STROOCK. Company of New Hampshire, and Western Massachusetts Electric Company, at an estimated price of $23.03 per share.

Transcription

1 A SUMMARY OF RECENT ORDERS, PUBLIC NOTICES AND NO-ACTION LETTERS UNDER THE PUBLIC UTILITY HOLDING COMPANY ACT OF ORDERS 1. Progress Energy, Inc. et al. (05/05/03) ( , ) Authorizes through September 30, 2003, Progress Energy, Inc. and its indirect wholly-owned nonutility subsidiary, Progress Ventures, Inc., to increase the limit on amounts invested in the acquisition or construction of certain nonutility energy related assets in the U.S. that are incidental to their energy marketing activities from $500 million to $1 billion. 2. Northeast Utilities (05/08/03) ( , ) Modifies the previous order (see Release No ) relating to NU s issuance of unsecured long-term debt securities to indicate that these securities may be entitled to mandatory or optional sinking fund provisions. 3. Vermont Yankee Nuclear Power Corporation (05/13/03) ( , ) Authorizes Vermont Yankee Nuclear Power Corporation, in connection with a restructuring designed to disengage it from nuclear generation, to (i) declare and pay one or more dividends out of capital in the aggregate amount of up to $43,000,000 in one or more steps, with all dividends to be declared and paid by December 31, 2003, and (ii) repurchase out of available cash,the shares of its common stock held by New England Power Company, Connecticut Light and Power Company, Public Service Company of New Hampshire, and Western Massachusetts Electric Company, at an estimated price of $23.03 per share. 4. American Transmission Company, LLC, et al. (05/15/03) ( , ) Authorizes through June 30, 2004, ATC, an electric transmission public utility company subsidiary of Alliant Energy Corporation to issue (i) short-term debt in an amount not to exceed $200 million at an interest rate not to exceed 300 points over LIBOR; (ii) long-term debt in an amount not to exceed $710 million, when combined with short-term debt, at an interest rate not to exceed 500 basis points over of the yield to maturity of a similar US Treasury security; and (iii) member interests in ATC. Also authorizes ATC Management, Inc. ( ATCMI ), a public utility company, corporate manager of ATC, and holding company subsidiary of Alliant, to issue (i) preferred stock or other types of preferred securities with dividend rates not to exceed 500 basis points over the yield to a maturity of a similar U.S. Treasury security, and (ii) Class A and Class B stock in an aggregate amount which, when combined with the member interests to be issued by ATC,will not exceed $393 million. The total aggregate amount of Class A shares, Class B shares and preferred securities will not exceed $500 million. Authorizes ATC and ATCMI to issue guarantees in favor of certain of their affiliates,in an amount not STROOCK & STROOCK & LAVAN LLP NEW YORK LOS ANGELES MIAMI 180 MAIDEN LANE, NEW YORK, NY TEL FAX

2 to exceed $125 million. Reserves jurisdiction over the issuance by ATC of any convertible preferred securities, pending completion of the record. 5. Centerpoint Energy, Inc. f/k/a Reliant Energy, Inc., et al. (05/28/03) ( , ) Authorizes a modification of the previous financing order dated July 5, 2002 (the July Order ) (see Release No ) to allow Centerpoint, a registered publicutility holding company, and Utility Holding, LLC, Centerpoint s direct wholly owned registered holding company subsidiary, to (i) issue warrants to purchase the common stock of Centerpoint, subject to the terms and conditions of the July Order, and (ii) pledge the stock of Texas Genco Holdings, Inc., a section 3(a)(1) exempt holding company subsidiary of Utility Holding, in connection with the refinancing of approximately $3.85 billion of Centerpoint debt. 6. Xcel Energy Inc., et al. (05/29/03) ( , ) Authorizes Xcel through September 30, 2003, (i) to issue common stock and long-term debt securities in an aggregate amount not to exceed $2 billion, and (ii) to issue and sell short-term debt securities in an aggregate principal amount of $1.5 billion. Reserves jurisdiction over (i) Xcel declaring and paying, in an aggregate amount not to exceed $260 million, additional dividends out of capital and unearned surplus; (ii) Xcel increasing the amount of common stock and/or long-term debt securities it is authorized to sell and issue from $2.0 to $2.5 billion; and (iii) modification of certain financing terms of Xcel s prior financing order. 