the transaction; (2) final agreements to be 
executed by SCANA, SCE&G, and the City; and (3) SCANA to obtain the 
necessary state and federal approvals.

Progress Energy Inc., et al.

[70-9909]

    Progress Energy Inc. (``Progress''), a registered holding company, 
Carolina Power & Light Company (``CP&L'') and North Carolina Natural 
Gas Corporation (``NCNG''), both public utility subsidiaries of 
Progress, all located at 410 South Wilmington Street, Raleigh, North 
Carolina 27602, and Florida Power Corporation (``Florida Power''), a 
utility subsidiary of Progress, One Progress Plaza, St. Petersburg, 
Florida 33701 (collectively, ``Applicants''), have filed a post 
effective amendment (``Amendment'') under sections 6(a), 7, and 12(b) 
of the Act and rules 45, 53 and 54 under the Act to an application-
declaration previously filed.
    Progress requests authority to modify existing financing orders to: 
(1) Increase from $5 billion to $7.5 billion the aggregate amount of 
common stock, preferred stock or other forms of preferred securities 
and unsecured long-term debentures having maturities of up to 50 years 
(collectively, ``Long-term Securities'') that Progress may issue and 
have outstanding at any time through September 30, 2003 
(``Authorization Period''); (2) eliminate a $6 billion overall limit 
for the aggregate principal amount that Progress may have outstanding 
at any time for short-term debt, debentures, and indebtedness incurred 
by Progress to finance its acquisition of the issued and outstanding 
common stock of Florida Progress (``Acquisition Debt'') (collectively, 
``Overall Indebtedness Limit'') (short-term debt will remain limited by 
$2.5 billion as authorized in the Financing Orders, acquisition debt 
will remain $3.5 billion, and debentures will be included in the $7.5 
billion limit for Long-term Securities requested in this Amendment); 
and (3) increase from $750 million to $2 billion the principal or 
stated amount of guarantees that Progress may provide at any one time 
with respect to the obligations of its subsidiaries.
    By previous orders dated December 12, 2000 and September 20, 2001 
(HCAR Nos. 27297 and 27440, respectively) (``Financing Orders''), 
Progress, its direct and indirect nonutility subsidiaries, and its 
utility subsidiaries, which are CP&L, NCNG, and Florida Power, 
(collectively, ``Utility Subsidiaries''), are authorized to engage in a 
program of external financing and intrasystem financing, to organize 
and acquire the equity securities of specified types of new 
subsidiaries, to pay dividends out of capital or unearned surplus, and 
to engage in other related financial and structural transactions from 
time to time through the Authorization Period. Except for the 
modifications described above, Applicants do not seek any other changes 
or modifications to the terms, conditions or limitations applicable 
under the Financing Orders.
    Progress states that it will maintain common equity as a percentage 
of consolidated capitalization (inclusive of short-term debt) at 30% or 
above during the Authorization Period. Accordingly, Progress will not 
issue any securities unless, on a pro forma basis to take into account 
the issuance of such securities and the application of proceeds, common 
equity as a percentage of consolidated capitalization will remain at or 
above 30%. In addition, Progress will maintain common equity as a

[[Page 8571]]

percentage of capitalization of each of its three Utility Subsidiaries 
at 30% or above during the Authorization Period.
    As of September 30, 2001, Progress's consolidated capitalization 
(on a pro forma basis in order to take into account the issuance of 
long-term debt securities after September 30, 2001) consisted of 38.0% 
common equity, 0.6% preferred stock, 56.6% long-term debt and 4.8% 
short-term debt. As of September 30, 2001, common equity as a 
percentage of capitalization of CP&L, Florida Power and NCNG was equal 
to 45.5%, 55.3% and 68.6%, respectively.
    Progress states that the increase in Long-term Securities is needed 
because it had as of November 30, 2001, issued a total of 
$4,534,800,000 of long-term securities ($528,100,000 of common stock 
and $4,006,700,000 of long-term debt, including $3,200,000,000 of term 
notes issued to refinance debt incurred by Progress in connection with 
the acquisition of Florida Progress). Progress contemplates the need to 
issue additional Long-Term Securities during the remainder of the 
Authorization Period to retire short-term debt, to fund capital 
programs of its subsidiaries, to finance investments in new nonutility 
ventures (including, in particular, exempt wholesale generators 
(``EWGs'') that are under development or planned), and for other 
general corporate purposes. Progress forecasts the need for additional 
long-term financing of at least $1.75 billion through the end of 2003.

