(As filed December 28, 2000)
File No. 70-9735
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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AMENDMENT NO. 3 TO
FORM U-1/A
APPLICATION OR DECLARATION
UNDER THE
PUBLIC UTILITY HOLDING COMPANY ACT OF 1935
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Alliant Energy Corporation
Wisconsin Power and Light Company
South Beloit Water, Gas & Electric Company
222 West Washington Avenue
Madison, Wisconsin 53703
American Transmission Company LLC
c/o ATC Management Inc.
N16 W23217 Stone Ridge Drive
Waukesha, Wisconsin 53187
ATC Management Inc.
c/o Wisconsin Electric Power Company
N16 W23217 Stone Ridge Drive
Waukesha, Wisconsin 53187
(Names of companies filing this statement and
addresses of principal executive offices)
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ALLIANT ENERGY CORPORATION
(Name of top registered holding company parent)
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Edward M. Gleason, Vice President-Treasurer
and Corporate Secretary
Alliant Energy Corporation
222 West Washington Avenue
Madison, Wisconsin 53703
(Name and address of agent for service)
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The Commission is requested to send copies of all notices, orders and
communications in connection with this Application/Declaration to:
Barbara J. Swan, General Counsel William T. Baker, Jr., Esq.
Alliant Energy Corporation Thelen Reid & Priest LLP
222 West Washington Avenue 40 West 57th Street
Madison, Wisconsin 53703 New York, New York 10019
Daniel A. Doyle, Vice President, Chief
Financial Officer and Treasurer
ATC Management Inc.
N16 W23217 Stone Ridge Drive
Waukesha, Wisconsin 53187
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Alliant Energy Corporation ("Alliant Energy"), Wisconsin Power & Light
Company ("WPL"), South Beloit Water, Gas & Electric Company ("South Beloit"),
American Transmission Company LLC (the "Transco") and ATC Management Inc. (the
"Corporate Manager", and, together with Alliant Energy, WPL, South Beloit and
Transco, "Applicants") hereby amend their Application/Declaration on Form U-1 in
Commission file No. 70-9735 in its entirety to read as follows:
ITEM 1. DESCRIPTION OF PROPOSED TRANSACTION.
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INTRODUCTION
A. Alliant Energy is a registered holding company under the Public
Utility Holding Company Act of 1935, as amended (the "Act").1 Its
public-utility subsidiaries are WPL, South Beloit, Interstate Power Company, and
IES Utilities Inc. The principal executive offices of Alliant Energy, WPL and
South Beloit are located at 222 West Washington Avenue, Madison, Wisconsin
53703. The Transco, which is described in further detail below, is a Wisconsin
limited liability company that was formed on June 12, 2000 with Wisconsin
Electric Power Company ("WEPCO"), a subsidiary of Wisconsin Energy Corporation
("WEC"), Wisconsin Public Power Inc. ("WPPI") and the Corporate Manager, a
Wisconsin corporation
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1 See WPL Holdings, Inc., et al., Holding Co. Act Release No. 26856 (Apr.
14, 1998).
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formed on June 12, 2000, as its initial members. The principal executive
officers of the Transco and the Corporate Manager are currently located at N16
W23217 Stone Ridge Drive, Waukesha, Wisconsin 53187. The Commission, in HCAR No.
27206 (Aug. 2, 2000), authorized, among other things, WPL to become a member of
the Transco and to acquire shares of the Corporate Manager.
B. WPL is engaged principally in the generation, purchase,
transmission, distribution and sale of electric power in 35 counties in a 16,000
square-mile area in southern and central Wisconsin. As of December 31, 1999, WPL
provides retail electric service to approximately 407,000 customers in 599
cities, villages and towns, and wholesale service to 24 municipal utilities,
three rural electric cooperatives, the Wisconsin Public Power Incorporated
System, which provides retail electric service to nine communities in the WPL
service area, and one privately owned utility.
C. WPL is subject to regulation as a public utility as to retail
electric, gas and water rates, service rules, issuance of securities,
construction of new facilities, transactions with affiliates and various other
matters by the Public Service Commission of Wisconsin (the "Wisconsin
Commission"). It is also subject to regulation by the Federal Energy Regulatory
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Commission ("FERC"). The Nuclear Regulatory Commission ("NRC") regulates WPL in
connection with its ownership interest in the Kewaunee Nuclear Power Plant.2
D. South Beloit is a wholly-owned subsidiary of WPL that supplies
retail electric and gas services to customers in the cities of South Beloit and
Rockton, Illinois, and the adjacent rural areas. South Beloit is subject to
regulation by the Illinois Commerce Commission (the "Illinois Commission"). As
of December 31, 1999, South Beloit serves approximately 8,000 electric
customers. The service territory of South Beloit is located in Illinois and is
adjacent to the service territory of WPL in Wisconsin. The electric distribution
systems of WPL and South Beloit are interconnected at many points along the
Wisconsin-Illinois state line. The electric operations of WPL and South Beloit
are integrated and all of WPL's generating units are centrally dispatched by
Alliant Energy Corporate Services, Inc., the service company affiliate of WPL
and South Beloit.3
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2 WPL is exempt from registration as a holding company by Commission order
under Section 3(a)(1) of the Act. See Wisconsin Power and Light Co., 1 S.E.C.
