[Federal Register Volume 68, Number 142 (Thursday, July 24, 2003)]
[Notices]
[Pages 43773-43777]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 03-18779]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 35-27697]


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

July 18, 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 August 8, 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 August 8, 2003, the application(s) and/or 
declaration(s), as filed or as amended, may be granted and/or permitted 
to become effective.

E.ON AG, et al. (70-9985)

    E.ON AG (``E.ON''), E.ON--Platz 1, 40479 Dusseldorf, Germany, a 
registered holding company under the Act; Fidelia Corporation 
(``Fidelia''), 300 Delaware Avenue, Suite 544, Wilmington, Delaware 
19801, an indirect, financing subsidiary of E.ON; Louisville Gas and 
Electric Company (``LG&E''), 220 West Main Street, Louisville, Kentucky 
40402, a public utility company under the Act and an indirect 
subsidiary of E.ON; and Kentucky Utilities Company (``KU''), One 
Quality Street, Lexington, Kentucky 40507, a public utility company 
under the Act and an indirect subsidiary of E.ON, (collectively, 
``Applicants''), have filed an application-declaration as a post-
effective amendment (``Application'') to a previously filed 
application-declaration under sections 6(a), 7, 9, 12(b), 12(d), 32 and 
33 of the Act and rules 53 and 54 under the Act.
    Applicants request authority through May 31, 2005 (``Authorization 
Period''), for Fidelia to provide intercompany loans to LG&E and KU and 
for LG&E and KU to grant security for these loans.
    By order dated June 14, 2002 (Holding Company Act Release No. 
27539) \1\ (``June Order''), the Commission authorized the acquisition 
of Powergen plc by E.ON and authorized terms of the financing of the 
E.ON holding company system as well as certain related transactions. 
E.ON owns LG&E Energy Corp. (``LG&E Energy''), a public utility holding 
company exempt by order under section 3(a)(1) of the Act, which in turn 
owns LG&E and KU. E.ON's interest in LG&E Energy is held indirectly 
through several intermediate holding companies. E.ON U.S. Investments 
Corp., the direct parent of LG&E Energy, also owns E.ON North America 
Inc. (``E.ON NA''), which in turn currently owns 74.6% of Fidelia. The 
remaining 25.4% of Fidelia is owned by E.ON U.S. Holding GmbH, a 
direct, wholly-owned subsidiary of E.ON.
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    \1\The June Order granted authority requested in S.E.C. Filing 
70-9961 (``Acquisition Filing'') and 70-9985 (``Original Financing 
Filing''). The Original Financing Filing was amended by order dated 
February 21, 2003 (Holding Company Act Release No. 27654).
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    In the June Order, the Commission authorized, among other things, 
E.ON and its subsidiaries to engage in certain financing transactions. 
Specifically, E.ON and E.ON NA, through Fidelia or another special 
purpose financing subsidiary of E.ON NA, were authorized to finance all 
or a portion of the capital needs of LG&E Energy and its subsidiaries, 
directly or through other companies in the E.ON holding company system 
(``E.ON Group''). The financing authority in the June Order provided 
that borrowings would be unsecured and would only occur if the interest 
rate on the loan would result in an equal or lower cost of borrowing 
than the LG&E Energy Group company could obtain in a loan from E.ON or 
in the capital markets on its own.
    E.ON is currently funding, and proposes to continue to fund, the 
cash requirements of LG&E and KU through intercompany loans. E.ON 
states that its financing strategy is to raise capital at the top 
holding company, E.ON, and to provide those funds to subsidiary 
companies through intercompany loans and/or as equity contributions. 
E.ON states that it is able to provide funds to LG&E and KU at a cost 
that is at or below the external borrowing costs of LG&E and KU.
    LG&E and KU, however, have provisions in their respective articles 
of incorporation that restrict the amount of unsecured debt that can be 
outstanding. When LG&E and KU approach this limit on unsecured debt, 
any additional debt incurred by them would have to be secured. 
Therefore, under the financing authority granted in the June Order, 
LG&E and KU will not be able to take advantage of the economic 
efficiencies of the intercompany loans when they have reached their 
unsecured debt limits. E.ON states that it is in the best interest of 
LG&E and KU, as well as that of the E.ON group, that the financing 
needs of LG&E and KU be provided through intercompany loans. Therefore, 
the Applicants request authority for Fidelia to provide intercompany 
loans to LG&E and KU on a secured basis.
    The Applicants request authorization for Fidelia to provide 
intercompany loans to LG&E and KU upon the terms and subject to the 
conditions set forth in

