Federal Register / Vol. 65, No. 123 / Monday, June 26, 2000 / Notices 39447

1 In a separate filing, Sierra Pacific also has asked

the Commission to approve the formation of a

subsidiary service company under section 13 of the

Act and rules 88, 90 and 91 under the Act See File

No. 70–9621. This separate filing is being noticed

contemporaneously with the Merger notice.

CATEGORIES OF RECORDS IN THE SYSTEM:

[CHANGE TO READ:] Information

needed to issue building access badges

to employees and contractors. This

information includes name, social

security number, date of birth, home

address, emergency contact name and

telephone number, image (photograph);

organization/office of assignment;

employee’s title and work number,

supervisor’s title and work number, and

security badge issue information such as

access level. The system also contains

information controlling the issuance of

accountable Postal Service property,

such as equipment and controlled

documents. That information includes

name, social security number,

equipment description, equipment

serial numbers, and issuance date.

* * * * *

PURPOSE(S):

[CHANGE TO READ:] To ensure

employee and building safety and

security by controlling access to Postal

Service buildings and facilities; and to

protect Postal Service accountable

property and equipment by controlling

issuance.

* * * * *

POLICIES AND PRACTICES FOR STORING,

RETRIEVING, ACCESSING, RETAINING, AND

DISPOSING OF RECORDS IN THE SYSTEM:

* * * * *

SAFEGUARDS:

[CHANGE TO READ:] Hard copy

records and computers containing

information within this system of

records are located in buildings and/or

areas with controlled access.

Information within computer systems is

protected by computer security

technology including the use of logon

IDs and passwords. Access to automated

and hard copy records is given on an

official need-to-know basis.

USPS 140.020

SYSTEM NAME:

Postage-Postage Evidencing System

Records, 140.020.

* * * * *

CATEGORIES OF RECORDS IN THE SYSTEM:

[CHANGE TO READ:] Customer name

and address, change of address

information, corporate business

customer information (CBCIS) number,

business profile information, estimated

annual postage and annual percentage

of mail by type, type of usage (customer,

postal, or government), post office

where mail is entered, license number,

date of issuance, ascending and

descending register values, device

identification number, device model

number, certificate serial number,

amount and date of postage purchases,

amount of unused postage refunded,

contact telephone number, date,

destinating five-digit ZIP Code and rate

category of each indicium created, and

transaction documents.

USPS 170.010

SYSTEM NAME:

Operations Data Collection SystemsWorkload/Productivity Management

Records, 170.010.

* * * * *

SYSTEM MANAGER(S) AND ADDRESS:

[CHANGE TO READ:] Senior Vice

President Operations, United States

Postal Service, 475 L’Enfant Plz SW,

Washington DC 20260–2700.

(Real-Time Productivity Management

System and Delivery Operations

Information System)

Other Covered Systems—the

department or facility head where such

records are required.

Stanley F. Mires,

Chief Counsel, Legislative.

[FR Doc. 00–16008 Filed 6–23–00; 8:45 am]

BILLING CODE 7710–12–P

SECURITIES AND EXCHANGE

COMMISSION

[Release No. 35–27189]

Filings Under the Public Utility Holding

Company Act of 1935, as Amended

(‘‘Act’’)

June 20, 2000.

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

July 14, 2000, 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 July 14, 2000, the

application(s) and/or declaration(s), as

filed or as amended, may be granted

and/or permitted to become effective.

Sierra Pacific Resources, et al. (70–

9619)

Sierra Pacific Resources (‘‘Sierra

Pacific’’), 6100 Neil Road, Reno, Nevada

89511, a public utility holding company

claiming exemption from registration

under section 3(a)(1) of the Act by rule

2, and Portland General Electric

Company (‘‘PGE’’), 121 SW Salmon

Street, Portland, Oregon 97204, a wholly

owned electric public utility subsidiary

company of Enron Corporation

(‘‘Enron’’), a holding company also

claiming exemption under section

3(a)(1) of the Act by rule 2, have filed

a joint application-declaration under

sections 6(a), 7, 9(a), 10, and 11(b) of the

Act and rule 54 under the Act.