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362 (1936).
3 South Beloit has no generating units.
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E. WPL owns and operates a transmission system comprising 107 miles of
345 kV transmission facilities, 758 miles of 138 kV transmission facilities,
1,908 miles of 69 kV transmission facilities and associated substations and real
property interests (the "WPL Transmission Assets"). South Beloit owns and
operates a transmission system comprising less than one mile of 345 kV
transmission facilities, 10 miles of 69 kV transmission facilities, one
substation and associated real property interests (the "South Beloit
Transmission Assets").
F. At and for the twelve months ended June 30, 2000, Alliant Energy's
consolidated assets, operating revenue and net income (all in thousands) were
$6,597,078, $2,358,409 and $177,890, respectively. At and for the twelve months
ended June 30, 2000, WPL's consolidated assets, operating revenue and earnings
available for common stock (all in thousands) were $1,779,049, $795,096 and
$67,448, respectively. At and for the twelve months ended June 30, 2000, South
Beloit's assets, operating revenue and net income (all in thousands) were
$21,494, $16,794 and $1,959, respectively.
G. Applicants request authorization for (i) WPL to transfer, directly
or indirectly, ownership and control over the WPL Transmission Assets to the
Transco; (ii) South Beloit to transfer, directly or indirectly, ownership and
control over the South Beloit Transmission Assets to the Transco; (iii) WPL and
South Beloit to receive, directly or indirectly, in exchange for such transfer,
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member units 4 of the Transco; (iv) WPL to purchase approximately 2,400 shares
of the Class A Common Stock ("Class A shares") of the Corporate Manager;5 (v)
WPL to purchase one share of the Class B Common Stock ("Class B share") of the
Corporate Manager;6 (vi) the Transco's issuance of its member units in exchange
for which the Transco will acquire either transmission assets (in the case of
WPL, South Beloit and any other transmission-owning Member Utilities (as defined
below)) or cash (in the case of WPPI and any other transmission-dependent Member
Utilities) and (vii) the Corporate Manager's issuance of its Class A and Class B
shares in exchange for cash payments.
Because of limitations imposed by the WPL indenture (the "Indenture"), WPL
will effect the transfer of the WPL Transmission Assets to the Transco and its
acquisition of the Transco member units through a newly created limited
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4 Member units will evidence the respective holder's limited liability
interests in the Transco.
5 The final percentage ownership interests, as well as the definitive
number of Transco member units and Corporate Manager Class A shares to be
acquired, will depend upon the actual participants in the Transco and the
Contribution Value (as defined below) of the transmission assets transferred to
the Transco by such participants.
6 WPL will pay a purchase price for these Class A and Class B Corporate
Manager shares of $10 per share.
5
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liability company ("NewCo") to be wholly owned by WPL.7 The following steps,
for which Applicants specifically seek authority, will occur essentially
simultaneously: (1) WPL will form NewCo and acquire all of its member units for
one or more cash payments; (2) NewCo will transfer to the trustee under the
Indenture cash in an amount approximately equal to WPL's corresponding cash
payment to NewCo for NewCo's member units 8; (3) upon receipt of such payment,
the trustee will release the WPL Transmission Assets from the lien of the
Indenture; (4) WPL will transfer the WPL Transmission Assets to the Transco; and
(5) the Transco will issue its member units to NewCo.9 WPL and South Beloit
also seek Commission authority to transfer to the Transco, from time to time, up
to $10,000,000 of transmission assets which are currently under construction, in
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7 NewCo will exist solely for the purposes of this transaction and will
never issue debt or equity securities.
8 This cash payment will be equal to the "fair value" to WPL of the WPL
Transmission Assets, as is defined in, and required by, the Indenture. Such
"fair value" will approximate the Contribution Value (as defined below) of the
WPL Transmission Assets. Receipt of such cash by the trustee will permit the WPL
Transmission Assets to be released from the lien of the Indenture.
9 NewCo will then continue to hold WPL's interests in the Transco, but the
Transco's operating agreement will require that all Transco voting rights be
exercised by WPL. WPL will hold its shares in the Corporate Manager directly.
6
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exchange for additional Transco member units to be issued to NewCo or South
Beloit, as the case may be.10
The transfer of the WPL Transmission Assets to the Transco in exchange for
an indirect membership interest in the Transco will not be detrimental to WPL
investors. There are currently outstanding approximately $306.1 million
principal amount of WPL first mortgage bonds which are secured by permanent
additions having a depreciated book value of approximately $1.5 billion. Of this
amount, approximately $899.3 million of permanent additions (294% of the
principal amount of the bonds) were applied to the issuance of the bonds, with
the balance available for additional bonding or other applications permitted by
the Indenture. The aggregate depreciated book value of the WPL Transmission
Assets that will be released from the lien of the Indenture is approximately
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10 Applicants believe that as a result of the transactions contemplated
herein, the Corporate Manager will be a "holding company" as defined in section
2(a)(7) of the Act. Additionally, as noted in note 2 above, WPL is already an
exempt holding company. Both WPL and the Corporate Manager intend to file an
exemption statement on Form U-3A-2 pursuant to Rule 2 under the Act. Applicants
also believe that the Corporate Manager will become a "public utility company"
as defined in Section 2(a)(5) of the Act in its capacity as operator of the
Transco's assets.