[[Page 43774]]

the June Order,\2\ except that Applicants request that LG&E and KU may 
grant security for the intercompany loans.\3\ LG&E and KU request 
authorization to secure intercompany loans with a subordinated lien on 
certain of the personal property of each company, including ``utility 
assets'' within the meaning of the Act. The subordination provisions 
will provide that the E.ON group companies cannot exercise any rights 
or remedies against the property of LG&E and KU unless all bonds under 
the borrowing company's first mortgage bond indenture have been paid in 
full. The aggregate outstanding principal amount of intercompany loans 
made to LG&E and KU on a secured basis will not exceed $275 million and 
$215 million, respectively. LG&E and KU commit that the aggregate 
principal amount of secured intercompany loans, together with the 
aggregate principal amount of bonds issued under their respective first 
mortgage bond indenture, will not exceed the limit on bonds set forth 
in their first mortgage bond indenture.\4\ The Applicants further 
commit that neither LG&E nor KU will borrow any funds as secured 
intercompany loans under the authority granted, unless at the time of 
the incurrence of any secured intercompany loan, the following 
conditions are met:
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    \2\ The financing authority granted in the June Order requires 
that all borrowings by LG&E Energy and its subsidiary companies (the 
``LG&E Energy Group'') from an associate company be at the lowest 
of: (i) E.ON's effective cost of capital; (ii) the lending 
associate's effective cost of capital (if lower than E.ON's 
effective cost of capital); and (iii) the borrowing LG&E Energy 
Group company's effective cost of capital determined by reference to 
the effective cost of a direct borrowing by the company from a 
nonassociate for a comparable term loan that could be entered into 
at that time (the ``Best Rate Method''). E.ON states that the Best 
Rate Method assures that an LG&E Energy Group company that elects to 
obtain debt financing from an associate company would not pay more 
for that financing than it would pay in the capital markets for a 
similar loan had the borrower sought to finance its capital 
requirements with independent third parties.
    \3\ LG&E and KU are currently participants in a utility money 
pool, through which each company may borrow funds on an unsecured 
basis. The operation of the utility money pool would not be affected 
by this proposal, and money pool transactions would remain 
unsecured.
    \4\ Currently, LG&E and KU have sufficient capacity under their 
respective first mortgage bond indenture to issue first mortgage 
bonds, or alternatively to incur secured intercompany loans, in the 
amount of the authorization requested.

    A. E.ON and the borrowing company (LG&E or KU, as the case may 
be) maintain common equity \5\ as a percentage of total 
capitalization \6\ of at least 30%, as reflected in their most 
recent annual or semiannual report. Applicants request that the 
Commission reserve jurisdiction over the making of secured 
intercompany loans at any time that this condition is not satisfied.
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    \5\ Common stock equity includes common stock (i.e., amounts 
received equal to par or stated value of the common stock), 
additional paid in capital, retained earnings and minority 
interests.
    \6\ Common stock to total capitalization ratio is calculated as 
follows: common stock equity/(common stock equity + preferred stock 
+ gross debt). Gross debt is the sum of long-term debt, short-term 
debt and current maturities.
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    B. All outstanding securities of the borrowing company that are 
rated are rated investment grade, and all outstanding securities of 
E.ON that are rated are rated investment grade. For purposes of this 
provision, a security will be deemed to be rated investment grade if 
it is rated investment grade by at least one nationally recognized 
statistical rating organization, as defined in rule 15c3-
1(c)(2)(vi)(F) under the Securities Exchange Act of 1934. Applicants 
request that the Commission reserve jurisdiction over the making of 
secured intercompany loans at any time that this condition is not 
satisfied.