Sierra Pacific proposes to acquire

from Enron all of the issued and

outstanding common stock of PGE and

PGH II, Inc. (‘‘PHG II’’), an indirect

subsidiary of Enron and an affiliate of

PGE (the ‘‘Merger’’). Sierra Pacific and

PGE (collectively, the ‘‘Applicants’’)

also request authority to: (1) Continue to

operate Sierra Pacific Power company

(‘‘SPPC’’), Sierra Pacific’s wholly owned

public utility subsidiary, as a

combination electric and gas public

utility; (2) retain SPPC’s existing waterutility business; (3) retain Sierra

Pacific’s, PGE’s and PHG II’s respective

nonutility subsidiary businesses; and (4)

issue securities in order to finance the

Merger. Following the Merger, Sierra

Pacific will register under section 5 of

the act.1

Under the terms of a Stock Purchase

Agreement dated as of November 5,

1999 (‘‘Stock Purchase Agreement’’) by

and between Sierra Pacific and Enron,

Enron will sell PGE and cause Portland

General Holdings, Inc., Enron’s wholly

owned subsidiary, to sell PGH II, to

Sierra Pacific for $2.1 billion in cash,

reduced by the book value of certain

obligations of Enron under an order of

the Oregon Public Utilities Commission

39448 Federal Register / Vol. 65, No. 123 / Monday, June 26, 2000 / Notices

2The Oregon PUC imposed these obligation on

Enron (‘‘Enron’s Merger Payment Obligations’’) in

its order dated June 4, 19997 approving Enron’s

acquisition of PGE.

3NEICO owns 50% of Northwind Las Vegas. UTT

Nevada, Inc., an affiliate of Unicom, owns the other

50%.

4NEICO owns 25% of Northwind Aladdin and

UTT Nevada, Inc. owns the other 75%.

5NEICO owns 50% of e.three CES and e-three

owns the other half.

6 In recent years, Sierra Pacific has sold several

of the LOS properties. The properties remaining

include only vacant land in Nevada and land leases

in the Lake Tahoe region.

7The FCC did not issue an order denying SPC’s

application within sixty days of the application

filing date. Therefore, under 47 CFR section 1.5004,

the application is deemed granted with no further

action by the FCC.

8NVP I and NVP II were used by Nevada Power

to issue Quarterly Income Preferred Securities.

(‘‘Oregon PUC’’).2 Sierra Pacific will

assume Enron’s Merger Payment

Obligations (as defined in footnote 2)

effective as of the Merger’s closing date.

A. Description of the Parties

1. Sierra Pacific

Sierra Pacific owns all of the common

stock of two public utility companies:

SPPC, a combination electric and gas

public utility company based in Reno,

Nevada; and Nevada Power Company

(‘‘Nevada Power’’), an electric public

utility company based in Las Vegas,

Nevada. For the year ended December

31, 1999, Sierra Pacific’s operating

revenues on a consolidated basis were

approximately $1.3 billion, of which

$9.1 million are attributable to

nonutility activities. Consolidated assets

of Sierra Pacific at December 31, 1999

were approximately $5.2 billion, of

which approximately $3.8 billion

consisted of net utility plant and

equipment. At December 31, 1999,

Sierra Pacific and it subsidiary

companies employed 3,250 employees,

of which 1,430 were employed by SPPC

and 1,677 by Nevada Power.

SPPC provides electric service to

approximately 302,000 retail customers

in northern Nevada and northeastern

California. SPPC also sells electric

power at wholesale. In the Reno/Sparks

area of northwestern Nevada, SPPC

distributes natural gas at retail to

approximately 110,000 customers. For

the year ended December 31, 1999,

SPPC had total consolidated assets of

approximately $2.1 billion, including

net utility plant in service of $1.6

billion, consolidated utility operating

revenues of approximately $764 million,

and consolidated net income of

approximately $66 million. During

1999, 83.9% of SPPC’s revenues were

from retail sales of electricity, natural

gas and water in Nevada, 5.1% from

retail sales of electricity in California,

and 9.9% from wholesale sales of

electricity and gas. SPPC’s 1999 electric

and gas operating revenues, which

totaled $709 million, were comprised of

its electric business ($609 million, or

86%) and its natural gas business ($100

million, or 14%). Of these 1999 electric

and gas operating revenues, $644

million, or 91%, were from sales n

Nevada and $65 million, or 9% were

from sales in California. SPPC is subject

to regulation by the Public Utilities

Commission of Nevada (‘‘Nevada

PUC’’), the California Public Utilities

Commission (‘‘California PUC’’), and the

Federal Energy Regulatory Commission

(‘‘FERC’’) under the Federal Power Act.