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$177.7 million. Following the release of the WPL Transmission Assets from the
lien of the Indenture, WPL's outstanding bonds will be secured by permanent
additions with a depreciated book value of approximately 428% of the aggregate
principal amount of its outstanding first mortgage bonds.
With respect to the equity investors in WPL, WPL's total assets will not be
materially affected by the proposed transaction. WPL will receive indirectly an
equity interest in the Transco that approximates the value of the WPL
Transmission Assets transferred to the Transco.
H. Commission authorization through June 30, 2004 is also sought for
external financing as follows: (i) short-term debt financing by the Transco in
the form of, among other things, borrowings under a revolving credit agreement,
issuance of commercial paper or other forms of short-term financing; (ii)
long-term debt financing by the Transco in the form of debentures or other forms
of long-term debt financing; and (iii) equity financing in the form of common or
preferred stock of the Corporate Manager, other equity securities or additional
interests in the Transco. The amount of the Transco's short-term and long term
debt outstanding at any time will not exceed, in the aggregate, $400 million.
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TRANSCO LEGISLATION
I. In 1999, the state of Wisconsin enacted legislation which
facilitates the formation of the Transco as a for-profit, single-purpose
transmission company.11 The Transco will charge a single system-wide average
network rate to be phased in over five years in accordance with the Transco
Legislation, and a single system-wide average point-to-point rate for "through
and out" service, under an open access transmission tariff filed with the FERC
on July 31, 2000. Key benefits of the Transco include the elimination of rate
"pancaking" among the Transco members' multiple transmission systems; one-stop
shopping for transmission and wholesale distribution service over multiple
transmission systems; the reduction of operational barriers within the Transco
service area; and the transfer of ownership of the transmission assets from
vertically integrated utilities that will further functional unbundling. These
benefits are in keeping with the goals of the Transco Legislation and FERC
policies. The Transco Legislation, among other things, encourages public utility
affiliates of Wisconsin holding companies, including WPL, to transfer ownership
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11 1999 Wisconsin Act 9, Sections 2335tr to 2335uh (Assembly Amendment to
Assembly Subcommittee Amendment 1 to 1999 Assembly Bill 133) (the "Transco
Legislation").
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of their transmission assets to the Transco by beneficially adjusting the
calculation of an existing limit on the amount of unregulated (or non-utility)
investments the holding company system can make, after the transfer of assets to
the Transco.12 The Transco will be managed by the Corporate Manager. The
Transco participants will acquire, directly or indirectly, interests in the
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12 Section 196.485(5) of the Wisconsin Statutes. This investment cap
applies to any holding company system that owns a Wisconsin public utility.
Generally, Wisconsin law limits the amount of assets that all non-utility
affiliates in a holding company system may own to an amount equal to 25% of the
assets owned by all of the electric utility affiliates within that system.
Section 196.795(6m)(b) of the Wisconsin Statutes. The Transco Legislation
permits an electric utility within a holding company system to exclude certain
energy related "eligible assets" (as defined in the Wisconsin Utility Holding
Company Act) from the calculation of non-utility assets that count towards the
25% asset cap if, among other things, each electric utility within a holding
company system that owns transmission assets in Wisconsin transfers all of those
transmission assets to the Transco before January 1, 2001 and each electric
utility within that holding company system petitions, by June 30, 2000, the
Wisconsin Commission and the FERC for authority to transfer operational control
of all of its transmission facilities in Wisconsin and the surrounding states to
the Midwest Independent System Operator or its successor organization. For
purposes of the Transco Legislation, the term "eligible assets" includes assets
of a non-utility affiliate used to, among other things, generate or transmit
gas, oil, electricity or steam energy; provide energy management services;
provide energy-related customer services; recover, produce energy from, or
process waste materials; provide telecommunication services; provide
environmental engineering services; and manufacture or sell products that
filter, pump or process water or other fluids. All such assets in the Alliant
Energy System will thus not count towards the investment cap if, among other
things, WPL participates in the Transco in accordance with the Transco
Legislation.
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Transco and the Corporate Manager in proportion to the value of the transmission
assets or cash each participant contributes to the Transco.
Transmission-dependent utilities, as defined by the Transco Legislation, that
participate in the Transco will purchase their interests for cash and will
obtain ownership shares in proportion to their 1999 Wisconsin load ratio shares.
Tax exempt transmission-dependent entities that participate in the Transco, such
as WPPI,13 will purchase their interests for cash at a price that will keep the
other participants whole, as explained below.14
J. The Transco Legislation obligates the Transco to construct,
operate, maintain and expand its transmission facilities to provide adequate,
reliable transmission services for a single, system-wide rate for the use of its
system under an open access transmission tariff (the "Transco OATT") that has
been filed with the FERC. The Transco Legislation directs that the Transco
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13 WPPI is a municipal electric company owned by 30 Wisconsin
municipalities that operate electric utilities. These utilities supply electric
power to more than 100,000 customers in Wisconsin and purchase all of their
electric requirements from WPPI. WPPI was created pursuant to Wisconsin
legislation and is a non-profit, political division of the state. Section 66.073
of the Wisconsin Statutes.
14 Alternatively, the Transco participants may agree on special allocations
of certain tax elements, rather than adjust the purchase price to be paid by
such tax exempt entities.
