EXHIBIT G-1
New Century Energies, Inc., et al. (70-9007)
New Century Energies, Inc. ("NCE"), it service company subsidiary, New
Century Services, Inc., and its non-utility holding company subsidiary, New
Century Enterprises, Inc., together with Public Service Company of Colorado, a
Colorado public utility company ("PSCo"), Cheyenne Light, Fuel and Power Company
("Cheyenne"), WestGas Interstate Inc., New Century International Inc. and its
subsidiary companies ("New Century International"), e prime, inc. and its
subsidiary companies ("e prime"), PS Colorado Credit Corporation ("PSCCC"),
Natural Fuels Corporation, PSRI Investments, Inc., Green & Clear Lakes Company
and 1480 Xxxxxx, Inc., each of 0000 Xxxxxxxxxxx Xxxxxx, Xxxxxx, Xxxxxxxx 00000
and Southwestern Public Service Company, a New Mexico public utility company
("SPS" and together with PSCo and Cheyenne, the "Utility Subsidiaries"), Utility
Engineering Corporation and its subsidiary companies and Quixx Corporation and
its subsidiary companies ("Quixx"), each of Xxxxx at Sixth, Amarillo, Texas
79101 (together, "Applicants")(all subsidiaries, "Subsidiaries")(all subsidiary
companies, excluding the Utility Subsidiaries, the "Non-Utility Subsidiaries")
have filed a joint application/declaration under sections 6, 7, 9, 10, 12(b),
12(c), 12(e), 12(f), 32 and 33 and rules 42, 43, 45, 52, 53 and 54 thereunder.
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The Applicants are seeking, for the period from the effective date of
an order in this matter through December 31, 1999 (the "Authorization Period"),
as more fully described below, Commission authorization for: (1) external
financings by NCE, including (a) common stock financing, (b) short-term
financing and (c) reservation of authority over the issuance of other
securities; (2) financing by the Utility Subsidiaries, including (a) short-term
debt, (b) interest rate swaps and (c) reservation of authority over the issuance
of other securities; (3) financing by the Non-Utility Subsidiaries; (4)
intrasystem financing of Subsidiaries, including (a) open account advances, long
term loans and/or capital stock purchases and (b) guarantees; (5) changes in
capital stock of the Subsidiaries; (6) the formation and retention of financing
entities and the issuance of securities by such entities; (7) certain existing
financing arrangements; and (8) financing for the purpose of investing in exempt
wholesale generators ("EWGs") and foreign utility companies ("FUCOs").
The Applicants request authority to engage in various financing and
related transactions, for a period from the effective date of an order in this
matter through December 31, 1999, for which the specific terms and conditions
are not at this time known. The following general terms will be applicable,
where appropriate, to the financing transactions for which authorization is
sought: (1) the effective cost of money on financings authorized in this
proceeding will not ex-
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ceed, for long-term debt, 300 basis points over the rate borne by comparable
term U.S. Treasury securities, and for short-term debt, 300 basis points over
the London interbank offered rate; (2) the effective cost of money for preferred
stock and other fixed income oriented securities will not exceed 500 basis
points over the interest rate borne by 30 year term U.S. Treasury securities;
(3) the maturity of authorized indebtedness will not exceed 50 years; and (4)
issuance expenses in connection with an offering of securities, including any
underwriting fees, commissions or other similar compensation, may not exceed 5%
of the total amount of the securities being issued.
The proceeds of the proposed financings will be used for general and
corporate purposes including: (a) capital expenditures of NCE and its
Subsidiaries, (b) the repayment, redemption, refunding or repurchase of debt and
capital stock of NCE or its Subsidiaries, (c) financing working capital
requirements, and (d) other lawful general purposes. Financing may not be used
to invest in an EWG or a FUCO unless, at the time of each financing transaction
to be used for such purposes, NCE is in compliance with the requirements of
rules 53 and 54 under the Act. No financing proceeds will be used to acquire a
new subsidiary except pursuant to an order of the Commission or an available
exemption under the Act. Any deviation from these conditions would require
further Commission approval.
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The proposed transactions and the proposed participation of the various
Applicants are described below.