SPPC also provides water service to

about 71,000 customers. SPPC’s 1999

water business operating revenues were

$54.3 million.

Nevada Power provides retail electric

service to approximately 566,700

customers in Clark county, Nevada,

with limited additional service provided

to the Federal Department of Energy

(U.S. Government Test Site) in Nye

County, Nevada. Nevada Power also

sells electric power at wholesale. For

the year ended December 31, 19991,

Nevada Power and its subsidiary

companies had total consolidated assets

of approximately $3.4 billion, of which

approximately $2.4 billion consisted of

net electric plant and equipment,

consolidated utility operating revenues

of approximately $977 million, resulting

in a net income of approximately $52

million. Nevada Power is subject to

regulation by the Nevada PUC and the

FERC.

Sierra Pacific is engaged in nonutility

business through the following active

subsidiary companies: Tuscarora Gas

Pipeline Company (‘‘Tuscarora’’); Sierra

Energy Company d/b/a e.three

(‘‘e.three’’), Lands of Sierra, Inc.’’

(‘‘LOS’’); Sierra Pacific Communications

(‘‘SPC’’); Sierra Pacific Energy Company

(‘‘SPEC’’); Commonsite Inc.

(‘‘Commonsite’’); NVP Capital I (‘‘NVP

I’’); NVP Capital II (NVP II); Nevada

Electric Investment Company

(‘‘NEICO’’); Northwind Las Vegas, LLC

(‘‘Northwind Las Vegas’’); 3 Northwind

Aladdin, LLC (‘‘Northwind Aladdin’’),4

and e.three Custom Energy Solutions,

LLC (‘‘e.three CES’’).5

Tuscarora was formed in 1993 for the

purpose of entering into a partnership

(the Tuscarora Gas Transmission

Company, or ‘‘TGTC’’) with a subsidiary

of TransCanada, a non-affiliated

Canadian natural gas transportation

company, to develop, construct and

operate a natural gas pipeline to serve

an expanding gas market in Reno,

northern Nevada and northeastern

California. In 1995, completed

construction and began service of its

229-mile pipeline extending from

Malin, Oregon to Reno, Nevada. As an

interstate pipeline, TGTC provides only

transmission service. Sierra Pacific has

an investment of approximately $13.3

million in this subsidiary. During 1999,

SPCC was the largest customer of TGTC,

contributing 95% of TGTC’s revenues of

$19.3 million.

e.three provides energy-related

products and services in commercial

and industrial markets both inside and

outside SPPC’s service territory.

e.three’s services include: technology

and efficiency improvements to lighting,

heating, ventilation and air-conditioning

equipment; installation or retrofit of

controls and power quality systems;

energy performance contracting; enduse services; and ongoing energy

monitoring and verification services.

LOS develops and manages SPPC

nonutility property in Nevada and

California.6

SPC was created to examine and

pursue telecommunications

opportunities that leverage existing skill

sets of installing and deploying pipe

and wire infrastructure. SPC presently

has fiber optic assets deployed in the

cities of Reno and Las Vegas. Sierra

Pacific has filed an application with the

Federal Communications Commission

(‘‘FCC’’) to qualify SPC as an ‘‘exempt

telecommunications company’’ under

section 34 of the Act.7

SPEC was formed to market a package

of technology and energy-related

products and services in Nevada. For

the year ended December 31, 1999,

SPEC incurred net losses of $3.6

million.

Commonsite, NVPI and NVP II are

non-profit subsidiary companies created

to assist other business activities of

Sierra Pacific. Commonsite is a Nevada

corporation that owns the real estate

occupied by Reid Gardner 4, a coal fired

power plant owned jointly by Nevada

Power and the California Department of

Water Resources. NVP I and NVP II are

Delaware trusts formed by Nevada

Power for financing purposes.8 NEICO

is a Nevada corporation that has been

inactive for several years. In recent

months, it has obtained ownership

intersts in: Northwind Las Vegas;

Northwind Aladdin, and e.three CES.

