[Federal Register Volume 66, Number 33 (Friday, February 16, 2001)]
[Notices]
[Pages 10763-10765]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 01-3916]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 35-27343]


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

February 9, 2001.
    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 March 6, 2001, 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 March 6, 2001, the application(s) and/or 
declaration(s), as filed or as amended, may be granted and/or permitted 
to become effective.

CMS Energy Corporation (70-9843)

    CMS Energy Corporation (``CMS Energy''), Fairlane Plaza South, 330 
Town Center Drive, Suite 1100, Dearborn, Michigan 48126, a Michigan 
public-utility holding company claiming exemption under section 3(a)(1) 
of the Act by rule 2, has filed an application under sections 9(a)(2) 
and 10 of the Act.
    CMS Energy proposed to acquire indirectly, through Consumers Energy 
Company (``Consumers Energy''), its public utility subsidiary, all of 
the voting securities of Michigan Electric Transmission Company 
(``Michigan Transco''), a currently inactive Michigan corporation. In 
exchange for these voting securities, Consumers Energy intends to 
transfer its ownership interest in certain transmission facilities 
(``Transmission Assets'') to Michigan Transco (``Transfer''). The 
Transmission Assets, which will be transferred at their actual 
depreciated value, consist of: transmission lines (including towers, 
poles, and conductors); transformers with voltage ratings of 120kV and 
above; generation tie lines from the transmission grid to the point of 
connection to the generator step-up transformers; associated voltage 
control devices and power flow control devices; associated transmission 
substations; and spare transmission equipment. Upon acquiring the 
Transmission Assets, Michigan Transco will become a public-utility 
company within the meaning of the Act.
    CMS Energy states that the Transfer is designed to allow Consumers 
Energy, in the future, either to sell its transmission system to an 
unaffiliated third-party or transfer control of it to a regional 
transmission organization. It is stated that the formation of Michigan 
Transco is expected to create synergies that result in better regional 
transmission service. Consumers Energy states that it intends to 
continue to provide electric generation and distribution services to 
retail customers.
    After the Transfer, Consumers Energy will claim, and CMS Energy 
will continue to claim, exemption from registration by rule 2, under 
sections 3(a)(2) and 3(a)(1) of the Act, respectively.

Ameren Corporation, et al. (70-9805)

    Ameren Corporation (``Ameren''), a registered holding company, and 
its two wholly owned combination gas and electric utility subsidiaries, 
Union Electric Company (``UE''), both located at 1901 Chouteau Avenue, 
St. Louis, Missouri 63103, and Central Illinois Public Service Company 
(``CIPS''), 607 East Adams Street, Springfield, Illinois 62739 
(collectively, ``Applicants''), have filed an application-declaration 
under sections 6(a), 7, 9(a), 10, 12(b), 12(c), 12(d) and 12(f) of the 
Act and rules 43, 44, 45, 46 and 54 under the Act.
    Ameren owns all of the issued and outstanding common stock of UE 
and

[[Page 10764]]

