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Notice

Filings Under the Public Utility Holding Company Act of 1935, as Amended (“Act”)

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Start Preamble May 4, 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 May 29, 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 May 29, 2001, the application(s) and/or declaration(s), as filed or as amended, may be granted and/or permitted to become effective.

Alabama Power Company et al. (70-8461)

Alabama Power Company (“Alabama”), 600 North 18th Street, Birmingham, Alabama 35291, Georgia Power Company (“Georiga”), 333 Piedmont Avenue, N.E., Atlanta, Georgia 30308, Gulf Power Company Start Printed Page 23954(“Gulf”), 500 Bayfront Parkway, Pensacola, Florida 32501, Mississippi Power Company (“Mississippi”), 2992 West Beach, Gulfport, Mississippi 39501, and Savannah Electric and Power Company (“Savannah”), 600 East Bay Street, Savannah, Georgia 31401, (together, “Operating Companies”) all electric public utility subsidiaries of The Southern Company, a registered holding company, have filed a post-effective amendment under sections 6(a) and 7 of the Act and rule 54 under the Act.

By order dated December 7, 1998 (HCAR No. 26949) (“December 1998 Order”), Alabama received authority ot issue $500,000,000 in preferred securities through December 31, 2005. Alabama has issued $50,000,000 in preferred securities under this authorization to date. Alabama now requests an extension of time to issue the remaining $450,000,000 in preferred securities through June 30, 2007 (“Authorization Period”).

Georgia received authority in the December 1998 Order to issue $310,750,000 in preferred securities through December 31, 2005. Georgia has issued $310,750,000 in preferred securities under this authorization to date. Georgia now requests authority to issue an additional $389,250,000 for an aggregate amount of $500,000,000 in preferred securities and an extension of time to issue these securities through the Authorization Period.

By order dated January 16, 1998 (HCAR No. 26817), Gulf received authority to issue $50,000,000 in preferred securities through December 31, 2005. Gulf has issued $45,000,000 in preferred securities under this authorization to date. Gulf now requests authority to issue an additional $95,000,000 for an aggregate amount of $100,000,000 in preferred securities and an extension of time to issue these securities through the Authorization Period.

Mississippi received authority to issue $75,000,000 in preferred securities through December 31, 2005. Mississippi has not issued any of these securities to date. Mississippi now requests authority to issue an additional $25,000,000 for an aggregate of $100,000,000 in preferred securities and an extension of time to issue these securities through the Authorization Period.

Savannah currently has no authority to issue preferred securities. Savannah received authority under the December 1998 Order to issue $40,000,000 in preferred securities and has issued the total amount authorized. Savannah now requests authority to issue an additional $50,000,000 in preferred securities through the Authorization Period.

The Operating Companies will use the proceeds from the sale of the preferred securities in connection with their ongoing construction programs, to pay scheduled maturities and/or refundings of their securities, to repay short-term indebtedness to the extent outstanding and for other general corporate purposes.

National Grid Group plc, et al (70-9829)

National Grid Group plc (“National Grid”), a registered holding company, located at 15 Marylebone Road, London, NW15JD, United Kingdom, together with its direct and indirect registered holding company subsidiaries (“Intermediate Companies”) National Grid (US) Holdings Limited, National Grid (US) Investments, both located at 15 Marylebone Road, London, NW15JD, United Kingdom, National Grid (Ireland) 1 Limited, National Grid (Ireland) 2 Limited, both located at 6 Avenue Pasteur, L 2310, Luxembourg, National Grid General Partnership, located on the 8th Floor of the Oliver Building, 2 Oliver Street, Boston, Massachusetts 02109, and National Grid USA, a registered holding company, a direct subsidiary of National Grid General Partnership and an indirect subsidiary of the other Intermediate Companies (collectively, “Applicants”), located at 25 Research Drive, Westborough, Massachusets 01582, have filed an application-declaration under sections 6(a) 7, 9(a), 10, 12(b) and 12(f) of the Act and rules 45(a) and 54 under the Act.

