(As filed October 1, 1999)
File No. 70-8787
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-----------------------------------------------------
Post-Effective Amendment No. 1
("POS AMC")
to
FORM U-1
APPLICATION/DECLARATION
UNDER THE
PUBLIC UTILITY HOLDING COMPANY ACT OF 1935
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New Century Energies, Inc.
Public Service Company of Colorado
NC Enterprises, Inc.
1225 17th Street
Denver, Colorado 80202-5533
(Names of companies filing this statement and
addresses of principal executive offices)
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New Century Energies, Inc.
(Name of top registered holding company parent)
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Teresa S. Madden
Controller
New Century Energies, Inc
1225 17th Street, Suite 900
Denver, Colorado 80202-5533
(Name and address of agents for service)
The Commission is requested to send copies of all
notices, orders and communications in connection with
this Application/Declaration to:
William M. Dudley, Esq. William T. Baker, Jr., Esq.
New Century Energies, Inc Thelen Reid & Priest LLP
1225 17th Street, Suite 600 40 West 57th Street
Denver, Colorado 80202-5533 New York, New York 10019
<PAGE>
ITEM 1. DESCRIPTION OF PROPOSED TRANSACTION.
-----------------------------------
By order dated August 1, 1997 (Holding Co. Act Rel. No. 26748) in this
proceeding (the "Merger Order"), the Commission authorized New Century Energies,
Inc. ("NCE"), a registered holding company, to acquire all of the issued and
outstanding common stock of Public Service Company of Colorado ("PSCo") and
Southwestern Public Service Company ("SPS") and to organize NC Enterprises, Inc.
("Enterprises") as an intermediate holding company for certain of the existing
non-utility subsidiaries of PSCo and SPS which the Commission held to be
retainable under the standards of Section 11(b)(1) of the Act. In accordance
with the Merger Order, PSCo transferred Natural Fuels Corporation ("Natural
Fuels"), an 83.63% subsidiary of PSCo, to Enterprises by means of a declaration
of a dividend of the shares of Natural Fuels to NCE, followed by a capital
contribution of such shares by NCE to Enterprises. These transactions were
carried out on August 1, 1999. The remaining 16.37% interest in Natural Fuels is
owned by CIC Stock Corporation ("CIC"), an indirect subsidiary of the Coastal
Corporation.
Natural Fuels currently holds a 50% interest in Natural/Total Limited
Liability Company ("Natural/Total"), a Wyoming limited liability company, and a
50% profits interest (25% capital interest) in Natural/Peoples Limited Liability
Company ("Natural/Peoples"), also a Wyoming limited liability company.
Natural/Total, in turn, holds a 67% interest in Natural/Total/KN Limited
Partnership ("Natural/Total LLP").
Natural Fuels and its subsidiaries named above are engaged in two
distinct lines of business which relate generally to the commercialization of
compressed natural gas as a fuel for motor vehicles. One line of business
includes the conversion of motor vehicles to permit operation by compressed
natural gas or propane, and the construction, ownership and operation of
compressed natural gas fueling stations ("Energy Services"). The other line of
business involves the packaging and marketing of compressed natural gas fueling
facility equipment ("Station Equipment"). The two lines of business have
substantially different customer bases, geographic focus, and capital
requirements. The Energy Services business is confined to parts of Colorado and
Wyoming and generally serves the needs of motor vehicle users (both individual
and fleet). The business generally involves the ownership and operation of
long-lived assets (viz. refueling stations). In contrast, the Station Equipment
business is national and international in scope, and serves the needs of fuel
providers, utilities, and automotive fleet operators, rather than vehicle users.
This business does not involve investment in or ownership or operation of
long-lived assets.
The applicants have now determined that it would be desirable from an
operational and organizational standpoint to separate Natural Fuel's Energy
Services and Station Equipment businesses and transfer the former back to PSCo.