    The secured intercompany loans would be in compliance with the Best 
Rate Method. Therefore, LG&E and KU would not pay more than they would 
pay in the capital markets for a similar loan had the borrower sought 
to finance its capital requirements with independent third parties. 
LG&E and KU would save the issuance expenses associated with the 
issuance of first mortgage bonds. These expenses would typically 
include legal fees, printing costs, trustees fees, rating agency fees 
and filing fees. In recent transactions, these expenses have aggregated 
approximately $300,000 per issuance.
    E.ON states that its financing policy is to centralize, wherever 
possible, all external funding at the E.ON level. This strategy, it 
says, allows E.ON to ensure that all funds are raised at the lowest 
cost due to the greater financial strength of the holding company. 
Applicants state that E.ON (currently AA-, stable outlook, from 
Standard & Poor's, and A1, stable outlook, from Moody's) is the 
strongest credit in the E.ON Group. Lenders and bond investors see E.ON 
(and its finance companies under its guarantee) as the most 
creditworthy company in the E.ON Group, according to the Applicants; 
and E.ON receives the best margins and other terms and conditions. 
Therefore, according to the Applicants, E.ON (or its finance companies 
under guarantee of E.ON) is the preferred entity of the E.ON Group to 
approach the capital markets. E.ON lends the proceeds from financings 
in the form of intercompany loans to those subsidiaries with demand. 
According to the Applicants, for subsidiary companies to raise funds 
externally would create inefficiencies in E.ON's strategy because 
E.ON's creditors would be structurally subordinated to the debt of the 
subsidiaries. This would result in increased costs for E.ON, and 
consequently, all of its subsidiaries.
    The articles of incorporation of LG&E and KU contain provisions for 
the benefit of the holders of their preferred shares that limits the 
amount of unsecured indebtedness which may be outstanding at any time 
that the company has any preferred shares outstanding. The unsecured 
debt limit at LG&E is 20% of the sum of (a) secured debt plus (b) total 
of capital and surplus. The limit at KU is 25% of the same sum. In 
order to exceed these limits, LG&E and KU would need to obtain the 
consent of the holders of a majority of the preferred shares 
outstanding.
    Applicants state that LG&E and KU have significant projected 
capital and financing needs, including those related to the pending 
maturity of first mortgage bonds, the anticipated need to finance the 
installation of pollution control equipment and the planned acquisition 
of additional electric generation capacity in 2003. The projected 
capital expenditure budgets for LG&E and KU for 2003 and 2004 are 
approximately $340 million and $550 million, respectively. The limit on 
unsecured indebtedness in the Articles of Incorporation of LG&E and KU 
constrains the financing options available to LG&E and KU to finance 
these needs, Applicants state. The secured intercompany loans, as long-
term debt, will provide a cost-efficient means for LG&E and KU to 
finance their capital needs, including payment of maturing indebtedness 
and financing of capital expenditures, according to the Applicants. The 
secured intercompany loans may also be used to finance the payments due 
upon termination of the accounts receivable securitization programs of 
LG&E and KU. The accounts receivable securitization programs, which 
were scheduled to terminate at the end of July 3003, are in the process 
of being extended.
    The intercompany loans to be made by Fidelia to LG&E and KU will be 
made according to separate loan and security agreements between Fidelia 
and the borrower. The agreement documents the intercompany loan, 
specifying the Best Rate Method for determining the interest rate to be 
applicable to the loans and providing for the grant of a security 
interest in the specified collateral. The interest rate on the notes 
will be set at the time of issuance, based upon the maturity of the 
notes. At the time of the proposed intercompany loan, the borrowing 
company will obtain quotes from investment banks for a first mortgage 
bond issued by that company and quotes for an unsecured bond issued by 
E.ON. The interest rate