Applicants request authority for National Grid to increase the aggregate amount of convertible bonds that it may issue through May 31, 2003 (“Authorization Period”) to $2 billion.[1] National Grid will continue to maintain an overall $4 billion limit on the securities it issues, excluding guaranties. The convertible bonds would be exchangeable into ordinary shares of other securities.[2] Consistent with the terms of the Prior Order, the interest rate on these debt securities would not exceed 300 basis points over that for U.S. treasury securities having comparable maturities,[3] and the maturities of these debt securities would not exceed fifty years. Applicants state that these additional bonds would be issued and sold if market conditions are favorable, and the proceeds from these sales would be used to retire existing debt and for purposes previously approved by the Commission in the Prior Order.[4]

Applicants also request authority, through the Authorization Period, for National Grid and its subsidiaries that are outside of the National Grid USA ownership chain, including National Grid Holdings Limited and its direct and indirect subsidiaries (collectively, “FUCO Subsidiaries”), to acquire the debt securities of the Intermediate Companies and National Grid USA. The intrasystem loans would be unsecured and would have short-, medium- and long-term maturities depending on how the proceeds would be used. Short-term loans would be less than one year in maturity, medium-term loans would have maturities up to five years, and long-term loans would have maturities of up to fifty years. Loans to National Grid USA from any company in the National Grid system would be at interest rates designed to parallel the effective cost of debt capital of National Grid. Applicants state that the interest rates paid by National Grid USA on these loans should not result in an increase in the cost of capital used by the National Grid USA group and that, if it is discovered that this lending rate is higher than the cost of funds National Grid USA would incur in a direct borrowing at that time from nonassociates, the interest rate applied to National Grid USA borrowings would be based on that lower cost of funds. The maturities of borrowings by the Intermediate Companies from National Grid or a FUCO Subsidiary may be short-, medium- or long-term. All of the proposed borrowings would be unsecured. The proceeds of these loans would be used to meet the short-term working capital requirements of National Grid USA and its subsidiaries.Start Printed Page 23955

Further, Applicants request authority for the Intermediate Companies, through the Authorization Period, to enter into currency derivatives with National Grid and the FUCO Subsidiaries. National Grid represents that these transactions will meet the criteria established by the Financial Accounting Standards Board in order to qualify for hedge-accounting treatment, or will so qualify under generally accepted accounting principles in the United Kingdom (“U.K. GAAP”). If these proposed transactions qualify for hedge accounting treatment under U.K. GAAP, but not under generally accepted accounting principles in the United States (“U.S. GAAP”), National Grid's financial statements filed in accordance with Form 20-F will contain a reconciliation of the difference between the two methods of accounting treatment. National Grid further states that no gain or loss on a hedging transaction attributable to a company outside the National Grid USA Group will be allocated to any company in the National Grid USA Group, regardless of the accounting treatment accorded to the transaction. These proposed derivative transactions are designed to facilitate the equity financing of the Intermediate Companies and accommodate foreign exchange hedging. Applicants state that losses incurred by any Intermediate Company in connection with these swaps, and the associated tax effects, would not be transferred down the Intermediate Company chain to National Grid USA, and consequently would not adversely affect National Grid USA or any of its subsidiaries.

The Commission's equity capitalization standard and all other terms of the Prior Order, with the exception of the proposed increase in the aggregate amount of convertible bonds to be issued, would continue to apply.

Start Signature
For the Commission, by the Division of Investment Management, pursuant to delegated authority.

Margaret H. McFarland,

Deputy Secretary.

End Signature End Preamble

Footnotes

1.  By order dated March 15, 2000. The Commission authorized National Grid to, among other things, issue up to $1 billion in convertible bonds through the Authorization Period, subject to the limitation that the aggregate amount at any one time outstanding of all its equity and debt securities will not exceed $4 billion. See National Grid Group plc, HCAR No. 27154 (“Prior Order”).

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2.  Applicants state that it is presently intended that the bonds would be exchangeable for ordinary shares of Energis plc, a National Grid subsidiary engaged in telecommunications in the U.K. and certain other countries.

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3.  If the debt securities are issued in a non-U.S. currency, the rate would be based on the government benchmark for the related currency.

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4.  Specifically, Applicants state that National Grid would use the proceeds from these sales to acquire, retire, or redeem securities issued by National Grid or its United States subsidiaries, or for necessary and urgent corporate purposes such as extending or renewing debt related to its prior acquisition of New England Electric System Merger-Related Debt, financing capital expenditures by its subsidiaries, financing the working capital requirements of its system, acquiring or funding the operations of exempt wholesale generators and foreign utility companies.

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[FR Doc. 01-11799 Filed 5-9-01; 8:45 am]

BILLING CODE 8010-01-M