7. FirstEnergy Corp. et al. (06/02/03) ( , ) Grants FirstEnergy and GPU Service, Inc., a service subsidiary of FirstEnergy, a one-month extension of the June 1, 2003 deadline to continue their service company activities before these activities must be transferred to FirstEnergy Service Company ( ServCo ), a service company subsidiary of FirstEnergy. Reserves jurisdiction over (i) the consolidation of FirstEnergy s service company functions into ServCo, (ii) the approval of ServCo s policies and procedures, (iii) the approval of a service agreement between ServCo and each subsidiary of FirstEnergy that requests service, and (iv) the approval of a separate service agreement between FirstEnergy s Ohio utility subsidiaries and Pennsylvania Power Company, a utility subsidiary of FirstEnergy. 8. American Transmission Company, LLC (06/23/03) ( , ) Modifies the previous order dated May 15, 2003 (the May Order ) (See Release No above) to authorize (i) ATC, an electric transmission public utility company subsidiary of Alliant Energy Corporation, to issue member interests and (ii) ATC Management, Inc. ( ATCMI ), a public utility company, corporate manager of ATC and holding company subsidiary of Alliant, to issue class A stock, Class B stock and preferred securities in an aggregate amount of $500 million at any one time outstanding, provided that the aggregate amounts of member interests, Class A shares and Class B shares outstanding at any time will not exceed $393 million plus the value at that time of the member interests and Class A shares and Class B shares outstanding as of the date of the May Order. 9. Gulf Power Company (06/27/03) ( , ) Authorizes Gulf Power through March 31, 2006 to (i) incur obligations in connection with the issuance and sale of pollution control revenue bonds in an aggregate principal amount of up to $180 million at interest rates not to exceed the greater of 200 basis points over comparable U.S. Treasury securities or a gross spread over such Treasury securities consistent with comparable securities; and (ii) issue and sell senior debentures, senior promissory notes or other senior debt instruments, first mortgage 2

3 bonds and preferred stock, all in an aggregate amount of up to $450 million in any combination of issuance. The revenue bonds will be issued for the benefit of Gulf Power to finance or refinance the costs of certain air and water pollution control facilities at Gulf Power s electric generating plants. 10. Unitil Corporation et al. (06/30/03) ( , ) Authorizes Unitil through June 30, 2006 to (i) extend the operation of its money pool, and (ii) make additional short-term borrowings on a revolving basis up to an aggregate amount of $55,000,000. Also authorizes Fitchburg Gas and Electric Light Company, a wholly-owned subsidiary of Unitil, to make short-term borrowings from the money pool and direct borrowings from commercial banks in an aggregate principal amount not to exceed $35,000,000 from time-to-time through June 30, No securities, apart from securities issued for the purpose of funding the money pool operation may be issued unless (1) the debt security to be issued, if rated, is rated investment grade by at least one nationally recognized statistical rating organization ( NRSRO ), (2) all outstanding securities of the issuer that are rated are rated investment grade by at least one NRSRO and (3) all outstanding securities of Unitil that are rated are rated investment grade by at least one NRSRO. 11. CenterPoint Energy Inc., et al. (06/30/03) ( , ) Authorizes CenterPoint to (i) issue 200 million additional shares of its common stock and to issue warrants, options and other rights to acquire an additional 200 million shares of common stock; (ii) issue directly or indirectly through one financing subsidiaries preferred stock, preferred securities and equity-linked securities, such that the total outstanding amount of such securities will not exceed $975 million; (iii) issue and sell external debt securities, such that the total amount of debt securities will not exceed $5.847 billion; (iv) issue unsecured short-term debt; (v) enter into and perform anticipatory hedges with respect to its debt offerings; (vi) enter into guarantees and provide credit support with respect to the obligations of its subsidiaries in an aggregate amount not to exceed $4 billion; and (vii) maintain and fund a utility money pool. Also authorizes Texas Genco Holdings, Inc. and Texas Genco, LP, both subsidiaries of CenterPoint, to issue or sell external debt in an aggregate amount of $250 million. Releases jurisdiction over the retention of CenterPoint Energy Investment Management, Inc., MRT Services Company and CenterPoint Energy Trading and Transportation Group, Inc. Reserves jurisdiction over (1) the issuance of securities where (a) the security to be issued, if rated, is rated below investment grade, (b) not all outstanding rated securities of the issuer are rated investment grade or (c) not all outstanding rated securities of the top-level registered holding company are rated investment grade; (2) CenterPoint s request to declare and pay dividends out of capital or unearned surplus in an amount of up to $500 million; (3) CenterPoint s sale of the stock and/or assets of Texas Genco Holdings, Inc. and Texas Genco, LP to Reliant Resources, Inc.; (4) CenterPoint s request to use special purpose subsidiaries to issue securitization bonds to recover the balance of stranded costs relating to previously owned electric generation; (5) the incurrence by CenterPoint of $478 million in additional debt; (6) the incurrence by CenterPoint Energy Houston Electric, LLC of $250 million in additional debt; and (7) the issuance by CenterPoint Energy Resources Corp. of $500 million in external debt securities. 12. Northeast Utilities, et al. (06/30/03) ( , ) Authorizes (i) NU and The Connecticut Light and Power Company, Western Massachusetts Electric Company, Public Service Company of New Hampshire, Yankee Energy System, Inc. and Yankee Gas Services Company, each a wholly- 3

4 owned subsidiary company of NU and collectively the Utility Borrowers to enter into interest rate hedging transactions related to their short-term debt transactions and (ii) continuation through June 30, 2004 of the NU Money Pool. Reserves jurisdiction over (i) the issuance by NU and the Utility Borrowers of short-term unsecured debt in aggregate amounts not to exceed $400 million, $375 million, $200 million, $100 million, $50 million and $100 million, respectively; (ii) the increase in shortterm borrowing limits for Holyoke Water Power Company, North Atlantic Energy Corporation and Northeast Nuclear Energy Company to $5 million, $5 million and $10 million, respectively; (iii) the addition of participants to the NU money pool, and (iv) the issuance by NU and the Utility Borrowers of any securities where (1) the security to be issued, if rated, is rated below investment grade, (2) not all outstanding securities of the issuer that are rated are rated investment grade or (3) not all outstanding securities of NU that are rated are rated investment grade. 13. FirstEnergy Corp. et al. (06/30/03) ( , ) Authorizes FirstEnergy through December 31, 2005 to (i) increase its capitalization, in an aggregate amount not to exceed $4.5 billion, by issuing directly or indirectly through financing subsidiaries (a) additional common stock and/or derivative or convertible securities that are convertible into or exercisable for common stock, (b) preferred stock or other types of preferred securities, (c) long-term debt, and (d) short-term debt in an aggregate principal amount not to exceed $1.5 billion;(ii) maintain and fund a utility money pool; (iii) provide its nonwholly owned nonutility subsidiaries with loans at interest rates and maturities offering a return of not less than the effective cost of capital advanced; (iv) sell or otherwise transfer nonutility businesses or the securities of current subsidiaries engaged in these nonutilty businesses;(v) issue and/or acquire in open market transactions up to 30 million additional shares of common stock under its stock investment plan and other existing dividend and reinvestment and stock-based management incentive and employee benefits plans; (vi) enter into a tax allocation agreement among FirstEnergy and its subsidiaries; and (vii) acquire directly or indirectly the securities of one or more other entities investing in exempt subsidiaries. Also authorizes Jersey Central Power & Light Company, Pennsylvania Power Company, Metropolitan Edison Company, Pennsylvania Electric Company, American Transmission Systems, Incorporated and Northeast Ohio Natural Gas Corp., all utility subsidiaries of FirstEnergy, to issue short-term debt in aggregate principal