Northwind Las Vegas develops

opportunities for district heating and

cooling within Nevada. As discussed

above, Northwind Aladdin will

construct, own and operate district

heating and cooling facilities at the

Aladdin casino complex, currently

under construction. e.three CES was

Federal Register / Vol. 65, No. 123 / Monday, June 26, 2000 / Notices 39449

9Nevada Power recently created several Nevada

limited liability companies that have conducted no

business activities but are in good standing. They

are: Nevada Power Services, LLC; Nevada Power

Choices, LLC; Nevada Power Solutions, LLC; Las

Vegas Energy, LLC; Nevada Solutions, LLC; Power

Choice, LLC; Nevada Power Energy Services, LLC;

and Nevada Choices, LLC. It is anticipated that one

or more of these companies will engage in

competitive energy markets.

10The remaining 1% interest is held by Portland

General Distribution Company, a wholly owned

direct subsidiary of PGH II described below.

11Sierra Pacific will file a separate applicationdeclaration to request additional financing

authority to maintain existing financing facilities

after the Merger and to meet the capital

requirements for the Sierra Pacific system after the

Merger (‘‘Financing Application’’).

formed to enter into performance

contracts and similar energy-related

services in southern Nevada.

Sierra Pacific also has the following

inactive nonutility subsidiary

companies, all of which are

incorporated in Nevada: Sierra Water

Development Company, formerly

engaged in water exploration; Sierra Gas

Holdings Company, formerly engaged in

gas and oil exploration; Great Basin

Energy Company, which was formed to

hold real estate for a proposed power

plant that was never constructed;

Genwal Coal Co.; Castle Valley

Resources Inc., formerly the sales arm of

Genwal Coal Co.; and Alkan Mining

Company.9

2. PGE

PGE provides retail electric service to

approximately 719,000 customers in

northwestern Oregon. PGE also sells

electric power at wholesale. For the year

ended December 31, 1999, PGE had

consolidated assets of approximately

$3.2 billion, of which approximately

$1.9 billion consisted of net electric

plant and equipment, consolidated

utility operating revenues of

approximately $1.4 billion, and net

income of approximately $128 million.

At December 31, 1999, PGE employed

approximately 2,787 employees. PGE is

subject to regulation by the Oregon PUC

and the FERC.

PGE owns all of the common stock of

the following nonutility subsidiary

companies, all of which are Oregon

corporations: 121 SW Salmon Street

Corporation (‘‘Salmon Street’’); Portland

General Transport Corp. (‘‘Portland

General Transport’’); and Salmon

Springs Hospitality Group (‘‘Salmon

Springs’’).

Salmon Street was formed in order to

lease an office complex at the World

Trade Center in Portland, Oregon and to

sublease the complex to PGE to serve as

PGE’s headquarters. A wholly owned

subsidiary of Salmon Street, World

Trade Center Northwest Corporation, is

an Oregon corporation that managers

the World Trade Center and promotes

international commerce. Portland

General Transport was formed to sell

segmented gas pipeline capacity and is

currently inactive. Salmon Springs

provides operations and catering

services to PGE and, to the extent

available, to third parties in meeting

facilities of the World Trade Center

Building Two.

3. PGH II

PGH II is engaged in developing

several nonutility lines of business. As

of December 31, 1999, PGH II had total

assets of $1,560,000, revenues of

$54,000, and a net less of $2,894.000.

PGH II holds a 99% ownership

interest in the following companies, all

of which the Oregon limited liability

companies 10: Columbia-Pacific

Distribution Services Company, LLC

(‘‘Columbia-Pacific’’); Enron

Distribution Services Company, LLC

(‘‘EDS’’); and Portland Energy Solutions

Company, LLC (‘‘PES’’).

Columbia-Pacific, currently inactive,

was established to provide operation

and maintenance service for utility

distributions systems. EDS, currently

inactive, was established to hold

investments in transmission and

distribution services companies to be

acquired. PES was established to

develop opportunities in district heating

and cooling in downtown Portland,

Oregon.

PGH II also holds all the outstanding

common stock of the following

subsidiary companies and currently

generate no material revenue and hold

de minimis assets: Columbia-Willamette

Development Company (‘‘ColumbiaWillamette’’); Enron MicroClimates, Inc.

(‘‘Eron MicroClimates’’); Portland

General Distribution Company (‘‘PGD’’);

Portland General Operations Company,

Inc. (‘‘PGO’’); and Tule Hub Services

Company (‘‘Tule Hub’’).

Columbia-Willamette formerly

engaged in real estate development and

is currently inactive. Enron

MicroClimates was formed to design,

own and operate heating, cooling and

network infrastructure. PGD was formed

to invest in companies providing

distribution and network services,

including operation and maintenance

services for utility distribution systems.