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support robust competition in energy markets, extend no favoritism to any
participant and meet the transmission needs of all participants. Under the
provisions of the Transco Legislation, the Transco will transfer the operational
control of its transmission facilities to the Midwest Independent Transmission
System Operator, Inc. (the "Midwest ISO") when the Midwest ISO becomes
operational. If, however, the Midwest ISO fails to commence, or ceases,
operations, the Transco, in accordance with the Transco Legislation, will join
another independent system operator or other regional transmission organization
authorized under federal law to operate in Wisconsin.
K. It is expected that the initial participants in the Transco and the
Corporate Manager will include, in addition to WPL and South Beloit, WEPCO,
Edison Sault Electric Company ("ESE") (a WEC subsidiary with operations solely
in Michigan's Upper Peninsula that is subject to regulation by the Michigan
Public Service Commission), WPPI, Wisconsin Public Service Corp. ("WPS"), and
Madison Gas & Electric Company ("MGE").15 All utilities participating in the
Transco are referred to herein as "Member Utilities". Other entities, both
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15 The Corporate Manager will also initially own a less than 1% interest in
the Transco.
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within and outside of Wisconsin, may, in the future, decide to become members of
the Transco and will then also become Member Utilities. The Member Utilities
intend to contribute their transmission assets to the Transco on or about
January 1, 2001 (the "Operations Date").16
The transmission systems of the Member Utilities are interconnected at
numerous points and essentially all operate as part of the same reliability and
planning council -- the Mid-America Interconnected Network, Inc. ("MAIN").17
MAIN promotes coordinated planning, construction, operation, maintenance and use
of generation and transmission facilities by its members. The Member Utilities'
transmission systems were also planned and built on a coordinated basis pursuant
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16 The Transco Legislation currently contemplates that the transfer of the
transmission assets will occur by the Operations Date. Indeed, the Transco
Legislation requires WPL to commit to transfer its transmission assets to the
Transco by January 1, 2001 in order for Alliant Energy to obtain relief from the
Wisconsin non-utility asset cap applicable to Wisconsin public utility holding
companies described in note 12 above. Moreover, it is not clear how a failure to
effect such transfer by the Operations Date would impact Alliant Energy's
position with respect to such asset cap calculation. Accordingly, the Member
Utilities are proceeding under the assumption that Transco operation will begin
on the Operations Date and are therefore making all of the requisite FERC
filings to have the Transco OATT effective as of such date.
17 The Alliant Energy system transmission assets that are not being
transferred to the Transco are also interconnected at numerous points with the
transmission assets that are being transferred to the Transco, but are, and will
continue to be, operated as part of a different reliability and planning council
- - the Mid-Continent Area Power Pool. ESE is part of the East Central Area
Reliability (ECAR), but is expected to become part of MAIN by January 1, 2001.
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to the Wisconsin "advance planning" law in effect from 1975 until 1997. For a
map detailing the interconnection of the transmission systems of the Member
Utilities, see Exhibit E hereto.
TRANSCO OPERATIONS AND ORGANIZATION
L. The Transco will have the exclusive duty to provide transmission
service in geographic areas formerly served by the Transco members. The Transco
will not, however, have that duty in areas where control of transmission
facilities has been directly transferred to the Midwest ISO. Wisconsin law
prohibits the Transco from directly serving retail customers and from bypassing
distribution systems.
M. It is expected that the transmission-owning Member Utilities and
the Transco will enter into one or more agreements ("O&M Agreements") pursuant
to which the Member Utilities will provide the Transco with "reasonable and cost
effective operations and maintenance services" for at least the first three
years after the Operations Date in accordance with the Transco Legislation.18
Services provided under the O&M Agreements will include operations services such
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18 Section 196.485 (3m)(a)1.b. of the Wisconsin Statutes.
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as inspection, field switching and communications repair; line equipment
maintenance services such as line inspection, line repair, grounding, corrosion
control and right of way access maintenance; station equipment services
including inspection, structure and foundation repair and system testing and
maintenance; emergency response services such as field response, emergency clean
up response and post-emergency repair; station related services such as grass
maintenance, vegetation control and security checks; and other miscellaneous
services including grounding repair and major equipment repair. Each utility
will commit to maintain the organizational and physical resources needed to
perform all services under an O&M Agreement.
The Member Utilities and the Transco will also enter into a one or more
services agreements ("Services Agreements") pursuant to which the Member
Utilities will provide the Transco with certain services not covered by the O&M
Agreements. Services provided under the Services Agreements include control
center services, including the provision and supervision of control center
operator labor and dispatch of field operations personnel; real estate services
which include real estate records management, encroachment monitoring, lease
management, billing and collection, joint facility management and route
planning, siting and selection; project services necessary for the design,
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functioning and construction of capital projects including engineering,
protection and control design, procurement and construction; environmental
services; supply chain services including sourcing, logistic, inventory and
warehousing functions; engineering services; planning services and other
miscellaneous services.