[[Page 43775]]

applicable to the intercompany loan would be the lower of (a) the 
average of three quotes obtained from investment banks for an unsecured 
bond issued by E.ON with the applicable term of the loan and (b) the 
lowest of three quotes obtained by the borrowing company from 
investment banks for a first mortgage bond issued by a company with the 
applicable term of the loan. At this time, the debt of Fidelia is not 
rated. Therefore, the interest cost of any debt that would be issued by 
Fidelia to unaffiliated third parties would not be competitive with the 
rates available to E.ON and LG&E or KU. If in the future Fidelia is 
able to obtain funds in the capital markets on competitive terms, 
quotes will also be obtained in a similar manner for debt to be issued 
by Fidelia.
    The collateral for the loans will consist of all of the borrower's 
now owned or later acquired ``equipment,'' as that term is defined in 
Kentucky's Uniform Commercial Code (KRS Chapter 355), excluding, 
however, any equipment that is not subject to the lien under the 
borrower's first mortgage bond indenture. Only property subject to the 
lien of the first mortgage bond indenture will be subject to the 
subordinated security interest. As set out in the definition section of 
the loan and security agreement, ``equipment'' has the meaning set out 
in the Uniform Commercial Code (``goods other than inventory, farm 
products, or consumer goods'') and includes all of the borrower's now 
owned or later acquired machinery, equipment, furniture, furnishings 
and all tangible personal property similar to any of the foregoing 
(other than inventory), together with all improvements, accessories and 
appurtenances of these and any proceeds of any of these, including 
insurance proceeds and condemnation awards and all books and records 
relating to the preceding. Motor vehicles and other property subject to 
a certificate of title law are not included as collateral. Also, assets 
such as cash and accounts receivable are not ``equipment'' and would 
not be subject to the lien.
    As noted earlier, the security interest granted in the loan and 
security agreement is expressly subordinated to the lien of the 
borrower's first mortgage bond indenture. The subordination provisions 
provide that Fidelia cannot exercise any rights or remedies against the 
property of LG&E or KU unless all bonds under the company's first 
mortgage bond indenture have been paid in full. So long as LG&E and KU 
are not in default under their respective loan agreements, Fidelia will 
have no rights against LG&E and KU, except to receive payment of 
principal and interest on the loans when due, according to the 
Applicants. Even if a default existed under a loan agreement, Fidelia 
would have no right to pursue any remedies against the property of LG&E 
or KU, as applicable, until all of the borrower's first mortgage bonds 
have been paid in full. Under the existing financing agreements of 
E.ON, the creditors of E.ON would have no rights against LG&E or KU as 
a result of the proposed transactions, Applicants state. In any event, 
the creditors of E.ON could have no greater rights against LG&E and KU 
than those of Fidelia through the loan agreement, according to the 
Applicant. Therefore, the Applicants state, so long as LG&E or KU, as 
the case may be, is not in default of its obligations under the 
proposed loan agreement, neither Fidelia nor any creditor of E.ON would 
have any rights against LG&E or KU, as applicable, or their respective 
property.

CenterPoint Energy, Inc., et al. (70-10148)

    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 declaration under 
sections 6(a) and 7 of the Act and rules 44 and 54 under the Act.
    Applicants request authority to engage in certain refinancing 
transactions, as more fully described below, commencing on the 
effective date of an order issued under this filing and ending June 30, 
2005 (``Authorization Period'').

