[Federal Register Volume 67, Number 248 (Thursday, December 26, 2002)]
[Notices]
[Pages 78829-78831]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 02-32529]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 35-27624]


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

December 19, 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

[[Page 78830]]

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 January 13, 2003, 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 January 13, 2003 the application(s) and/or 
declaration(s), as filed or as amended, may be granted and/or permitted 
to become effective.

Xcel Energy Inc. (70-10096)

    Xcel Energy Inc. (``Xcel''), a registered holding company, located 
at 800 Nicollet Mall, Minneapolis, Minnesota 55402, has filed an 
application-declaration (``Application'') under sections 6(a), 7, 
12(c), 32 and 33 of the Act and rules 46, 53 and 54 under the Act.
    By order dated August 22, 2000 (HCAR No. 27218) (the ``Prior 
Financing Order''), the Commission authorized Xcel to, among other 
things, (i) issue and sell common stock and long-term debt securities 
during a period through September 30, 2003 (``Authorization Period''), 
provided that the aggregate proceeds of these issuances, together with 
any long-term debt and preferred securities issued by financing 
entities established by Xcel, did not exceed $2.0 billion \1\ and (ii) 
issue and sell short-term debt in an aggregate principal amount of up 
to $1.5 billion outstanding at any time. In this Application, Xcel 
seeks to increase the aggregate amount of common stock and long-term 
debt securities that it may issue during the Authorization Period from 
the $2.0 billion authorized by the Prior Financing Order to $2.5 
billion, as described below. Xcel also seeks to modify certain of the 
conditions applicable to the financing authorizations granted in the 
Prior Financing Order.\2\ In addition, Xcel seeks authorization of the 
Commission to declare and pay dividends out of capital and surplus 
during the Authorization Period in an aggregate amount not to exceed 
$260 million.
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    \1\ The authorization in the Prior Financing Order to issue up 
to $2.0 billion of common stock and long-term debt was in addition 
to the authorization in the Prior Financing Order for Xcel to issue 
up to 30 million shares of its common stock under various employee 
benefit and dividend reinvestment plans.
    \2\ Except to the extent specifically provided below, all terms 
and conditions of the Prior Financing Order would remain in effect 
and all securities issued by Xcel under authorization granted by the 
Commission in this proceeding would be subject to the terms and 
conditions of the Prior Financing Order.
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    Specifically, Xcel requests authority to issue and sell common 
stock and/or long-term debt securities for the uses described below, 
provided that the aggregate proceeds received during the Authorization 
Period upon issuance of this common stock (exclusive of the issuance of 
common stock specifically authorized in the Prior Financing Order in 
respect of employee benefit plans and dividend reinvestment plan and 
the issuance of common stock specifically authorized in the 
Commission's order dated May 30, 2002 (HCAR No. 27533) (``NRG Order'')) 
\3\ and the aggregate principal amount of long-term debt issued and 
outstanding at any one time during the Authorization Period, together 
with any long-term debt or preferred securities issued by financing 
subsidiaries established by Xcel under the Prior Financing Order, shall 
not exceed $2.5 billion (``Aggregate Financing Limit'').\4\
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    \3\ In the NRG Order, the Commission authorized Xcel to acquire 
through an exchange offer and subsequent short-form merger the 
outstanding publicly-held stock of its 74%-owned subsidiary, NRG 
Energy, Inc. (``NRG''), and issue up to 33,394,564 shares of its 
common stock for that purpose.
    \4\ As of December 15, 2002, Xcel had issued $1,805 million, 
consisting of $517.5 million of common stock, $1,230 million of 
long-term debt outstanding, and a commitment to issue up to $57.5 
million of long-term debt. These amounts would be counted against 
the Aggregate Financing Limit.
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    Xcel also requests certain modifications to the financing 
conditions contained in the Prior Financing Order. Xcel requests that 
the financing authority granted by the Commission in the Prior 
Financing Order and the financing authority requested in this 
Application be subject to the following general terms and conditions, 
where appropriate:
    (i) The securities would be issued at rates or prices and under 
conditions negotiated or based upon, or otherwise determined by, 
competitive capital markets;
    (ii) The maturities of the debt securities would not exceed fifty 
years;
    (iii) Any long-term debt issued by Xcel (other than debt securities 
not rated by the rating agencies) will, at the time of original 
issuance, be rated at least investment grade by a nationally recognized 
credit rating organization; provided that Xcel requests that the 
Commission reserve jurisdiction over the issuance of long-term debt in 
those circumstances where the security, upon issuance, would be unrated 
or would be rated below investment grade;
    (iv) Xcel's common equity as reflected on its most recent Form 10-K 
or Form 10-Q and as adjusted to reflect subsequent events that affect 
capitalization,\5\ will be at least 30% of Xcel's consolidated total 
capitalization; provided that in any event when Xcel does not satisfy 
the 30% common equity ratio, Xcel may issue common stock under this 
authorization; and
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    \5\ Total capitalization is defined as the sum of common stock 
equity, preferred stock, long-term debt (including current 
maturities) and short-term debt.
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    (v) the underwriting fees, commissions and other similar 
remuneration paid in connection with the noncompetitive issuance of any 
security issued by Xcel under this authorization will not exceed the 
greater of (i) 5% of the principal or total amount of the securities 
being issued; or (ii) issuances expenses that are paid at the time in 
respect of the issuance of securities having the same or reasonably 
similar terms and conditions issued by similar companies of reasonably 
comparable credit quality.
    Further, Xcel requests that the Commission authorize Xcel to engage 
in the financing transactions authorized in the Prior Financing Order 
and in the Commission's order dated March 7, 2002 (HCAR No. 27494) (the 
``100% Order'')\6\ (together, ``Financing Orders'') and in this 
Application at a time when Xcel does not satisfy the requirement that 
Xcel maintain a ratio of common equity to total capitalization of at 
least 30% (``Xcel 30% Test''). This requested authorization is 
supplemental, and in addition, to the authorization granted by the 
Commission on November 7, 2002 (HCAR No. 27597) (``Xcel 30% 
Order'').\7\
    Xcel now requests authorization to issue common stock at any time, 
even if the Xcel 30% Test is not met. Xcel further requests that, 
pending