The applicants believe that the Energy Services business fits well with PSCo's
gas-utility operations, as they share a similar customer base in Colorado and
Wyoming and involve similar operational characteristics. Moreover, PSCo already
owns and operates compressed natural gas fueling stations at the majority of its
service centers for the operation of more than 350 service vehicles which use
compressed natural gas in compliance with the requirements of the Energy Policy
Act of 1992. The applicants also believe
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<PAGE>
that the transfer would streamline and focus the marketing and public education
efforts that are now conducted by both Natural Fuels and PSCo.(1)
Accordingly, to the extent not exempt under the Act or rules
thereunder, the applicants request approval for a series of related transactions
that will result in the separation of Natural Fuels Energy Services and Station
Equipment businesses and transfer of the former back to PSCo. These transactions
are described as follows:
1. Natural Fuels will redeem the 16.37% interest in its
outstanding common stock that is held by CIC through a
distribution of certain unappreciated property (e.g.,
inventory assets, accounts receivable, etc.).
2. Natural Fuels would then contribute its remaining assets
(including its membership interests in Natural/Total and
Natural/Peoples) to two newly organized limited liability
companies, which are referred to here as Natural Fuels LLC (or
"NATCO") and Natural Station Equipment LLC (or "STATCO").
3. Natural Fuels would then distribute the membership interest in
STATCO to Enterprises, which will continue to hold such
interest indefinitely.
4. Enterprises would then transfer 100% of the common stock of
Natural Fuels to PSCo by means of a declaration of a dividend
of the shares of Natural Fuels to NCE, followed by a capital
contribution of such shares by NCE to PSCo, such that Natural
Fuels would become a wholly-owned subsidiary of PSCo.
5. PSCo will form a single-member limited liability company
("New" Natural Fuels) and then cause Natural Fuels to be
merged into "New" Natural Fuels.
As a result of these interrelated transactions, PSCo will then own,
directly and indirectly through "New" Natural Fuels, all of the compressed
natural gas services business of Natural Fuels, consisting of the existing
refueling station operations in Colorado and Wyoming and vehicle conversion
operations. The assets and business associated with Natural Fuels' station
equipment business will remain with NC Enterprises.
ITEM 2. FEES, COMMISSIONS AND EXPENSES.
------------------------------
The fees, commissions and expenses incurred or to be incurred in
connection with the transactions proposed herein are estimated at $6,000.
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(1) As an example, PSCo currently provides educational services to public
officials, including fire departments, on natural gas safety issues, while
Natural Fuels provides similar educational services on safety issues
involving natural gas vehicles.
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<PAGE>
ITEM 3. APPLICABLE STATUTORY PROVISIONS.
-------------------------------
3.1 General. The redemption by Natural Fuels of the shares of common
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stock held by CIC is subject to Sections 9(a)(1) and 10, but may be exempt
pursuant to Rule 42. The organization and acquisition of the securities of NATCO
and STATCO by Natural Fuels in exchange for the assets of Natural Fuels is
subject to Sections 9(a)(1), 10, 12(b) and 12(f) of the Act and Rules 43 and 45
thereunder. Section 12(c) of the Act and Rule 46 thereunder are applicable to
the distribution by Natural Fuels to Enterprises of the membership interests in
STATCO. Likewise, Section 12(c) of the Act and Rule 46 thereunder are applicable
to the distribution by Enterprises to NCE of the common stock of Natural Fuels.
Section 12(b) of the Act and Rule 45 thereunder are applicable to the
contribution by NCE of the common stock of Natural Fuels to PSCo. The
organization and acquisition of "New" Natural Fuels by PSCo are subject to
Sections 9(a)(1) and 10 of the Act, and the merger of Natural Fuels into "New"
Natural Fuels is subject to Sections 6(a), 7, 9(a)(1) and 10 of the Act.
3.2 Rule 54 Analysis. The transactions proposed herein are also
----------------
subject to Section 32(h)(4) of the Act and Rule 54 thereunder. Rule 54 provides
that, in determining whether to approve any transaction that does not relate to
an "exempt wholesale generator" ("EWG") or exempt "foreign utility company"
("FUCO"), the Commission shall not consider the effect of the capitalization or
earnings of any subsidiary which is an EWG or FUCO upon the registered holding
company system if paragraphs (a), (b) and (c) of Rule 53 are satisfied.
Initially, NCE has complied or will comply with the record-keeping
requirements of Rule 53(a)(2), the limitation under Rule 53(a)(3) on the use of
the NCE system's domestic public-utility company personnel to render services to
EWGs and FUCOs, and the requirements of Rule 53(a)(4) concerning the submission
of copies of certain filings under the Act to retail regulatory commissions.
