[Federal Register Volume 68, Number 21 (Friday, January 31, 2003)]
[Notices]
[Pages 5057-5058]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 03-2255]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 35-27641]


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

January 27, 2003.
    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 February 18, 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 February 18, 2003, the application(s) and/or 
declaration(s), as filed or as amended, may be granted and/or permitted 
to become effective.

CenterPoint Energy, Inc. et al. (70-9895)

    CenterPoint Energy, Inc. (``CenterPoint''), 1111 Louisiana, 
Houston, TX 77002, a registered public-utility holding company, and its 
direct wholly owned registered holding company subsidiary, Utility 
Holding, LLC, 200 West Ninth Street Plaza, Suite 411, Wilmington, DE 
19801 (together, ``Applicants''), have filed a post-effective amendment 
to their

[[Page 5058]]

application-declaration in this filing under sections 6(a) and 7 of the 
Act and rules 44 and 54 under the Act.
    CenterPoint is a registered public-utility holding company, created 
on August 31, 2002, as part of a corporate restructuring of Reliant 
Energy, Inc. On September 30, 2002, CenterPoint completed the 
distribution (``Distribution'') to shareholders of the remaining stock 
of Reliant Resources, Inc. (``Reliant Resources''). The Distribution 
completed the separation from CenterPoint of the merchant power 
generation and energy trading and marketing business of Reliant 
Resources.
    CenterPoint has three public-utility subsidiary companies that are 
wholly owned (except as indicated below), that own and operate electric 
generation plants, electric transmission and distribution facilities, 
natural gas distribution facilities and natural gas pipelines. 
CenterPoint Energy Houston Electric LLC (``T&D Utility'') engages in 
the electric transmission and distribution business in a 5,000-square 
mile area of the Texas Gulf Coast that includes Houston.
    Texas Genco Holdings, Inc. (``Texas Genco'') is a section 3(a)(1) 
exempt holding company that indirectly owns the Texas generating plants 
formerly owned by the integrated electric utility that was a part of 
Reliant Energy, Inc. (``Texas Genco Assets'').\1\
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    \1\ On January 6, 2003, CenterPoint distributed to its 
shareholders approximately 19% of the common stock of Texas Genco. 
CenterPoint indirectly owns the remaining approximately 81% of the 
common stock of Texas Genco.
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    CenterPoint Energy Resources Corp. (``GasCo'') owns gas 
distribution systems that together form one of the United States' 
largest natural gas distribution operations in terms of customers 
served. Through unincorporated divisions, GasCo provides natural gas 
distribution services in Louisiana, Mississippi and Texas (Entex 
Division), Arkansas, Louisiana, Oklahoma and Texas (Arkla Division) and 
Minnesota (Minnegasco Division). Through wholly owned subsidiaries, 
GasCo owns two interstate natural gas pipelines and gas gathering 
systems and provides various ancillary services.
    Utility Holding, LLC is a Delaware limited liability company and an 
intermediate holding company that is registered under the Act. Utility 
Holding, LLC directly holds approximately 81% of the outstanding common 
stock of Texas Genco. Applicants state that Utility Holding, LLC is 
otherwise a conduit entity formed solely to minimize tax liability.
    For the nine months ended September 30, 2002, CenterPoint had 
revenues of $5.8 billion and operating income of $1.1 billion. As of 
September 30, 2002, CenterPoint had assets totaling $19.0 billion.
    By order dated July 5, 2002, in this filing (``July Order''),\2\ 
the Commission authorized the formation of CenterPoint as a registered 
holding company and approved various financing proposals. Among other 
things, the July Order authorized CenterPoint to issue up to $5 billion 
in long-term debt and $6 billion in short-term debt, subject to an 
overall limit of no more than $6 billion in financings at any one time 
outstanding through June 30, 2003 (``Authorization Period''). In the 
July Order, CenterPoint committed that debt issued by it pursuant to 
such authorization would be unsecured.
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    \2\ Holding Co. Act Release No. 27548.
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    CenterPoint seeks a modification of the July Order to permit 
CenterPoint to issue and sell during the Authorization Period up to $4 
billion of debt that is secured by the stock of Texas Genco, including 
the assets and securities of its indirect subsidiary company, Texas 
Genco, LP (the entity that directly owns the Texas Genco Assets), to 
the extent permitted by and consistent with contractual restrictions 
and applicable law.\3\
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    \3\ Applicants anticipate that the term of the financing would 
be from three to five years.
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    The proceeds of this financing will be used to refinance the 
existing indebtedness of CenterPoint. The proposed financing will 
otherwise be subject to the terms and conditions as set forth in the 
July Order.
    CenterPoint also seeks authority to issue warrants or other stock 
purchase rights, subject to the terms and conditions of the July Order. 
CenterPoint states that it may be required to issue debt securities 
convertible into common stock or debt securities with warrants or other 
stock purchase rights. CenterPoint further states that the proceeds of 
such financing will be used to refinance the existing indebtedness of 
CenterPoint. CenterPoint notes that the July Order grants CenterPoint 
the authority to issue convertible debt securities. CenterPoint now 
seeks authority to issue warrants to purchase the common stock of 
CenterPoint or other stock purchase rights subject to the terms and 
conditions of the July Order.
    On October 10, 2002, CenterPoint entered into a $3.85 billion, 364-
day credit facility (``CenterPoint Facility'') to replace a similar 
facility that had expired. The CenterPoint Facility requires, among 
other things, mandatory commitment reductions of $600 million each by 
February 28, 2003, and June 30, 2003.
    CenterPoint states that it is negotiating with its lenders to 
extend the maturity date of the CenterPoint Facility into 2005, by 
which time CenterPoint expects to have sold its generation assets and 
recovered its stranded costs as provided by Texas law.\4\ CenterPoint 
asserts that deteriorating market conditions have made it difficult to 
refinance CenterPoint's debt on reasonable terms without providing some 
security. CenterPoint states that with the ability to provide 
collateral, an adequate financing arrangement may be implemented. As 
set forth above, CenterPoint seeks authorization pursuant to sections 
6(a) and 7 of the Act to issue and sell during the Authorization Period 
up to $4 billion of debt that is secured by the stock of Texas Genco, 
including the assets and securities of its indirect subsidiary company, 
Texas Genco, LP.
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    \4\ Reliant Resources has an option that may be exercised in 
January 2004 to purchase all of the shares of Texas Genco common 
stock then owned by CenterPoint. Applicants state that if Reliant 
Resources does not exercise the option, CenterPoint plans to sell or 
otherwise monetize its interest in Texas Genco. Applicants state 
that proceeds from the sale, plus proceeds from the securitization 
in 2004 or 2005 of stranded costs related to generating assets of 
Texas Genco and generation related regulatory assets, are expected 
to aggregate in excess of $5 billion.

    For the Commission, by the Division of Investment Management, 
pursuant to delegated authority.
Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 03-2255 Filed 1-30-03; 8:45 am]
BILLING CODE 8010-01-P