[[Page 78831]]

completion of the record, the Commission reserve jurisdiction over the 
authorization of Xcel and its subsidiaries to engage in any other 
financing transactions authorized in the Financing Orders and in this 
proceeding at any time that Xcel does not satisfy the Xcel 30% Test.
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    \6\ The 100% Order authorized Xcel to use the proceeds of its 
securities issuances to invest up to 100% of its ``consolidated 
retained earnings,'' as defined in rule 53(a)(1)(i) under the Act, 
in exempt wholesale generators (``EWGs'') and foreign utility 
companies (``FUCOs''), as those terms are defined in sections 32 and 
33 of the Act, respectively.
    \7\ In the Xcel 30% Order, the Commission authorized Xcel to 
engage in certain specified financing transactions through March 31, 
2003, at a time when Xcel's common equity ratio was less than 30%, 
provided that Xcel's common equity ratio was at least 24%.
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    Subject to the limits described above, Xcel may sell common stock, 
options, warrants, stock purchase rights and other equity-linked 
securities or contracts to purchase common stock in any of the 
following ways: (i) Through underwriters or dealers; (ii) through 
agents; or (iii) directly to a limited number of purchasers or a single 
purchaser. Xcel may also issue common stock in public or privately-
negotiated transactions in exchange for the equity securities or assets 
of other companies, provided that the acquisition of any such equity 
securities or assets has been authorized in this proceeding or in a 
separate proceeding or is exempt under the Act or the rules under the 
Act.
    Also, subject to the limits described above, Xcel's long-term debt 
will be unsecured and: (i) May be subordinated in right of payment to 
other debt and other obligations of Xcel; (ii) may be convertible into 
any other securities of Xcel; (iii) will have maturities ranging from 
one to 50 years; (iv) may be subject to optional and/or mandatory 
redemption, in whole or in part, at par or at various premiums above 
the principal amount thereof; (v) may be entitled to mandatory or 
optional sinking fund provisions; (vi) may provide for reset of the 
interest rate pursuant to a remarketing arrangement; and (vii) may be 
called from existing investors by a third party. In addition, Xcel may 
have the right from time to time to defer the payment of interest on 
all or a portion of its long-term debt (which may be fixed or floating 
or ``multi-modal,'' i.e., where the interest is periodically reset, 
alternating between fixed and floating interest rates for each reset 
period). Xcel contemplates that long-term debt securities would be 
issued and sold directly to one or more purchasers in privately-
negotiated transactions or to one or more investment banking or 
underwriting firms or other entities who would resell these securities 
without registration under the Securities Act of 1933, as amended (``33 
Act''), in reliance upon one or more applicable exemptions from 
registration under the 33 Act, or to the public either (i) through 
underwriters selected by negotiation or competitive bidding, or (ii) 
through selling agents acting either as agent or as principal for 
resale to the public either directly or through dealers.
    The Prior Financing Order authorizes Xcel and/or its Subsidiaries 
\8\ to form one or more financing subsidiaries to issue preferred 
securities and/or long-term debt securities, the proceeds of which may 
be loaned to Xcel. Applicants state that any issuance of any long-term 
debt securities by a financing subsidiary established by Xcel would be 
counted against the $2.5 billion Aggregate Financing Limit described 
above.
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    \8\ The term ``Subsidiaries'' is defined in the Prior Financing 