Further, none of the circumstances described in Rule 53(b) has occurred or is
continuing. Rule 53(c) is inapplicable by its terms because the proposals
contained herein do not involve the issue and sale of securities (including any
guarantees) to finance an acquisition of an EWG or FUCO.
Rule 53(a)(1) limits a registered holding company's financing of
investments in EWGs if such holding company's "aggregate investment" (as defined
in Rule 53(a)(1)) in EWGs and FUCOs exceeds 50% of its "consolidated retained
earnings" (also as defined in Rule 53(a)(1)). However, by order dated
February 26, 1999, the Commission has authorized NCE to finance investments in
EWGs and FUCOs in an amount up to 100% of NCE's "consolidated retained
earnings."(2) NCE's "aggregate investment" in all EWGs and FUCOs, pro forma to
include NCE's indirect investment in Yorkshire Electricity Group plc
("Yorkshire") and Independent Power Corporation plc ("IPC"), is currently equal
to 51.4% of NCE's average "consolidated retained earnings" for the four quarters
ended June 30, 1999. At the present time, therefore, NCE satisfies all of the
requirements of Rule 53(a), as modified by the Commission's order of
February 26, 1999.
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(2) See New Century Energies, Inc., Holding Co. Act Rel No. 26982.
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<PAGE>
However, even if the Commission were to take into account, on a pro
forma basis, the effect of the capitalization and earnings of EWGs and FUCOs
(including, on a pro forma basis, Yorkshire and IPC) in which NCE has invested,
it would have no basis for denying the transactions proposed herein. The
transactions proposed relate to an internal reorganization in which an interest
in an existing energy-related business would simply be transferred to an
associate company, indeed, the same associate company (i.e., PSCo) which owned
the investment prior to the merger.
Moreover, there has been no material impact on NCE's consolidated
capitalization by reason of the inclusion therein of the capitalization and
earnings of EWGs and FUCOs (including on a pro forma basis Yorkshire and IPC) in
which NCE has an interest. Additionally, NCE believes that its capitalization
ratios and income levels are within acceptable ranges. Finally, although NCE's
consolidated earnings for the year ended December 31, 1997, were negatively
affected by its investment in Yorkshire, this was solely as the result of the
imposition by the United Kingdom of a one-time, non-recurring, windfall tax on
Yorkshire. Importantly, this tax did not affect earnings from ongoing
operations, and, therefore, would not have any negative financial impact on
earnings in future periods.
ITEM 4. REGULATORY APPROVALS.
--------------------
No state commission and no federal commission, other than this
Commission, has jurisdiction over the proposed transactions.
ITEM 5. PROCEDURE.
---------
The Commission is requested to publish a notice under Rule 23 with
respect to the filing of this Post-Effective Amendment as soon as practicable
and to issue an order approving the Post-Effective Amendment not later than
December 15, 1999, so as to allow the transactions described herein to be
consummated before year end. The applicants request that there should not be a
30-day waiting period between issuance of the Commission's order and the date on
which the order is to become effective. The applicants hereby waive a
recommended decision by a hearing officer or any other responsible officer of
the Commission and consents that the Division of Investment Management may
assist in the preparation of the Commission's decision and/or order, unless the
Division opposes the matters proposed herein.
ITEM 6. EXHIBITS AND FINANCIAL STATEMENTS.
---------------------------------
A. EXHIBITS. (TO BE FILED BY AMENDMENT EXCEPT AS OTHERWISE INDICATED)
--------
A-1 Articles of Organization of Natural Fuels LLC.
A-2 Operating Agreement of Natural Fuels LLC.
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<PAGE>
A-3 Articles of Organization of Natural Station Equipment LLC.
A-4 Operating Agreement of Natural Station Equipment LLC.
B None.
C None.
D None.
E None.
F Opinion of Counsel.
G Financial Data Schedule Per-Book NCE. (Incorporated
by reference to Exhibit 27 to the Quarterly Report on
Form 10-Q of NCE for the period ended June 30, 1999)
(File No. 1-12927).
H Proposed Form of Federal Register Notice. (Filed
herewith).