The Transco will provide certain services from the Stoughton Operations
Center ("SOC") to support Alliant Energy's operation of its transmission
facilities outside of Wisconsin ("Non-Wisconsin Facilities") and its 34.5 kV
facilities in Wisconsin that are not being transferred to the Transco ("East
Facilities"). It is expected that such operations will be governed by an agency
agreement ("Agency Agreement"). The SOC is part of the WPL Transmission Assets
being transferred to the Transco. Services provided under the Agency Agreement
will include control and operation services including the remote oversight,
monitoring and control of the Non-Wisconsin Facilities and the East Facilities
from the SOC, coordination of all planned switching, performance of security
analysis, the monitoring of voltage, line flows, circuit breaker static and
transformer tap positions and record keeping; emergency response services;
blackstart services; and open access same-time information system ("OASIS")
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services, including inserting and extracting data from the Alliant Energy OASIS
node. Any services provided to or received by WPL, South Beloit or any other
Alliant Energy affiliate pursuant to the foregoing agreements will be provided
"at cost" in accordance with Section 13(b) of the Act and Rules 90 and 91
thereunder.
The Transco will enter into an Asset Contribution Agreement ("ACA") with
each Member Utility that is contributing transmission assets. The ACA provides
for each Member Utility to identify the real estate rights-of-way and personal
property that are to be contributed, and establishes the form of those
conveyances. In brief, the assets conveyed are required to be all those
necessary to enable the Transco to conduct transmission operations. Each Member
Utility will make certain representations with respect to those assets conveyed,
and will agree to indemnify the Transco in the event of a breach of those
representations.
Additionally, the Member Utilities and the Transco will enter into a
Forming Party Agreement Regarding System Operating Procedures ("Forming Party
Agreement") which memorializes certain principles of the Transco transmission
system operation that the Member Utilities agreed are necessary to ensure that
transmission system reliability and efficiency are continued during the
transition of system control from the Member Utilities to the Transco. No
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services will be provided under the Forming Party Agreement, though some of the
principles articulated in the Forming Party Agreement have been incorporated
into other agreements, such as service agreements, between the Member Utilities
and the Transco.
The distribution systems owned and operated by the Member Utilities are
currently interconnected with the current Member Utilities' transmission
systems. On January 1, 2001, when the Transco will take over ownership and
operation of the Member Utilities' transmission systems, the Member Utilities'
distribution systems will then be interconnected with the Transco's transmission
system. Each Member Utility will enter into a Distribution-Transmission
Interconnection Agreement (each, a "D-T Agreement") which will contain the terms
and conditions that will govern the interconnection of the Member Utilities'
distribution systems with the Transco transmission system, addressing such
matters as maintenance, operating and meter standards, access to facilities and
liability issues. The D-T Agreements contain no provisions for the payment of
rates or charges to the Transco for the Transco's provision of interconnection
services to the Member Utilities.
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The Member Utilities' generators are currently interconnected with the
Member Utilities' transmission systems. On January 1, 2001, the Member
Utilities' generators will then be interconnected with the Transco's
transmission system. Each Member Utility will enter into a
Generation-Transmission Interconnection Agreement (each, a "G-T Agreement")
which will contain the terms and conditions that will govern the interconnection
of the Member Utilities' generators with the Transco transmission system,
addressing such matters as maintenance, operating and metering standards, access
to facilities, redispatch, provision of ancillary services and liability issues.
The G-T Agreements contain no provisions for the payment of rates or charges to
the Transco for the Transco's provision of interconnection service to the Member
Utilities' generators.
The Member Utilities will each enter into a Network Operating Agreement
("NOA") and Network Integration Transmission Service Agreement ("NITSA") with
the Transco. These agreements are transmission service agreements pursuant to
the Transco OATT on file at FERC for the provision of network integration
transmission service. The NITSA is a form agreement on file at FERC that
specifies the network resources and network load that will be served thereunder.
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The NOA contains the specific operating provisions that allow a network customer
to integrate its load and resources as provided in the OATT.
N. In accordance with the Transco Legislation, all transmission-owning
Member Utilities will transfer all transmission assets to the Transco on the
Operations Date. For purposes of determining the initial distribution of
Corporate Manager shares and Transco member units among the Member Utilities,
the transmission assets will be valued at their Contribution Value, defined as
original cost less accumulated deprecation, as adjusted on a dollar-for-dollar
basis for deferred taxes, excess deferred taxes and deferred investment tax
credits. The resulting shares will then be adjusted based on various factors and
the level of participation by transmission-dependent utilities which will
acquire member units in the Transco for cash based upon their 1999 Wisconsin
load share ratios 19. It is expected that WPL's and South Beloit's Contribution
Values at December 31, 2000 will be $126,784,000 and $590,000, respectively, and
their aggregate initial interest in the Transco will approximate 24%. This
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19 These transmission-dependent utilities may also transfer an
inconsequential amount of transmission assets to the Transco.
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ownership percentage may fluctuate based on various factors, including the
number of participants in the Transco.
O. WPPI, and any other transmission-dependent tax-exempt entity that
participates in the Transco, will also be members of the Transco, but will not
be contributing transmission assets. Because the participation of tax exempt
entities like WPPI will reduce the transmission revenue otherwise received by
the Transco,20 such entities will purchase their interests for a price that is
designed to keep the other participants whole. It is anticipated that funds
received from WPPI and any other tax-exempt Transco member will be used by the
Transco to fund outlays necessary to pay start-up costs and construction
work-in-progress or be used as cash working capital. The tax-exempt purchase
price will be recalculated annually such that all tax-exempt participants will
be required to make additional cash contributions (or receive a refund of any
"over contributed" funds) to insure that the return otherwise payable to the
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20 Based on FERC precedent with respect to natural gas pipelines, the
revenue requirement reflected in the Transco's FERC petition includes provision
for income taxes payable by its members with respect to Transco income. The
participation of any tax exempt entity in the Transco will reduce that revenue
requirement and therefore each tax-exempt Transco member must make contributions
to the Transco to make up for the diminished return of the other members.