PGO provides consulting services to

global markets regarding design,

maintenance, management, and

financing for electric and

telecommunications facilities. Tule Hub

was formed to engage in electric trading

hub transaction information

management, and is currently inactive.

B. Description of the Merger

Under the Stock Purchase Agreement

described above, Sierra Pacific will

acquire from Enron all of the issued and

outstanding common stock of PGE and

PGH II for a consideration of $2.1 billion

in an all-cash transaction. The Merger is

not subject to the approval of the

shareholders of PGE, PHG II, Enron or

Sierra Pacific.

Sierra Pacific’s acquisition of PGE and

PGH II will result in a substantial level

of goodwill equal to the excess of

consideration to be paid to Enron over

the net value of assets acquired. Sierra

Pacific estimates this goodwill to be

approximately $845 million, which will

be amortized at the holding company

level over a forty-year period.

C. Description of Merger-Related

Financing

Sierra Pacific proposes to finance the

purchase price of PGE and PGH II

through a combination of various types

of short-term debt, long-term debt, and

other financing transactions.11

Specifically, for a period beginning with

the effective date of the Commission’s

Order in this matter and ending one

year from the date of that Order

(‘‘Authorization Period’’), Sierra Pacific

request authority to: (1) Issue long-term

debt securities, short-term debt

securities, commercial paper, hybrid

securities, and other debt securities for

cash; (2) enter into transactions to

manage interest rate risk (‘‘hedging

transactions’’); and (3) enter into credit

facilities or loan agreements with

commercial or investment banks, both

for purposes of direct borrowings and as

back-up for commercial paper programs.

The aggregate amount of short-term and

long-term debt outstanding at any one

time to finance the Merger will not

exceed $2.1 billion.

1. General Conditions of Financing

Sierra Pacific requests authority to

engage in various financing and related

transactions during the Authorization

Period for which the specific terms and

conditions are not at this time known.

The authorization is sought subject to

the conditions stated above and to the

following conditions: (1) The effective

cost of money on long-term debt

borrowing occurring under this

authorization will not exceed 300 basis

points over the comparable term U.S.

Treasury securities; (2) the effective cost

of money on short-term debt borrowing

occurring under this authorization will

not exceed 300 basis point over the

comparable term London Interbank

Offered Rate (‘‘LIBOR’’); (3) the maturity

39450 Federal Register / Vol. 65, No. 123 / Monday, June 26, 2000 / Notices

12This short-term debt will be paid off in part

with the proceeds of the planned divestiture of

SPPC’s and Nevada Power’s electric generation

assets, and the sale of common equity or certain

non-core assets, with the balance refinanced within

the Authorization Period through long-term debt

exclusively to refinance short-term debt or other

securities from the divestiture of certain non-core

assets. Sierra Pacific will request authority to issue

additional common equity in its Financing

Application.

13Sierra Pacific filed a form of the Sierra Pacific

Indenture with the Commission as part of a

universal shelf registration on June 8, 1999

(Registration No. 333–80149). Applicants state that

the Sierra Pacific Indenture will permit the issuance

of a wide variety of unsecured debt securities in one

or more series. The Sierra Pacific Indenture will

contain numerous variable terms, such as principal

amount, interest rate, redemption terms, sinking

funds, currency of payment, denominations, and

events of default. The Sierra Pacific Indenture

contains no negative covenants or restrictions.

On May 9, 2000, Sierra Pacific issued of $300

million of notes under this shelf registration.

Proceeds from this issuance were used to retire the

remaining balance of short-term debt incurred to

complete the merger of Sierra Pacific and Nevada

Power. Sierra Pacific expects to file a new universal

shelf registration for the issuance of long-term debt

authorized under this application-declaration and

may continue to use the Sierra Pacific Indenture for

any such issuance.