CIPS. Together, UE and CIPS provide retail and wholesale electric 
service to approximately 1.5 million customers and retail natural gas 
service to approximately 300,000 customers in Missouri and Illinois. UE 
owns and operates certain utility assets and provides electric service 
and natural gas service in both Missouri and Illinois. Authorization is 
sought for certain transactions (``Asset Transfer'') that would result 
in the acquisition by CIPS of UE's electric transmission assets in 
Illinois other than those associated with UE's Venice, Illinois 
generating plant and UE's electric distribution assets in Illinois 
(``T&D Assets''), and UE's retail gas distribution facilities in 
Illinois (``Gas Facilities'' and together with T&D Assets, ``Acquired 
Assets''). In connection with the Asset Transfer, CIPS would assume 
certain obligations of UE that are associated with the Acquired Assets.
    Applicants propose to transfer approximately one-half of the 
Acquired Assets (``Transferred Assets'') from UE directly to CIPS in 
return for a promissory note to be issued by CIPS in an amount equal to 
approximately one-half of the total net book value of the Acquired 
Assets, net of liabilities.\1\ The promissory note would have a market 
rate of interest based on interest rates charged for generally 
comparable unsecured five-year notes issued by companies whose credit 
quality and bond ratings are comparable to those of CIPS. Applicants 
state that the initial term of the promissory note would be five years.
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    \1\ The estimated net book value of the Transferred Assets is 
approximately $51 million.
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    The remaining balance (approximately one-half) of the Acquired 
Assets (``Dividend Assets'') and associated liabilities would be 
transferred by a dividend from UE to Ameren and the subsequent 
contribution of those assets and associated liabilities by Ameren to 
CIPS.\2\ Upon the Asset Transfer, CIPS would assume responsibility for 
serving electric and gas customers in Illinois that are currently 
served by UE, and UE would no longer provide regulated utility services 
in Illinois. The result of the Asset Transfer would be to consolidate 
the utility operations of Ameren in Illinois in a single entity.
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    \2\ The estimated net book value of the Dividend Assets is 
approximately $51 million.
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    Specifically, Applicants request authorization for: (1) UE to 
transfer the Transferred Assets directly to CIPS; (2) UE to transfer 
the Dividend Assets to Ameren through an in-kind dividend on its common 
stock; (3) Ameren to contribute the Dividend Assets to CIPS by making a 
capital contributions to CIPS; (4) CIPS to acquire the Acquired Assets; 
(5) CIPS to assume certain liabilities of UE that are associated with 
the Acquired Assets,\3\ and to issue a subordinated promissory note in 
an amount equal to the book value of the Transferred Assets to UE as 
payment for the Transferred Assets; and (6) UE to acquire and hold the 
promissory note to be issued by CIPS.
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    \3\ UE would also assign all related obligations to CIPS, 
including the certificates of public convenience and necessity 
granted by the Illinois Commerce Commission, environmental permits 
and obligations, all municipal and county franchises, labor 
agreements (as applicable), and any other relevant agreements that 
exist as of the transfer date.
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    Applicants note that separate filings have been made with the 
Illinois Commerce Commission relating to transfer of the T&D Assets and 
to transfer of the Gas Facilities. As a result, it is possible that the 
transfer may not coincide. If this is the case, Applicants contemplate 
the Asset Transfer would take place in two stages with the exchange of 
two separate promissory notes. The promissory note associated with 
transfer of the T&D Assets only would be approximately $46 million and 
the dividend would be approximately $46 million. Conversely, the 
promissory note associated with transfer of the Gas Facilities only 
would be approximately $5 million and the related dividend would 
approximately $5 million.
    Applicants state that the Asset Transfer would simply regulation of 
UE by eliminating regulatory jurisdiction of the Illinois Commerce 
Commission over its activities. Applicants further state that by 
transferring responsibility for serving certain retail electric service 
customers in Illinois from UE to CIPS, the Asset Transfer also would 
enable UE to meet its obligations to provide electric service in the 
next few years without acquiring additional generation facilities and 
alleviate UE's projected electric generation capacity deficit in a 
manner beneficial to its Missouri retail electric service customers. 
Applicants state that the combination of the utility assets of UE in 
Illinois with the utility assets of CIPS would result in efficiencies 
and economies through elimination of duplicative regulatory burdens, 
and would produce savings for the benefit of the public, consumers and 
investors of CIPS.