Alternatively, the Transco participants may agree on special allocations of
certain tax elements, rather than adjust the purchase price to be paid by such
tax exempt entities.
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other transmission-contributing participants is not diminished because of the
tax exempt entities' participation.
P. The Transco members will enter into an agreement (the "Operating
Agreement") that will govern the activities of the Transco. Because the Transco
is a manager-managed limited liability company 21, the Operating Agreement will
grant to the Corporate Manager full, complete and exclusive discretion to
exercise management control over the business of the Transco.22 As the manager
of the Transco, the Corporate Manager is obligated to provide all management
services to the Transco, which itself has no management. The Corporate Manager
may not resign or be removed as manager without the unanimous consent of the
Member Utilities and the Corporate Manager. (Initially, the members of the
Transco also control the Corporate Manager so if they believe that it is
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21 Wisconsin law allows Wisconsin limited liability companies to elect to
be either member-managed or manager-managed. The Transco has elected to be
manager-managed, and Wisconsin law specifically allows the manager of any
limited liability company to be a corporation. The Transco has designated the
Corporate Manager, a Wisconsin corporation which has been formed for this
purpose, to be its manager. The two legal entities, the Transco and the
Corporate Manager, are a single functioning unit, as the Corporate Manager
exists for the sole purpose of conducting the affairs of the Transco. The role
of the Corporate Manager in the management of the Transco corresponds to the
role of the general partner of a limited partnership.
22 This complete managerial control is analogous to complete voting
control.
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performing inadequately, their remedy is to replace the management of the
Corporate Manager, and not the Corporate Manager as manager of the Transco). The
Corporate Manager also is to have no other role than to serve as manager of the
Transco. Thus, it will negotiate all contracts on behalf of the Transco, and
make all required filings on the Transco's behalf. The Corporate Manager's
employees will either directly or by contract with third parties perform all the
functions necessary to run an electric transmission company. Accordingly, all of
the Corporate Manager's expenses will be for the account of and will be
reimbursed in full by the Transco. The Corporate Manager will have all powers as
a manager to do all things necessary and convenient to carry out the Transco's
business. The Transco will rely completely on the Corporate Manager to take all
actions required in the conduct of the Transco's business. The Corporate Manager
will not materially change its status, and in particular, will not engage in any
activities other than acting as the manager of the Transco as discussed above,
without prior approval by the Commission.
Q. In accordance with the Transco's Operating Agreement, the Member
Utilities will not be permitted to sell their interests in the Transco for a
period of three years following the Operations Date, except for transfers to
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another Member Utility or an affiliate of the transferring Member Utility.23
After the three-year period expires, any Transco interest may be freely
transferred, subject to any applicable legal constraints. The Member Utilities
may exchange all or a portion of their Transco member units for Class A shares
in the Corporate Manager on a one-for-one basis at any time after the three
years or, if earlier, one year after an initial public offering (the "IPO") by
the Corporate Manager.
R. No Member Utility will be obligated to make any additional capital
contributions to the Transco or the Corporate Manager; however, there may be
optional contributions if a majority of the Corporate Manager's directors
determine that such additional capital is appropriate. The Operating Agreement
will establish a target dividend rate of 80% of the Transco's earnings, subject
to adjustment.
S. As indicated, the Member Utilities will also purchase shares of
common stock of the Corporate Manager, for cash, in proportion to their
percentage interests in the Transco. It is expected that WPL will pay $10 per
share for an approximate 24% interest in the Corporate Manager. The Corporate
------------------------
23 The Operating Agreement defines an "affiliate" of the Member Utility as
any company within the same holding company system as defined in
ss.195.795(1)(i) of the Wisconsin Statutes.
24
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Manager will have two classes of stock: Class A and Class B.24 WPL will receive
approximately 24%, or 2,400 shares, of the nonvoting Class A shares.
Additionally, each Member Utility, including WPL, will receive one of the five
Class B voting shares to be issued at closing.25 Initially, each holder of a
Class B share will be entitled to appoint one of the Corporate Manager's
directors. All Class B shares will convert into Class A shares on the earlier of
(i) the ownership by the Corporate Manager of more than 50% of the Transco
membership units 26 or (ii) the tenth anniversary of the Operations Date,
unless the Corporate Manager's Board of Directors elects to override the
conversion. Class A shares will become voting shares upon the conversion of
------------------------
24 The Class A/Class B structure ensures that the Member Utilities will
have economic interests proportionate to the value of their contribution to the
Transco while still maintaining the desired per capita voting arrangement.
25 Neither South Beloit nor ESE will receive shares in the Corporate
Manager because their interests will be held by their respective corporate
parents.