Alabama Power Company, et al.

[70-10009]

    Alabama Power Company (``Alabama''), 600 North 18th Street, 
Birmingham, Alabama 35291, Georgia Power Company (``Georgia''), 241 
Ralph McGill Boulevard, N.E., Atlanta, Georgia 30308, Gulf Power 
Company (``Gulf''), One Energy Place, Pensacola, Florida 32520, 
Mississippi Power Company (``Mississippi''), 2992 West Beach, Gulfport, 
Mississippi 39501, and Savannah Electric and Power Company 
(``Savannah''), 600 East Bay Street, Savannah, Georgia 31401 
(collectively, ``Applicants''), all wholly owned direct public-utility 
subsidiary companies of The Southern Company, a registered holding 
company, have filed an application with the Commission under sections 
9(a) and 10 of the Act.
    Previously, Applicants acquired, through purchases and leases, coal 
hopper railroad cars for use in transporting coal in dedicated unit 
train service to the respective company's coal-fired generating 
plants.\3\ These railcars were acquired for Applicants' use based upon 
their anticipated coal needs. Applicants state that, at any given time, 
an Applicant may have a need for a lesser or greater number of railcars 
than is currently available, and that during surplus periods it may be 
desirable and economically advantageous to lease or sublease excess 
railcars to nonaffiliates.
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    \3\ Currently, Alabama has approximately 4,300 railcars that 
transport coal to two of its plants. Georgia has approximately 4,400 
railcars that transport coal to nine of its plants. Gulf does not 
have any railcars, but Mississippi has leased 800 railcars on behalf 
of itself and Gulf that transport coal to Plant Daniel, which is 
owned by Mississippi and Gulf as tenants in common. Mississippi has 
approximately 1,000 railcars that transport coal to two of its 
plants. Savannah has approximately ninety-four railcars that 
transport coal to one of its plants.
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    Applicants request authority, through December 31, 2007, to lease 
or sublease to nonaffiliates, railcars that are not needed to transport 
their fuel. All of the proposed leases or subleases would be at market 
rates for a duration of one year or less and give the respective 
Applicant the right of termination, upon reasonable notice, permitting 
the return of the cars to customer service, if necessary. No more than 
2,500 railcars would be leased or subleased at any one time.
    Revenues realized from the proposed transactions would be credited 
against the respective Applicant's costs as owner or lessee (as 
applicable) of the railcars, and reflected accordingly in its 
ratemaking provisions, except to the extent the regulatory authority 
having jurisdiction over the matter authorizes a different treatment.

PNM Resources Inc.

[70-10043]