amounts not to exceed $428 million, $50 million,$250 million,$250 million,$500 million,and $20 million, respectively. Reserves jurisdiction over (i) the issuance of securities in those circumstances where FirstEnergy or its utility subsidiaries common equity as a percentage of consolidated capitalization falls below 30%, (ii) the issuance of securities where (a) the security to be issued, if rated, is rated below investment grade,(b) not all outstanding rated securities of the issuer are rated investment grade or (c) not all outstanding rated securities of the toplevel registered holding company are rated investment grade; (iii) the entry into hedging arrangements by FirstEnergy which do not qualify for hedge accounting treatment by the FASB;(iv) the issuance by FirstEnergy of guarantees on behalf of its subsidiaries for the benefit of non-affiliated thirdparties; (v) the ability of FirstEnergy to make investments in EWGs and FUCOs in an amount over $1.5 billion; (vi) the ability of energy-related subsidiaries to engage in energy marketing outside of the U.S., Canada and Mexico; and (vii) the ability of energy-related subsidiaries to engage in the sale of infrastructure services anywhere outside the U.S. 4

5 14. FirstEnergy Corp. et al. (06/30/03) ( , ) Approves (i) the consolidation of FirstEnergy s service company functions into ServCo (as defined above),(ii) ServCo s policies and procedures, and (iii) a service agreement between ServCo and each subsidiary of FirstEnergy that requests service. Reserves jurisdiction over the participation of Jersey Central Power & Light Company in the service agreement between ServCo and FirstEnergy s subsidiaries. II. PUBLIC NOTICES 1. Unisource Energy Corporation (05/08/03) ( , ) Requests authorization for Unisource, a public utility holding company exempt under section 3(a)(1) of the Act and all other provisions of the Act, except section 9(a)(2), to acquire the operating electric and gas utility properties of Citizens Communications Company that are located in Arizona. Unisource also requests an order declaring it exempt from all the provisions of the Act, except section 9(a)(2), following consummation of the proposed acquisition. 2. Unitil Corporation et al. (05/16/03) ( , ) Requests authorization, through June 30, 2006, to (i) extend the operation of its money pool, and (ii) make additional short-term borrowings on a revolving basis to an aggregate amount of $55,000,000. Also requests authorization for Fitchburg Gas and Electric Light Company, a wholly owned subsidiary of Unitil, to make short-term borrowings from the Unitil money pool and direct borrowings from commercial banks in an aggregate principal amount not to exceed $35,000,000 from time-to-time through June 30, FirstEnergy Corp. et al. (06/02/03) ( , ) Requests various financing authorizations through December 31, See Release No above. 4. CenterPoint Energy, Inc., et al. (06/02/03) ( , ) Requests various financing authorizations through June 30, See Release No above. 5. Northeast Utilities, et al. (06/04/03) ( , ) Requests various financing authorizations through June 30, See Release No above. 6. Energy East Corp (06/24/03) ( , ) Requests authorization to organize a second wholly-owned subsidiary service company called Energy East Shared Services Corporation. III. NO ACTION LETTERS None to be reported. IV. MISCELLANEOUS None to be reported. The material is provided for informational purposes by Stroock & Stroock & Lavan LLP for clients and others who may be interested in the subject matter. For further information, or to receive the Bulletin by fax or , please contact Michael S. Shenberg, (212) , mshenberg@stroock.com or Jacob A. Pollack, (212) , jpollack@stroock.com.this Bulletin should not be taken or used as legal advice. Stroock s Energy and Project Finance Group is involved in all aspects of the energy and utility industries, including PUHCA counseling, power project development and finance, acquisitions and sales of projects, energy commodity trading contracts, restructurings and workouts, licensing and other environmental matters, tax planning and tax exempt financing, mergers and acquisitions of utilities, concessions and privatizations. Stroock & Stroock & Lavan LLP is a law firm with 350 attorneys and offices in New York, Los Angeles and Miami. STROOCK & STROOCK & LAVAN LLP NEW YORK LOS ANGELES MIAMI 180 MAIDEN LANE, NEW YORK, NY TEL FAX