Order, and includes each of Xcel's utility subsidiaries and 
nonutility subsidiaries, as well as any future direct or indirect 
nonutility subsidiaries of Xcel whose equity securities may be 
acquired in accordance with an order of the Commission or in 
accordance with an exemption under the Act or the Commission's rules 
thereunder.
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    Applicants state that the proceeds from these sales would be used 
for purposes previously approved by the Commission in the Prior 
Financing Order, including: (i) Financing investments by and capital 
expenditures of Xcel and its Subsidiaries; (ii) the repayment, 
redemption, refunding or purchase by Xcel or any of its Subsidiaries of 
securities issued by such companies without the need for prior 
Commission approval under rule 42 or a successor rule; (iii) financing 
working capital requirements of Xcel and its Subsidiaries; and (iv) 
other lawful general purposes. In addition, Applicants state that any 
use of proceeds to make investments in any ``energy-related company,'' 
as defined in rule 58 under the Act, would be subject to the investment 
limitation of that rule. Applicants further state that any use of 
proceeds to make investments in any EWG or FUCO would be subject to the 
investment limitation and other conditions set forth in the 100% Order 
or under any order amending or replacing the 100% Order. Xcel further 
commits that no financing proceeds will be used to acquire the equity 
securities of any new subsidiary unless that acquisition has been 
approved by the Commission in this proceeding or in a separate 
proceeding or is in accordance with an available exemption under the 
Act or the rules under the Act.
    Xcel further commits that at any time that the Xcel 30% Test is not 
met, neither Xcel nor any Subsidiary of Xcel (other than NRG and NRG's 
subsidiaries) will invest or commit to invest any funds in NRG and/or 
any EWG or FUCO, except for any amount required to honor the 
obligations of Xcel under the Support and Capital Subscription 
Agreement dated May 29, 2002 between Xcel and NRG (the ``Support 
Agreement'') and/or under any guaranty of the obligations of NRG or any 
EWG or FUCO, which was a valid and binding obligation of Xcel before 
the time that Xcel ceased to comply with the Xcel 30% Test and was 
entered into by Xcel in conformity with the terms and conditions of the 
Prior Financing Order and the 100% Order. Furthermore, Xcel commits 
that during the time that Xcel is not in compliance with the Xcel 30% 
Test, Xcel will not permit NRG to invest, or commit to invest, in any 
new projects which qualify as EWGs or FUCOs; provided, however, NRG may 
increase its investment in EWGs and FUCOs as a result of the 
qualification of existing projects as EWGs or FUCOs and NRG may make 
additional investments in an existing EWG or FUCO to the extent 
necessary to complete any project or desirable to preserve or enhance 
the value of NRG's investment in that project. Xcel requests that the 
Commission reserve jurisdiction over any additional investment by Xcel 
and its Subsidiaries in NRG and/or any EWG or FUCO during the period 
that the Xcel 30% Test is not met.
    Xcel also requests authorization for Xcel to declare and pay 
dividends out of capital and unearned surplus in an aggregate amount 
not to exceed $260 million during the Authorization Period. Xcel states 
that it will not declare or pay any dividend out of capital or unearned 
surplus in contravention of any law restricting the payment of 
dividends. In addition, Xcel states that it will comply with the terms 
of any credit agreements and indentures that restrict the amount and 
timing of distributions by Xcel to its shareholders.

    For the Commission, by the Division of Investment Management, 
pursuant to delegated authority.
Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 02-32529 Filed 12-24-02; 8:45 am]
BILLING CODE 8010-01-P