The Southern Company (70-8789)

    The Southern Company (``Southern''), 270 Peachtree Street, N.W., 
Atlanta, Georgia 30303, a registered holding company, has filed a post-
effective amendment under sections 6(a) and 7 of the Act and rules 53 
and 54 under the Act, to a previously filed application-declaration.
    By order dated March 13, 1996 (HCAR No. 26489), Southern was 
authorized to issue and sell, from time to time through April 1, 2001, 
short-term and/or term-loan notes (together, ``Notes'') and/or 
commercial paper (``Commercial Paper'') in an aggregate principal 
amount not to exceed $2 billion outstanding at any time. At December 
31, 2000, Southern had Commercial Paper and Notes evidencing bank 
borrowings in an aggregate principal amount of $558,000,000. Southern 
now proposes to extend its authority to issue the Notes and/or 
Commercial Paper to April 1, 2008 (``Authorization Period''). The 
aggregate principal amount of Notes and Commercial Paper, including the 
amount presently outstanding, will not exceed $2 billion at any time 
during the Authorization Period. All Notes and Commercial Paper are 
unsecured.
    Southern proposes to effect short-term and term-loan borrowings 
from one or more lending institutions (``Banks''). These borrowings 
will be evidenced by either Notes, dated as of the date of the 
borrowings, and maturing not more than seven years after the date of 
issue, or ``grid'' Notes, evidencing all outstanding borrowings from 
each lender, dated as of the date of the initial borrowings, and 
maturing in not more than seven years after the date of issue. Southern 
proposes that it may provide that Notes may not be prepayable, or that 
it may be prepaid with payment of a premium that is not in excess of 
the stated interest rate on the Note to be prepaid. Borrowings from 
Banks will be at: (1) The prevailing rate offered to corporate 
borrowers of similar quality, which will not exceed the prime rate, (2) 
the London Interbank Offered Rate plus up to three percent or (3) a 
rate not to exceed the prime rate to be established by bids obtained 
from lenders prior to a proposed borrowing.
    Southern may pay a commitment fee based upon the unused portion of 
each Bank's commitment. The total fee is determined by multiplying the 
unused portion of the Bank's commitment by up to one-half of one 
percent. Compensating balances may be used in lieu of fees to 
compensate certain Banks.
    Southern proposes to issue Commercial Paper in the form of 
promissory notes with varying maturities not to exceed one year. These 
maturities may be subject to extension to a final maturity not to 
exceed 390 days. Actual maturities will be determined by market 
conditions, the

[[Page 10765]]

effective interest costs and Southern's anticipated cash flow, 
including the proceeds of other borrowings, at the time of issuance. 
Commercial paper will be issued in denominations of not less than 
$50,000 and, by their terms, will not be prepayable prior to maturity.
    Southern proposes to sell the Commercial Paper directly or through 
a dealer or dealers. The discount rate (or the interest rate), 
including any commissions, will not be in excess of the discount rate 
per annum (or equivalent interest rate) prevailing at the date of 
issuance for Commercial Paper of comparable quality and maturity sold 
to Commercial Paper dealers.
    No commission or fee will be payable in connection with the 
issuance and sale of Commercial Paper, except for a commission, payable 
to the dealer, not to exceed one-eighth of one percent per annum in 
respect of Commercial Paper sold through the dealer as principal. The 
dealer will reoffer this Commercial Paper at a discount rate up to one-
eighth of one percent per annum less than the prevailing discount rate 
to the issuer or at an equivalent cost if sold on an interest-bearing 
basis.
    Southern proposes to use the proceeds of the Notes and Commercial 
Paper to (1) acquire the securities of companies in transactions either 
authorized in separate proceedings or exempt from the Act, (2) fund 
additional investments, directly or indirectly, in one or more exempt 
wholesale generators (``EWGs''), as defined in section 32 of the Act, 
foreign utility companies (``FUCOs''), as defined in section 33 of the 
Act, or exempt telecommunications companies, as defined in section 34 
of the Act, (3) provide bridge financing for other equity investments 
in Southern's wholesale generation subsidiary or (4) to pay for 
environmental and other contingencies.
    Any short-term borrowings outstanding after March 31, 2008 will be 
retired from internal sources of cash or the proceeds of financings 
approved in separate filings, refinancings of EWG and FUCO indebtedness 
on a non-recourse basis and other distributions from EWGs and FUCOs.

    For the Commission, by the Division of Investment Management, 
pursuant to delegated authority.
Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 01-3916 Filed 2-15-01; 8:45 am]
BILLING CODE 8010-01-M