14On April 20, 2000, Sierra Pacific also issued

$300 million of floating rate notes that are not

related to this authorization request. The proceeds

of this issuance were used: (1) to reduce Nevada

Power’s debt and strengthen its capitalization; and

(2) to reduce short term debt at the holding

company level incurred to complete the merger of

Sierra Pacific and Nevada Power. 15Borrowings from banks and other financial

institutions will be unsecured debt and will rank

in pari passu with debt securities issued under the

Sierra Pacific Indenture and the short-term credit

facilities described above. Specific terms of any

borrowings will be determined by Sierra Pacific at

the time of issuance and will comply with the

parameters on financing authorization set forth

above. 16Sierra Pacific will only enter into interest rate

swap agreements with counter parties whose senior

debt ratings, as published by Standard & Poor’s, a

Division of The McGraw-Hill Companies, are

greater than or equal to ‘‘BBB+’’, or an equivalent

rating from Moody’s Investors Service, Inc., Fitch

IBCA, Inc., or Duff & Phelps Credit Rating Co.

of indebtness will not exceed 50 years;

(4) the underwriting fees, commissions,

or other similar remuneration paid in

connection with the non-competitive

issue, sale or distribution of a security

in this matter will not exceed 5% of the

principal or total amount of the security

being issued; and (5) the proceeds from

the sale of securities issued under this

authorization will be used (a) to pay the

consideration required in order to

consummate the Merger, (b) to refinance

short-term debt originally incurred to

raise all or a portion of the Merger

consideration; or (c) for general

corporate purposes.

2. Short-Term Debt Financing

Sierra Pacific requests Commission

authorization during the Authorization

Period to issue short-term debt

securities in an amount not to exceed

$2.1 billion, consisting of financing for

the Merger consideration. Sierra Pacific

anticipates that most of the Merger

consideration will be funded

temporarily through the use of shortterm debt.12 The short-term debt will

consist of one or more of the following:

bank borrowings, commercial paper,

money market notes, floating rate or

variable notes, all as described below.

Sierra Pacific currently maintains a

committed line of credit for $300

million under an unsecured revolving

credit facility with Mellon Bank, First

Union National Bank and Wells Fargo,

as syndication agents (‘‘Credit

Facility’’). This Credit Facility, the

amount of which is included in the

overall authorization requested above,

may be used for working capital and

general corporate purposes, including

for commercial paper backup. It is

anticipated that all or a portion of the

short-term debt used to fund the Merger

will be borrowed by Sierra Pacific either

through this credit Facility or through

one or more new facilities to be entered

into prior to the Merger.

Sierra Pacific also may sell

commercial paper in established

domestic or European commercial paper

markets to provide temporary funding of

the Merger consideration. This

commercial paper would be sold to

dealers at the discount rate or the

coupon rate per annum prevailing at the

date of issuance for commercial paper of

comparable quality and maturities sold

to commercial paper dealers generally.

It is expected that the dealers acquiring

commercial paper from Sierra Pacific

will reoffer such paper at a discount to

corporate, institutional and, with

respect to European commercial paper,

individual investors. The commercial

paper programs will be backed up by

the Credit Facility and by any new

credit facilities to be entered into by

Sierra Pacific, as discussed above.

Sierra Pacific also may incur shortterm debt through the issuance of

instruments customarily referred to as

‘‘money market notes,’’ ‘‘floating rate

notes’’ or ‘‘variable rate notes.’’ This

type of debt is usually issued under a

fiscal and paying agency agreement or

similar type of agreement, rather than

through an indenture, and bears an

interest rate that is either (a) tied to a

customary interest rate index such as

LIBOR which is adjusted on a periodic

basis or (b) set by an auction process.

The maturity of these notes may vary

from less than one year to up to three

years. Consequently, Sierra Pacific may

also issue these notes as long-term debt.

The specific terms of any notes issued

under this authorization will be

determined by Sierra Pacific at the time

of issuance.

3. Long-Term Debt Financing

Sierra Pacific requests Commission

authorization during the Authorization

Period to issue long-term debt securities

in an amount not to exceed $2.1 billion,

as stated above. Sierra Pacific intends to

use this long-term debt exclusively to

refinance short-term debt originally

incurred to finance the Merger. These

long-term debt securities would include

(a) unsecured notes, debentures,

medium-term notes, or other debt

securities issued under an indenture

(‘‘Sierra Pacific Indenture’’) 13, (b)

instruments customarily referred to as

‘‘money market notes,’’ ‘‘floating rate

notes,’’ or ‘‘variable rate notes,’’ as

described above, if those notes have a

maturity of greater than one year 14, or

(c) long-term loans from commercial or

investment banks under credit facilities

or loan agreements.15

4. Other Securities

In addition to the specific securities

described above, Sierra Pacific may also

find it necessary or desirable to

minimize financing costs or to obtain

new capital under then-existing market

conditions to issue and sell other types

of securities during the Authorization

Period. The issuance of any of these

securities would be subject to the

aggregate $2.1 billion limit on shortterm and long-term debt and to the

overall conditions on financing

authorization discussed above.