B. FINANCIAL STATEMENTS.
--------------------
1.1 Balance Sheet of NCE and consolidated subsidiaries,
as of June 30, 1999 (incorporated by reference to the
Quarterly Report on Form 10-Q of NCE for the period
ended June 30, 1999) (File No. 1-12927).
1.2 Statement of Income of NCE and consolidated
subsidiaries, as of June 30, 1999 (incorporated by
reference to the Quarterly Report on Form 10-Q of NCE
for the period ended June 30, 1999) (File No.
1-12927).
2.1 Balance Sheet of NC Enterprises, Inc. and
subsidiaries, consolidated, as of June 30, 1999. (To
be filed by amendment).
2.2 Statement of Income of NC Enterprises, Inc. and
subsidiaries, consolidated, as of June 30, 1999. (To be
filed by amendment).
ITEM 7. INFORMATION AS TO ENVIRONMENTAL EFFECTS.
---------------------------------------
The transactions that are the subject of this Post-Effective Amendment
do not involve a "major federal action" nor do they "significantly affect the
quality of the human environment" as those terms are used in section 102(2)(C)
of the National Environmental Policy Act. The transactions that are the subject
of this Post-Effective Amendment will not result in changes in the operation of
the applicants that will have an impact on the environment. The applicants are
not aware of any federal agency that has prepared or is preparing an
environmental impact statement with respect to the transactions that are the
subject of this Post-Effective Amendment.
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<PAGE>
SIGNATURE
Pursuant to the requirements of the Public Utility Holding Company Act
of 1935, as amended, the undersigned companies have duly caused this statement
to be signed on their behalf by the undersigned thereunto duly authorized.
NEW CENTURY ENERGIES, INC.
PUBLIC SERVICE COMPANY OF
COLORADO
NC ENTERPRISES, INC.
By: /s/ Richard C. Kelly
----------------------------------------
Name: Richard C. Kelly
Title: Executive Vice President
Date: October 1, 1999
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EXHIBIT H
PROPOSED FORM OF FEDERAL REGISTER NOTICE
SECURITIES AND EXCHANGE COMMISSION
(Release No. 35-_____)
Filings under the Public Utility Holding Company Act of 1935, as amended ("Act")
October __, 1999
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
thereunder. 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 amendments thereto
is/are available for public inspection through the Commission's Office 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
, 1999 to the Secretary, Securities and Exchange Commission,
- --------------
Washington, D.C. 20549, and serve a copy on the relevant applicant(s) and/or
declarant(s) at the address(es) as specified below. Proof of service (by
affidavit or, in case of an attorney at law, by certificate) should be filed
with the request. Any request for hearing shall identify specifically the issues
of fact 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 , 1999, the application(s) and/or
-------------
declaration(s), as filed or as amended, may be granted and/or permitted to
become effective.
* * * * * *
NEW CENTURY ENERGIES, INC., ET AL. (70-8787)
- ---------------------------------
New Century Energies, Inc. ("NCE"), a registered holding company, and
two of its wholly-owned subsidiaries, Public Service Company of Colorado
("PSCo"), an electric and gas utility company, and NC Enterprises, Inc.
("Enterprises"), a non-utility company, each of whose address is at 1225 17th
Street, Denver, Colorado 80202-5533, have filed a post-effective amendment to
the application or declaration in this proceeding pursuant to Sections 6(a), 7,
9(a), 10 , 12(c) and 12(f) of the Act and Rules 42, 43, 45, 46 and 54
thereunder.
By order dated August 1, 1997 (Holding Co. Act Rel. No. 26748) in this
proceeding (the "Merger Order"), the Commission authorized NCE to acquire all of
the issued and outstanding common stock of PSCo and Southwestern Public Service
Company ("SPS") and to organize Enterprises as an intermediate holding company
for certain of the existing non-utility subsidiaries of PSCo and SPS which the
Commission held to be retainable under the standards of Section 11(b)(1) of the
Act. In accordance with the Merger Order, PSCo transferred Natural Fuels
<PAGE>
Corporation ("Natural Fuels"), an 83.63% subsidiary of PSCo, to Enterprises by
means of a declaration of a dividend of the shares of Natural Fuels to NCE,
followed by a capital contribution of such shares by NCE to Enterprises. The
remaining 16.37% interest in Natural Fuels is owned by CIC Stock Corporation
("CIC"), an indirect subsidiary of the Coastal Corporation.