26 The Corporate Manager's percentage ownership of the Transco will
increase through (i) exchange by a Member Utility of its respective Transco
member units for Corporate Manager Class A shares, which exchange will be
effected by the Corporate Manager's issuance of additional Class A shares in
exchange for the member units being converted; or (ii) its purchase of such
additional member units from the Transco with the proceeds of a Corporate
Manager Class A stock initial public offering ("IPO"), which purchase is
required by the terms of the Corporate Manager's organizational documents.
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Class B shares to Class A shares or after the Corporate Manager commences the
IPO. Each Class A and Class B share will be entitled to the same amount of
dividends.
There will be four independent directors of the Corporate Manager, both
before and after the IPO, who will have no affiliation with any entity engaged
in the production, sale, marketing, transmission or distribution of electricity
or natural gas. The Transco Legislation requires that the independent directors
be elected by a "majority vote of the voting security holders". As stated above,
initially, only the Class B shareholders of the Corporate Manager will be
entitled to vote and, prior to the IPO, they will, therefore, elect all
directors, including the independent directors. After the IPO, the Class A
shareholders will be entitled to vote. If, after the IPO, the Corporate Manager
owns 50% or less of the Transco member units, the Class A shareholders will
elect a majority of the Corporate Manager's directors, including the four
independent directors, and the Class B shareholders will elect a minority of the
Corporate Manager's directors. As stated above, when the Corporate Manager owns
more than 50% of the Transco member units, the Class B shares will convert to
Class A shares and thus the Class A shareholders will elect all directors.
The Corporate Manager may commence an IPO three years after the Operations
Date with the consent of a majority of the Board of Directors. Prior thereto, an
IPO is permitted only upon the unanimous consent of the Class B shareholders.
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The Member Utilities will not be able to exchange their Transco member units for
Corporate Manager Class A shares until the earlier of (i) a year after the IPO
or (ii) three years after the Operations Date. However, such limitation on the
exchange of member units could also be amended with the consent of all Class B
shareholders. In certain instances, it is possible that the Class B shareholders
would approve an early IPO without amending the exchange restrictions if, for
instance, they were seeking simply to raise capital from public sources. The
Transco legislation also allows any holder of 10% or more of the equity in the
Transco, after three years, to require the Transco to comply with all state and
federal laws necessary for the holder to sell or transfer its member units 27.
Because corporate stock is more readily marketable to the public than member
units in a limited liability company, the creation of the Corporate Manager as a
stock corporation will facilitate access to the public financial markets.
TRANSFERRED PROPERTIES
T. The Member Utilities will transfer ownership and control of their
respective transmission assets to the Transco. The Transco will acquire from the
------------------------
27 Section 196.485(3m)(a)5 of the Wisconsin Statutes.
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Member Utilities transmission facilities that operate at voltages of 345 kV, 138
kV and 69 kV. The assets to be transferred from all Member Utilities include:
o Transmission lines (including towers, poles and conductors) and
transmission substations;
o Transformers providing transformation within the bulk
transmission system and between the bulk and area transmission systems;
o Lines providing connections to generation sources and step-up
(plant) substations;
o Radial taps from the transmission system up to, but not
including, the facilities that establish the final connection to
distribution facilities or retail customers;
o Substations that provide primarily a transmission function;
o Voltage control devices and power flow control devices directly
connected to the transmission system; and
o WPL's systems operation center located in Stoughton, Wisconsin.28
It is expected that, as of December 31, 2000, the original cost of the WPL
Transmission Assets and the South Beloit Transmission Assets will be
approximately $314,276,000 and $678,000, respectively. The net book value
(original cost less accumulated depreciation) of the WPL Transmission Assets and
the South Beloit Transmission Assets at December 31, 2000 is expected to be
approximately $177,650,000 and $439,000, respectively. The Contribution Value of
------------------------
28 The other Member Utilities will also be contributing similar assets to
the Transco.
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the WPL Transmission Assets and the South Beloit Transmission Assets will be
approximately $126,784,000 and $590,000, respectively.
It is expected that, as of December 31, 2000, the original cost of the
transmission assets of WEPCO and ESE will be approximately $442.9 million and
$41 million, respectively. The net book value (original cost less accumulated
depreciation) of the WEPCO transmission assets and the ESE transmission assets
at December 31, 2000 is expected to be approximately $230.0 million and $31.4
million, respectively. The Contribution Value of the WEPCO transmission assets
and the ESE transmission assets will be approximately $214 million and $30
million, respectively.
It is expected that, as of December 31, 2000, the original cost of the WPS
transmission assets will be approximately $139 million. The net book value
(original cost less accumulated depreciation) of the WPS transmission assets at
December 31, 2000 is expected to be approximately $70 million. The Contribution
Value of the WPS transmission assets will be approximately $63 million.
It is expected that, as of December 31, 2000, the original cost of the MG&E
transmission assets will be approximately $83.4 million. The net book value
(original cost less accumulated depreciation) of the MG&E transmission assets at
29
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December 31, 2000 is expected to be approximately $46.6 million. The
Contribution Value of the MG&E transmission assets will be approximately $33.4
million.
U. The facilities that WPL and South Beloit will transfer to the
Transco do not include distribution facilities used to provide retail service or
generation facilities. Distribution facilities include all facilities with
voltages below 50 kV, including the final circuit connection to substations
providing transformation or connection to any retail customer regardless of
voltage level.