1. External Financing by NCE. During the Authorization Period NCE
proposes from time to time to issue and sell pursuant to the authorization
requested by the Application an aggregate amount of up to $175,000,000 of common
stock to be used for general purposes and an additional $360,000,000 in
connection with the refinancing of certain acquisition indebtedness; and a
maximum of 30 million shares of common stock (and awards or options for such
common stock) pursuant to benefit plans and the dividend reinvestment plan for a
period of ten years from the date of the Commission's order; proposes that the
aggregate amount of short-term debt issued pursuant to the authorization not
exceed $100,000,000 outstanding at any time during the Authorization Period,
such amount to be increased by an additional $125,000,000 upon the occurrence of
certain corporate restructurings and requests the Commission to reserve
jurisdiction over the issuance and sale of other securities as market conditions
may warrant. Securities may be sold through underwriters or dealers, directly to
a limited number of purchasers, or through agents.
a. Common Stock. NCE proposes to issue and sell common stock, including
in financings. NCE also proposes to issue and sell common stock under benefit
plans and dividend reinvestment plans in existence or to be adopted.
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Such shares may be newly issued shares, treasury shares or shares purchased in
the open market. NCE may also buy back shares of such stock or such other
securities during the Authorization Period.
b. Short-term Debt. NCE proposes to issue and sell commercial paper in
established domestic or European commercial paper markets to dealers at the
discount rate prevailing at the date of issuance for comparable commercial
paper. The dealers would reoffer such commercial paper at a discount to
investors. NCE also proposes to establish back-up lines of credit providing for
borrowings from time to time when it is impracticable to issue commercial paper.
Such lines of credit would be in an aggregate principal amount not to exceed the
amount of authorized commercial paper, and borrowings under these lines would
mature not more than one year from the date of borrowing. NCE also proposes to
engage in other types of short-term financing generally available to borrowers
with investment grade credit ratings as it may deem appropriate.
Upon PSCCC becoming a direct subsidiary of NCE, NCE shall increase its
then existing lines of credit and add PSCCC as a borrower thereunder or,
together with PSCCC, establish a new line of credit to provide credit support
for PSCCC's commercial paper. Authority is requested for PSCCC to finance its
business.
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c. Other Securities. In addition to the specific securities for which
authorization is sought, NCE also proposes to issue other types of securities
necessary or desirable to respond to market conditions during the period of the
Commission's authorization. NCE requests that the Commission reserve
jurisdiction over the issuance of additional types of securities and the amounts
thereof. NCE also undertakes that it will file a post-effective amendment in
this proceeding describing the general terms of each such security and the
amounts thereof and obtain a supplemental order of the Commission authorizing
the issuance thereof by NCE.
2. Utility Subsidiary Financings. The Utility Subsidiaries request
authorization to engage in certain external financings which are outside the
scope of the Rule 52 exemption for financings of utility companies, interest
rate swaps and other securities.
a. Short-term debt. In addition to short-term debt which may be issued
without Commission approval pursuant to an exemption under the Act,
authorization is sought for Cheyenne to issue and sell short-term debt in an
aggregate amount not to exceed $25,000,000 outstanding at any time during the
Authorization Period. Cheyenne may issue commercial paper in established
domestic or European commercial paper markets or otherwise issue and sell
short-term debt in a manner similar to NCE as discussed above.
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b. Interest Rate Swaps. Each Utility Subsidiary may engage in interest
rate swaps involving its obligations existing at the date of the swap.
c. Other Securities. The Commission is requested to reserve
jurisdiction over the issuance and sale of other securities in the same manner,
and subject to the same conditions, as requested for NCE.
3. Non-Utility Subsidiary Financings. Authorization is sought to allow
PSCCC to continue its medium-term note program under which an aggregate amount
of notes not to exceed $150,000,000 could be outstanding at any one time. The
Commission is also requested to reserve jurisdiction over the issuance and sale
of securities by the Non-Utility Subsidiaries that are not exempted by Rule 52
from the requirement of Commission approval in the same manner and subject to
the same conditions as requested for NCE.
4. Intrasystem Financing. The Applicants propose various financing
transactions between NCE and its subsidiaries and between certain subsidiaries.
The aggregate amount of all such financing would not exceed $300,000,000
excluding amounts exempt pursuant to Rules 45 and 52.
a. General. NCE proposes to make to its Subsidiaries and certain
Subsidiaries propose to make to other Subsidiaries open-account advances,
long-term loans and/or capital stock purchases, as determined by NCE and its
respective Sub-
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sidiaries to be appropriate. These borrowings would be made on a revolving basis
and would bear interest at a rate equal to the weighted average effective
interest rate of NCE's short-term borrowings or, if no such borrowings are
outstanding, at a rate based on the Federal Funds effective rate of interest
quoted daily by the Federal Reserve Bank of New York.