I. Background

A. The CenterPoint System
    CenterPoint is a registered public-utility holding company, created 
on August 31, 2002 as part of a corporate restructuring of Reliant 
Energy, Inc. 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, through Texas Genco LP, an electric 
utility company, owns the Texas generating plants formerly owned by the 
integrated electric utility that was a part of Reliant Energy, Inc.\7\
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    \7\ 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. Utility Holding, LLC is otherwise a conduit 
entity formed solely to minimize tax liability.
B. Existing Financing Authority
    By order dated May 28, 2003,\8\ the Commission authorized 
CenterPoint to pledge its interest in the common stock of Texas Genco 
(the ``Texas Genco Stock''), in connection with the refinancing of 
approximately $3.85 billion of CenterPoint debt (``CenterPoint 
Facility''). The interest rate on borrowings under the CenterPoint 
Facility, currently 450 basis points over London Interbank Offered 
Rate, is based on CenterPoint's credit rating. Such borrowings are 
secured by a pledge of the Texas Genco Stock. Since February 28, 2003, 
CenterPoint has reduced the principal amount of the CenterPoint 
Facility by approximately $1 billion, from $3.85 billion to $2.846 
billion.
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    \8\ Holding Co. Act Release No. 27680.
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    By order dated June 30, 2003 (the ``Omnibus Financing Order''),\9\ 
the Commission authorized CenterPoint and its subsidiaries to engage in 
certain financing and related transactions through June 30, 2005. Among 
other

[[Page 43776]]

things, the Omnibus Financing Order authorized CenterPoint to enter 
into transactions undertaken to extend the terms of or replace, refund 
or refinance existing obligations and the issuance of new obligations 
in exchange for existing obligations, provided in each case that the 
issuing entity's total capitalization is not increased as a result of 
such financing transaction. In the Omnibus Financing Order, CenterPoint 
committed that long-term debt issued by it pursuant to such 
authorization would be unsecured.
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    \9\ Holding Co. Act Release No. 27692.
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II. Proposed Restructuring of the CenterPoint Facility

    Based on the current favorable market conditions, CenterPoint is 
considering the restructuring of the $2.846 billion CenterPoint 
Facility to reduce the principal amount and the cost of borrowing under 
the facility. Depending on the response of the bank lenders, 
CenterPoint may renegotiate or replace the CenterPoint Facility.
    Although the final structure has not yet been determined, 
Applicants currently contemplate that CenterPoint would repay the 
CenterPoint Facility with a combination of borrowings and repayments of 
intrasystem receivables as described below:
    (a) CenterPoint would enter into a new, significantly smaller bank 
facility currently contemplated to be approximately $1.25 billion (the 
``New Facility'') that may be secured by a pledge of the Texas Genco 
Stock. Such secured interest would be subordinate to or pari passu with 
that of the B Loan below.
    (b) CenterPoint would enter into a new three-year borrowing (the 
``B Loan'') that is secured by a pledge of the Texas Genco Stock. 
Applicants contemplate that the amount of the B Loan would be at least 
$500 million and possibly greater than $1 billion, depending on the 
response of the capital markets.
    (c) CenterPoint would issue unsecured debt under the authority in 
the Omnibus Financing Order; and
    (d) The T&D Utility would issue up to $500 million in unsecured 
debt. The proceeds will be used to repay existing intercompany debt 
from the T&D Utility to CenterPoint, to repay borrowings from the money 
pool, to displace financing that might otherwise be done at the T&D 
Utility and/or for other general corporate purposes.\10\
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    \10\ CenterPoint will seek authority necessary to effectuate 
this part of the refinancing in a post-effective amendment in SEC 
File No. 10128.
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    The proposed financing transactions are intended to reduce the 
effective cost of money to the CenterPoint system, as well as to reduce 
dependence on the lenders under the CenterPoint Facility. Applicants 
state that the transactions would not increase the overall amount of 
debt or adversely affect the capital structure of any entity or of the 
CenterPoint system as a whole. Nor would the transactions involve the 
grant of any new or additional security. The Texas Genco Stock that is 
pledged as security for the CenterPoint Facility currently would be 
extended to a different group of lenders; there would be no increased 
burden on the subject asset.