5. Interest Rate Risk Management

Devices

Sierra Pacific requests authority to

enter into, perform, purchase and sell

financial instruments intended to

manage the volatility of interest rates,

including but not limited to interest rate

swaps, caps, floors, collars and forward

agreements or any other similar

agreements. Sierra Pacific would

employ interest rate swaps as a means

of prudently managing the risk

associated with any of its outstanding

debt issued under this authorization by,

in effect, synthetically (a) covering

variable rate debt to fixed rate debt; (b)

covering fixed rate debt to variable rate

debt; (c) limiting the impact of changes

in interest rates resulting from variable

rate debt; and (d) providing an option to

enter into interest rate swap transactions

in future periods for planned issuances

of debt securities. In no case will the

notional principal amount of any

interest rate swap exceed that of the

underlying debt instrument and related

interest rate exposure.16

Federal Register / Vol. 65, No. 123 / Monday, June 26, 2000 / Notices 39451

17 In addition, Sierra Pacific requests that the

Commission find that this application is deemed to

constitute a filing on Form U–13–1 for purposes of

rule 88 under the Act, or, alternatively, that the

filing of a Form U–13–1 is not necessary under the

Act.

18See File No. 70–9619. The Commission’s notice

describing this filing is included elsewhere in this

Release.

19A more complete description of the Utility

Subsidiaries is set forth in the Merger U–1.

20PGH II is engaged in developing several

nonutility businesses through the following

subsidiary companies: Columbia-Willamette

Development Company; Enron MicroClimates, Inc.;

Portland General Distribution Company; Portland

General Operations Company, Inc.; and Tule Hub

Services Company. These subsidiary companies

currently generate no material revenue and hold de

minimis assets. PGH II also holds a 99% ownership

interest in the following limited liability

companies: Columbia-Pacific Distribution Services

Company, LLC; Eron Distribution Services

Company, LLC; and Portland Energy Solutions

Company.

21NEICO owns 50% of Northwind Las Vegas.

UTT Nevada. Inc., an affiliate of Unicom Thermal

Technologies, Inc., owns the other 50%.

22NEICO owns 25% of Northwind Aladdin and

UTT Nevada. Inc. owns the other 75%.

23NEICO owns 50% of e.three CES and e-three

owns the other half.

24Before the consummation of the Merger, SPRSC

will be incorporated in the State of Nevada to serve

as the service company for the Sierra Pacific

system.

Sierra Pacific Resources (70–9621)

Sierra Pacific Resources (‘‘Sierra

Pacific’’), 6100 Neil Road, Reno, Nevada

89511, a public utility holding company

claiming exemption from registration

under section 3(a)(1) of the Act by rule

2 (‘‘Applicant’’), has filed an application

under section 13(b) of the Act and rules

87, 88, 90, and 91 under the Act.

In this filing, Sierra Pacific requests

the Commission to authorize: (1) The

designation of Sierra Pacific Resource

Services Company (‘‘SPRSC’’) as a

subsidiary service company in

accordance with rule 88 under the Act;

(2) the provision of services by SPRSC

to the Sierra Pacific system following

Sierra Pacific’s proposed merger with

Portland General Electric Company

(‘‘PGE’’) (described below) and the

registration of Sierra Pacific as a holding

company under the Act; and (3) certain

lease transactions among associate

companies within the Sierra Pacific

system after the Merger, as described

below. Sierra Pacific further requests

that the Commission find that SPRSC is

organized and will conduct its

operations so as to meet the

requirements of section 13 of the Act

and the rules under the Act.17

In a separate filing, Sierra Pacific and

PGE, a wholly owned electric public

utility subsidiary company of Enron

Corporation, a public utility holding

company claiming exemption from

registration under section 3(a)(1) of the

Act by rule 2, seek approvals relating to

the proposed acquisition by Sierra

Pacific of PGE and PGE’s affiliate, PGH

II, Inc. (‘‘PGH II’’) (‘‘Merger U–1’’) 18

Sierra Pacific will register as a holding

company under the Act upon the

consummation of the acquisition

(‘‘Merger’’) described in the Merger U–

1.