In addition, the Commission is requested to reserve jurisdiction over
the issuance and sale by the Non-Utility Subsidiaries and the acquisition by NCE
or other Non-Utility Subsidiaries of other types of securities that are not
exempted by Rule 52 from the requirement of Commission approval in the same
manner and subject to the same conditions as requested for the issuance and sale
of other securities by NCE.
b. Guarantees. The Applicants propose to enter into guarantee
arrangements, obtain letters of credit, enter into expense agreements and
otherwise provide credit support with respect to the obligations of the other
Applicants to third parties. NCE proposes to enter into such arrangements with
respect to the obligations of any Subsidiary and any Subsidiary proposes to
enter into such arrangements with respect to any other Subsidiary. The aggregate
amount of all such arrangements would not exceed $300,000,000, $300,000,000 (to
be increased to $450,000,000), and $50,000,000 outstanding at any one time, with
respect to NCE, PSCo and the Subsidiaries, respectively, except to the extent
the same are exempt pursu-
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ant to Rule 45 and are in addition to the other respective aggregate limits on
external financing and intrasystem financing for NCE and its Subsidiaries.
5. Changes in Capital Stock of Subsidiaries. The portion of an
individual Subsidiary's aggregate financing through the sale of stock to NCE or
other immediate parent company cannot be ascertained at this time. NCE and its
Subsidiaries request authority to increase such Subsidiary's authorized capital
stock and to change the amount or terms of any such Subsidiary's capital stock
capitalization by an amount deemed appropriate by NCE or other immediate parent
company and to change or eliminate the par value of such stock without further
Commission approval.
6. Financing Entities. In connection with the issuance of income
preferred securities or other securities authorized in this proceeding or
pursuant to an applicable exemption, the Applicants seek authorization to
organize new corporations, trusts, partnerships or other entities created for
the purpose of facilitating such financings.
Request is also made for these financing entities to issue such
securities to third parties in the event such transactions involving financing
by the Applicants are not exempt pursuant to Rule 52, including authorization
with respect to (i) the issuance of debentures or other evidences of
indebtedness by any of the Applicants to a financing entity in return
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for the proceeds of the financing, (ii) the acquisition by any of the Applicants
of voting interests or equity securities issued by the financing entity to
establish any such Applicant's ownership of the financing entity (the equity
portion of the entity generally being created through a capital contribution or
the purchase of equity securities, ranging from 1 to 3 percent of the
capitalization of the financing entity) and (iii) the guarantee by the
Applicants of such financing entity's obligations in connection therewith. Each
of the Applicants and the Subsidiaries also request authorization to enter into
expense agreements with its respective financing entity, pursuant to which it
would agree to pay all expenses of such entity. Any amounts issued by such
financing entities to third parties pursuant to this authorization will be
included in the overall external financing limitation authorized herein for the
immediate parent of such financing entity, however, the indebtedness issued by
an Applicant to a financing entity will not count against the intrasystem
financing limit set forth herein. Applicants also request that SPS be authorized
to retain Southwestern Public Service Capital I, a wholly owned trust, that
issued trust preferred securities and loaned the proceeds to SPS.
7. Existing Financing Arrangements. The Applicants propose to retain
such financing arrangements as were in place prior to the Merger and which are
not otherwise exempted from the provisions of the Act.
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8. Financing of EWGs and FUCOs. NCE's Non-Utility Subsidiaries, New
Century International Inc., e prime and Quixx and their subsidiaries, currently
own investments in EWGs or FUCOs. Sections 32 and 33 of the Act permit a
registered holding company to acquire and maintain interests in one or more EWGs
or FUCOs without the need to apply for or receive approval from the Commission.
To the extent that funds for one or more projects are required in excess of
internally generated funds, NCE hereby requests Commission authorization to
invest proceeds from the financings authorized hereby in EWGs and FUCOs and to
guarantee the obligations of an EWG or FUCO in compliance with Rule 53(a)(1)
such that NCE's aggregate investment at any one time during the period covered
by this Application will not exceed 50% of its "consolidated retained earnings",
as defined in Rule 53(a)(1)(ii).
For the Commission, by the Division of Investment Management, pursuant
to delegated authority.