Natural Fuels currently holds a 50% interest in Natural/Total Limited
Liability Company ("Natural/Total"), a Wyoming limited liability company, and a
50% profits interest (25% capital interest) in Natural/Peoples Limited Liability
Company ("Natural/Peoples"), also a Wyoming limited liability company.
Natural/Total, in turn, holds a 67% interest in Natural/Total/KN Limited
Partnership ("Natural/Total LLP").
Natural Fuels and its subsidiaries named above are engaged in two
distinct lines of business which relate generally to the commercialization of
compressed natural gas as a fuel for motor vehicles. One line of business
includes the conversion of motor vehicles to permit operation by compressed
natural gas or propane, and the construction, ownership and operation of
compressed natural gas fueling stations ("Energy Services"). The other line of
business involves the packaging and marketing of compressed natural gas fueling
facility equipment ("Station Equipment"). The two lines of business have
substantially different customer bases, geographic focus, and capital
requirements. The Energy Services business is confined to parts of Colorado and
Wyoming and generally serves the needs of motor vehicle users (both individual
and fleet). The business generally involves the ownership and operation of
long-lived assets (viz. refueling stations). In contrast, the Station Equipment
business is national and international in scope, and serves the needs of fuel
providers, utilities, and automotive fleet operators, rather than vehicle users.
This business does not involve investment in or ownership or operation of
long-lived assets.
The applicants state that they have determined that it would be
desirable from an operational and organizational standpoint to separate Natural
Fuel's Energy Services and Station Equipment businesses and transfer the former
back to PSCo. The applicants assert that the Energy Services business fits well
with PSCo's gas-utility operations, as they share a similar customer base in
Colorado and Wyoming and involve similar operational characteristics. Moreover,
PSCo already owns and operates compressed natural gas fueling stations at the
majority of its service centers for the operation of more than 350 service
vehicles which use compressed natural gas in compliance with the requirements of
the Energy Policy Act of 1992. The applicants also assert that the transfer
would streamline and focus the marketing and public education efforts that are
now conducted by both Natural Fuels and PSCo.
Accordingly, to the extent not exempt under the Act or rules
thereunder, the applicants request approval for a series of related transactions
that will result in the separation of Natural Fuels Energy Services and Station
Equipment businesses and transfer of the former back to PSCo. These transactions
are described as follows:
1. Natural Fuels will redeem the 16.37% interest in its
outstanding common stock that is held by CIC through a
distribution of certain unappreciated property (e.g.,
inventory assets, accounts receivable, etc.).
2
<PAGE>
2. Natural Fuels will then contribute its remaining assets
(including its membership interests in Natural/Total and
Natural/Peoples) to two newly organized limited liability
companies, which are referred to here as Natural Fuels LLC (or
"NATCO") and Natural Station Equipment LLC (or "STATCO").
3. Natural Fuels will then distribute the membership interest in
STATCO to Enterprises, which will continue to hold such
interest indefinitely.
4. Enterprises will then transfer 100% of the common stock of
Natural Fuels to PSCo by means of a declaration of a dividend
of the shares of Natural Fuels to NCE, followed by a capital
contribution of such shares by NCE to PSCo, such that Natural
Fuels would become a wholly-owned subsidiary of PSCo.
5. PSCo will form a single-member limited liability company
("New" Natural Fuels) and then cause Natural Fuels to be
merged into "New" Natural Fuels.
As a result of these interrelated transactions, PSCo will then own,
directly and indirectly through "New" Natural Fuels, all of the compressed
natural gas services business of Natural Fuels, consisting of the existing
refueling station operations in Colorado and Wyoming and vehicle conversion
operations. The assets and business associated with Natural Fuels' station
equipment business will remain with NC Enterprises.
It is stated that no state commission and no federal commission (other
than this Commission) has jurisdiction over the proposed transactions. It is
further stated that NCE complies with all of the requirements of Rule 53 (which
are incorporated by reference into Rule 54), as modified by the Commission's
order of February 26, 1999 (Holding Co. Act Rel. No. 26982).
3
