Notice is hereby given that the following filing(s) has/have been made with the Commission pursuant to provisions of the Act and rules promulgated under the Act. All interested persons are referred to the application(s) and/or declaration(s) for complete statements of the proposed transaction(s) summarized below. The application(s) and/or declaration(s) and any amendment(s) is/are available for public inspection through the Commission's Branch of Public Reference.
Interested persons wishing to comment or request a hearing on the application(s) and/or declaration(s) should submit their views in writing by February 13, 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 February 13, 2001, the application(s) and/or declaration(s), as filed or as amended, may be granted and/or permitted to become effective.
Pinnacle West Capital Corporation (70-9745)
Pinnacle West Capital Corporation (“Pinnacle West”), located at 400 East Van Buren Street, Suite 700, Phoenix, Arizona 85004, an Arizona holding company exempt from registration under section 3(a)(1) of the Act by rule 2, has filed an application with the Commission under sections 9(a)(2) and 10 of the Act in connection with a proposed corporate reorganization (“Reorganization”). The Reorganization involves the relocation of certain generation assets from Arizona Public Service Company (“APS”), Pinnacle West's public-utility company subsidiary, to Pinnacle West Energy Corporation (“PWE”), a wholly owned nonutility subsidiary of Pinnacle West. As a result of the Reorganization, PWE will be a public-utility company within the meaning of the Act, and Pinnacle West will acquire an additional public-utility subsidiary.
Pinnacle West is engaged through subsidiaries in the generation, transmission, and distribution of Start Printed Page 7820electricity, the sale of energy services, real estate development, and venture capital investment. APS provides retail electric services principally in Arizona. In addition to the generation, transmission, and distribution of electricity, APS is presently engaged in power marketing activities. The Arizona Corporation Commission (“ACC”) regulates APS with respect to its retail rates, accounting, service standards, service territory, issuances of securities, siting of generation and transmission projects, and various other matters. The Federal Energy Regulatory Commission regulates APS' wholesale generation and interstate transmission rates, accounting, and certain other matters.
The purpose of the Reorganization is to comply with certain requirements set forth in rules adopted by the ACC that provide the framework for introduction of retail electric competition in Arizona (“Competition Rules”) and in a final ACC order approving APS' settlement with various parties with respect to implementation of the Competition Rules (“Settlement”). Under the Competition Rules and the Settlement, APS must separate its generating assets and competitive services from its transmission and distribution functions no later than December 31, 2002.
The principal transactions associated with the Reorganization are the following. First, APS will contribute certain of its fossil and solar generating facilities, assets and related operational agreements to one or more newly-formed wholly-owned subsidiaries (“Transitory Subsidiaries”). Second, APS will distribute (or cause to be distributed) all of the common stock of each Transitory Subsidiary to Pinnacle West. Third, the Transitory Subsidiaries will then be merged into PWE, with PWE as the surviving entity. It is contemplated that these transactions will occur simultaneously.
When the Reorganization is completed, APS' existing divisional structure, in which electric utility operations are divided along functional lines, will be formalized, and separate corporate entities will engage in the transmission/distribution of electricity and the generation of electricity. APS will become a “wires” company and will continue to own and operate its existing electric transmission and distribution system. PWE become a generating company and will own or lease and operate APS' generation assets and sell the output from these assets at wholesale to Power marketing and Trading (“Power Marketing”), a division of Pinnacle West. Power Marketing was previously a division of APS engaged primarily in the sale and purchase of electric capacity and energy in the wholesale market. Power Marketing sold excess power from APS' generation facilities and also purchased energy from other entities to meet APS' requirements to supply retail and wholesale customers. The Competition Rules and Settlement contemplate that APS will move its Power Marketing division to an affiliate. Accordingly, on October 1, 2000, Power Marketing became a division of Pinnacle West. It is expected that Power Marketing will sell power to APS as well as to non-affiliated power purchasers. APS will continue to provide transmission and distribution services at regulated rates, as well as provide energy to those retail customers in APS' existing service territory that do not elect to use an alternate retail power supplier.
Pinnacle West states that, after the Reorganization, it will continue to qualify for exemption from registration under section 3(a)(1) of the Act because Pinnacle West and each public-utility company from which it derives, directly or indirectly, any material part of its income, will be predominantly intrastate in character and will carry on their business substantially in Arizona, the state in which Pinnacle West and each such public-utility company is organized.Start Signature
For the Commission, by the Division of Investment Management, pursuant to delegated authority.
Margaret H. McFarland,
1. PWE was organized primarily to engage in the business of developing, owning and operating generation plants used for the production and sale of wholesale energy. PWE is currently engaged in the development of approximately 2,600 megawatts of generating capacity in Arizona.Back to Citation
2. Under the terms of the Competition Rules and the Settlement, retail choice for APS' retail customers is being phased in. All of APS' retail customers will be entitled to choose their retail power supplier beginning January 1, 2001.Back to Citation
3. Pinnacle West states that it will continue to file, under rule 2, annual exemption statements on Form U-3A-2 following the Reorganization.Back to Citation
[FR Doc. 01-2280 Filed 1-24-01; 8:45 am]
BILLING CODE 8010-01-M