Following the consummation of the

Merger, Sierra Pacific proposes to have

three operating public utility company

subsidiaries (the ‘‘Utility Subsidiaries’’):

(1) Sierra Pacific Power Company

(‘‘SPPC’’), a public utility company that

provides retail electric service in

Nevada and northeastern California,

sells electric power at wholesale,

distributes natural gas at retail in

northwestern Nevada, and provides

water service; (2) Nevada Power

Company (‘‘Nevada Power’’), a public

utility company that provides retail

electric service predominantly to the

residents of Clark County, Nevada,

provides limited service to the Federal

Department of Energy (U.S. Government

Test Site) in Nye County, Nevada, and

sells electric power at wholesale; and (3)

PGE, a public utility company that

provides retail electric power service in

northwestern Oregon and sells electric

power at wholesale.19

Sierra Pacific’s direct and indirect

nonutility subsidiary companies

following the Merger are to include the

following: PGH II; 20 Tuscarora Gas

Pipeline Company; Sierra Energy

Company d/b/a e.three (‘‘e.three’’);

Lands of Sierra, Inc.; Sierra Pacific

Communications Company; Sierra

Pacific Energy Company; Commonsite

Inc. (‘‘Commonsite’’); NVP Capital I

(‘‘NPV I’’); NVP Capital II (‘‘NVP II’’);

Nevada Electric Investment Company

(‘‘NEICO’’); Northwind Las Vegas, LLC

(‘‘Northwind Las Vegas’’) 21; Northwind

Aladdin, LLC (‘‘Northwind

Aladdin’’) 22; e.three CES Custom

Energy Solutions, LLC (‘‘e.three

CES’’).23; 121 SW Salmon Street

Corporation; Portland General Transport

Corp.; and Salmon Springs Hospitality

Group (collectively, with the Utility

Subsidiaries, the ‘‘Subsidiaries’’).

Sierra Pacific also owns the following

inactive subsidiary companies: Sierra

Water Development Company; Sierra

Gas Holdings Company; Great Basin

Energy Company; Genwal Coal Co.;

Castle Valley Resources, Inc.; and Alkan

Mining Company. In addition, Nevada

Power recently created several Nevada

limited liability companies that have

conducted no business activities but are

in good standing. They are: Nevada

Power Services, LLC; Nevada Power

Choices, LLC; Nevada Power Solutions,

LLC; Las Vegas Energy, LLC; Nevada

Solutions, LLC; Power Choice, LLC;

Nevada Power Energy Services, LLC;

and Nevada Choices, LLC.

After the Merger, SPRSC proposes to

provide the Sierra Pacific system

companies with a variety of

administrative, management,

enegineering, construction,

environmental and support services,

either directly or through agreements

with associate or nonassociate

companies, as needed.24 SPRSC will

enter into a services agreement with

each of the Subsidiaries (the ‘‘Services

Agreement’’). The Services Agreement

will be administered in accordance with

the Act and the rules under the Act, and

the cost of services payable to SPRSC

under the Services Agreement will be

computed in accordance with the

applicable rules under the Act and with

appropriate accounting standards. Sierra

Pacific presently expects that SPRSC

will be staffed with personnel drawn

from Sierra Pacific, SPPC, Nevada

Power, and PGE. Sierra Pacific has not

yet determined the numbers of SPRSC

personnel that will be drawn from each

of these companies.

SPRSC’s authorized capital stock will

consist of 100 shares of common stock,

no par value per share, issued to Sierra

Pacific for $1,000. upon consummation

of the Merger, Sierra Pacific will hold

all issued and outstanding shares of

SPRSC common stock. Sierra Pacific

will describe any debt financing for

SPRSC in a separate applicationdeclaration to be filed with the

Commission dealing with the financing

of the post-Merger Sierra Pacific holding

company system.

Sierra Pacific further requests

authorization under section 13(b) of the

Act for the Subsidiaries to enter, from

time to time, into leases of office or

other space with other associate

companies. These leases will comply

with the requirements of rules 87, 90

and 91 under the Act. The Utility

Subsidiaries may also provide to one

another any services, construction, or

goods as are reasonably required to meet

a breakdown or other emergency in

accordance with the standards of rule

87(b)(2) under the Act. These services

will be provided at cost in accordance

with the standards of the Act and rules

87, 90 and 91 under the Act.

For the Commission by the Division of

Investment Management, pursuant to

delegated authority.

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 00–16062 Filed 6–23–00; 8:45 am]

BILLING CODE 8010–01–M