    PNM Resources, Inc. (``PNM Resources''), a public utility holding 
company exempt under section 3(a)(1) by rule 2 and its wholly owned 
public utility subsidiary company, Public Service Company of New Mexico 
(``PNM'') (collectively, ``Applicants'') both located at Alvarado 
Square, Albuquerque, NM 87158, request authority under sections 9(a)(2) 
and 10 of the Act to acquire the voting securities of DCC Project 
Finance Two, Inc. (``DCC Project Finance'') \4\ from Dana Commercial 
Credit Corporation (``DCCC'').\5\ PNM Resources states that it will 
continue to claim an exemption under section 3(a)(1) by rule 2.
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    \4\ Prior to this proposed transaction, DCC Project Finance has 
claimed the exclusion under rule 7(d)(1)(ii) promulgated under the 
Act because all of the equity interest in the DCC Project Finance is 
owned by a company, DCCC, that is otherwise primarily engaged in one 
or more businesses other than the business of a public utility 
company.
    \5\ Dana Commercial Credit Corporation's Annual Report for the 
year 2000 states that Dana Commercial Credit Corporation, a Delaware 
corporation, is a subsidiary of Dana Corporation, one of the world's 
largest suppliers to vehicle manufacturers and their related 
aftermarkets. DCCC, either directly or through subsidiary companies, 
is primarily engaged in one or more businesses other than the 
business of a public utility company. DCC Project Finance is a 
direct, wholly owned subsidiary of DCCC. DCCC owns all of the issued 
and outstanding capital stock of DCC Project Finance.
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    DCC Project Finance, a Delaware corporation, is a single purpose 
entity (``SPE'') and has a 60% beneficial ownership interest in the 
Eastern Interconnection Project (``EIP''). The EIP consists of a 216 
mile, 345 kV transmission line between PNM's bulk power switching 
station north of Bernalillo, New Mexico and a high voltage DC converter 
station, called the Blackwater Station, located in the Clovis-Portales 
area of eastern New Mexico, plus associated switching equipment and the 
Blackwater Station DC converter facilities. The EIP was constructed in 
1984-1985 to interconnect PNM's transmission system to that of 
Southwestern Public Service Company (``SPS''). As of February 5, 1985, 
the EIP had an appraised fair market value of not less than 
$73,000,000.
    PNM is party (``Lessee'') to a leveraged lease transaction under 
which it leases a 60% undivided interest in EIP from DCC Project 
Finance (``Lessor''). Applicants are exercising their rights to 
purchase under the lease, as stated in section 14 of the amended and 
restated lease as of September 1, 1993:
    (a) Unless a Default or Event of Default shall have occurred and be 
continuing, the Lessee shall have the right to exercise one of the 
following options to purchase the Undivided Interest:
    (1) On the date of expiration of the Basic Term, the Fixed Rent 
Renewal Term or any then applicable Fair Market Renewal Term, the 
Lessee shall have the right upon not less than two years' prior written 
notice, to purchase the Undivided Interest on the date of expiration of 
such Term at a purchase price equal to the Fair Market Value thereof; 
or
    (2) On the Basic Rent Payment Date designated in a written notice 
given at least two years prior to such Basic Rent Payment Date (which 
date may only be a Basic Rent Payment Date during the Basic Term 
occurring on or after the thirtieth Basic Rent Payment Date), at a 
purchase price equal to the greater of the Early Purchase Value 
applicable on the date of purchase and the Fair Market Value of the 
Undivided Interest on such

[[Page 8572]]

date, plus an amount equal to the sum of any Basic Rent then owing and 
any premium due on prepayment of the Notes.
    Under a purchase agreement between DCCC \6\ and PNM dated as of 
January 15, 2002 (``Purchase Agreement''), the Applicants will purchase 
100% of the issued and outstanding common stock of DCCC Project Finance 
(``Subject Stock''), to be renamed PNM Project Finance Two, Inc., 
immediately upon consummation of the transaction. The Applicants will 
purchase the Subject Stock from DCCC for $5,672,000.\7\
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    \6\ The institutional equity investor, DCCC is the sole 
beneficiary of the grantor trust which holds legal title to the 60% 
interest and leases the interest to PNM. The DCCC maintains its 
investment in the leased assets through a wholly owned, single-
purpose Delaware corporation DCC Finance Project.
    \7\ If the closing date shall occur after February 28, 2002, 
interest on the cash payment of $5,672,000 will be computed at the 
lower of DCCC's 60-day funding cost or 5% per annum for the actual 
number of days elapsed from, but excluding January 15, 2002, to and 
including the closing date. Such interest (if due) shall be an 
upward adjustment the cash purchase price. No other pricing 
adjustment is applicable to the purchase or sale of the Subject 
Stock.
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    PNM Resources states that it will maintains its qualification for a 
section 3(a)(1) exemption by rule 2. PNM is an integrated public 
utility primarily engaged in the generation, transmission, distribution 
and sale of electricity and in the transmission, distribution and sale 
of natural gas within the State of New Mexico, will continue to be a 
wholly owned subsidiary of PNM Resources. PNM Project Finance Two 
(previously DCC Project Finance), a Delaware corporation, will be a 
wholly owned subsidiary of PNM. PNM Resources states that it will not 
derive, directly or indirectly, any material part of its income from 
PNM Project Finance (in any event, the gross revenues derived from PNM 
Project Finance will not exceed $200,000). PNM Resources does not own 
directly any utility properties or perform any utility operations.

    For the Commission, by the Division of Investment Management, 
pursuant to delegated authority.
Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 02-4343 Filed 2-22-02; 8:45 am]
BILLING CODE 8010-01-P