III. Requested Authority

    CenterPoint seeks authority to issue debt that is secured by a 
pledge of the Texas Genco Stock in an amount of up to $2.85 billion 
\11\ at any one time outstanding during the Authorization Period, where 
the proceeds of such financing transactions would be used to extend the 
terms of or replace, refund or refinance existing secured obligations, 
provided in each case that CenterPoint's total capitalization is not 
increased as a result of such financing transactions. Any financings 
under the requested authority would be subject to the following general 
terms, consistent with those established in the Omnibus Financing 
Order:
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    \11\ Under the structure outlined above, CenterPoint would issue 
less than $2.5 billion in secured debt (in the form of the New 
Facility and the B Loan). The remainder of the CenterPoint Facility 
would be replaced with a combination of unsecured debt and T&D 
Utility borrowings. Because, however, the types and amounts of the 
constituent financings have not yet been finally determined, 
CenterPoint needs to preserve the ability to replace the CenterPoint 
Facility in its entirety with lower cost secured debt at the 
CenterPoint level. CenterPoint will amend the filing to reflect the 
ultimate form of the transactions. In no event would the overall 
amount of CenterPoint ssecured debt be increased as a result of the 
proposed transactions.
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    (a) Effective Cost of Money. The effective cost of money on any 
long-term debt financings occurring pursuant to the authorizations 
granted under this declaration would not exceed the greater of (i) 700 
basis points over the yield to maturity of a U.S. Treasury security 
having a remaining term approximately equal to the term of the subject 
debt, but in no event greater than the current rates under the 
CenterPoint Facility or (ii) a rate that is consistent with similar 
securities of comparable credit quality and maturities issued by other 
companies of reasonably comparable credit quality as determined by the 
competitive capital markets.
    (b) Maturity. The maturity of long-term indebtedness would not 
exceed 5 years.
    (c) Issuance Expenses. The underwriting fees, commissions or other 
similar remuneration paid in connection with the non-competitive issue, 
sale or distribution of securities pursuant to this declaration would 
not exceed 7% of the principal or total amount of the securities being 
issued.
    (d) Use of Proceeds. The proceeds from the sale of securities in 
external financing transactions would be used to refinance or acquire, 
retire or redeem, pursuant to rule 42 under the Act, securities 
previously issued by CenterPoint or its subsidiaries.
    (e) Common Equity Ratio. At all times during the Authorization 
Period, each of the T&D Utility, GasCo, and Texas Genco, LP (the 
utility subsidiaries) will maintain common equity of at least 30% of 
its consolidated capitalization (common equity, preferred stock, long-
term debt and short-term debt) as reflected in the most recent Form 10-
K or Form 10-Q filed with the Commission adjusted to reflect changes in 
capitalization since the balance sheet date therein;\12\
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    \12\ Applicants state that net of securitization debt, 
CenterPoint's projected equity capitalization will be 30% or greater 
by the end of 2006.
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    (f) Investment Grade Ratings. No securities may be issued in 
reliance on the authority requested herein unless: (i) The security to 
be issued, if rated, is rated investment grade by at least one 
nationally recognized statistical rating organization as that term is 
used in paragraphs (c)(2)(vi)(E), (F) and (H) of Rule 15c3-1 under the 
Securities Exchange Act of 1934 (``NRSRO''); (ii) all outstanding rated 
securities of the issuer are rated investment grade by at least one 
NRSRO; and (iii) all outstanding rated securities of CenterPoint are 
rated investment grade by at least one NRSRO. Applicants request that 
the Commission reserve jurisdiction over the issuance of securities 
subject to the investment grade ratings criteria where one or more of 
the investment grade ratings criteria are not met.
    (g) Authorization Period. No security will be issued pursuant to 
the authority sought herein after the last day of the Authorization 
Period (which is June 30, 2005), provided, however, that securities 
issuable or deliverable upon exercise or conversion of, or in exchange 
for, securities issued on or before June 30, 2005 in accordance with 
the terms of such authorization may be issued or delivered after such 
date.


[[Page 43777]]


    For the Commission, by the Division of Investment Management, 
pursuant to delegated authority.
Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 03-18779 Filed 7-23-03; 8:45 am]
BILLING CODE 8010-01-P