V. WPL currently provides FERC jurisdictional transmission service to
certain customers over distribution facilities operated at voltages of less than
50 kV. The Transco will continue the provision of such service as WPL's agent.
Consequently, transmission customers that use WPL's distribution system will, in
the future, be able to secure from the Transco all necessary transmission
services over WPL's current transmission and distribution system.
W. The Transco will be under a statutory mandate to transfer
operational control of its jurisdictional facilities to the Midwest ISO or its
successor. Prior to the transfer, the Transco will have operational control of
the transmission system contributed by Wisconsin utilities; provide ancillary
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services; operate an Open Access Same-Time Information System ("OASIS") in
conformance with FERC Order No. 889; and administer the Transco OATT. The
Transco also will be responsible for the maintenance of the transmission
facilities under its ownership and control and will assume responsibility for
transmission system planning. After the transfer to the Midwest ISO, the Transco
will make changes to its OATT to accommodate operational differences between the
Transco and the Midwest ISO open access transmission tariff.
X. WPL and South Beloit will each enter into a bill of sale, deeds,
easement assignments and other documentation with the Transco governing the
conveyance of their respective transmission assets. The transmission assets
transferred to the Transco will include WPL's rights and interest in any
contracts under the Alliant Energy Open Access Transmission Tariff ("Alliant
Energy OATT").
Y. In addition to the assets from WPL and South Beloit, the Transco
seeks authority to acquire transmission assets from MGE, WEPCO, WPS and ESE in
exchange for Transco member units based on the Contribution Value of such
transferred assets. For a description of these assets, including original cost,
net book value and Contribution Value, see Paragraph T hereof. The Transco also
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seeks authority to acquire the incidental transmission facilities of
transmission-dependent utilities, such as WPPI's member municipal utilities. The
Transco will assign a nominal value of $10 to each unit of membership interest
initially issued in exchange for transmission assets.
Z. The Transco will offer ancillary services under the Transco's OATT.
Because the Transco will own no generating facilities, it will purchase
ancillary services from third parties and resell them under its OATT. The
Transco expects to enter into agreements to purchase must run and ancillary
services from generators in the control areas of WEPCO, WPL, WPS and MGE. The
Transco will contract for must-run operations and ancillary services with the
generators located in its control area and connected to its transmission system.
In accordance with Wisconsin law, the Transco will not, however, engage in the
purchase and sale of energy other than to obtain necessary ancillary services
required by its customers.
AA. Upon receipt of necessary regulatory approvals, the Transco will
begin providing open access transmission service under its OATT to those
existing open access customers currently served by WPL under the existing
Alliant Energy OATT and to any other eligible customer requesting transmission
service from the Transco. WPL and South Beloit will become transmission
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customers of the Transco under its transmission tariff. Where WPL is responsible
for providing transmission service under agreements or tariffs predating FERC
Order No. 888 ("grandfathered agreements"), the Transco will make its
transmission system available under the Transco OATT in order to provide
transmission service to customers under the grandfathered agreements.
FINANCING
BB. The Transco will initially obtain funds externally through
short-term debt financing under a Credit Agreement between the Transco and Bank
One, N.A., as Agent ("Credit Facility").29 The Transco now seeks to increase
the authorized principal amount of borrowings under the Credit Facility to $125
million. To provide financing for general corporate purposes, including working
capital requirements, and to fund construction spending to undertake large scale
capital improvements to the Wisconsin transmission system necessary to maintain
reliability, the Transco proposes to issue from time to time, through June 30,
------------------------
29 The Commission has previously authorized borrowings of up to $30 million
under the Credit Facility. The initial Credit Facility will, however, provide
for only $25 million of borrowings. In connection therewith, Alliant Energy has
authority to deliver a guaranty agreement to the lenders under the Credit
Facility relating to up to $30 million of borrowings by the Transco under the
Credit Facility. See HCAR No. 27206 (Aug. 2, 2000).
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2004, short-term debt consisting of borrowings under the Credit Facility, the
issuance of commercial paper or other forms of short-term financing. The
maturity of such debt will not exceed one year. The Transco seeks authority to
amend the Credit Facility without further Commission authorization provided that
the maturity date does not extend beyond June 30, 2004, and the aggregate
principal amount of authorized borrowings does not exceed $125 million.
CC. The Transco will sell commercial paper, from time to time, in
established domestic or European commercial paper markets to dealers at the
prevailing discount rate per annum, or at the prevailing coupon rate per annum,
at the date of issuance. It is expected that the dealers acquiring commercial
paper from the Transco will re-offer such paper at a discount to corporate,
institutional and, with respect to European commercial paper, to individual
investors.
DD. Back-up bank lines of credit for 100% of the outstanding amount of
commercial paper are generally required by credit rating agencies. The Credit
Facility will back-up the Transco's commercial paper program, thus negating the
need for additional lines of credit.
EE. The Transco also proposes to issue from time to time, through June
30, 2004, long-term debt consisting of debentures, which may be in the form of
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medium-term notes, convertible debt, subordinated debt, bank borrowings, other
debt securities or other forms of long-term financing. Any long-term debt
security would have a maturity ranging from one to 50 years. Debentures and
medium-term notes would be issued under an indenture. The amount of short-term
and long-term debt outstanding at any time, including debt under the Credit
Facility, will not exceed, in the aggregate, $400 million.
FF. Any short-term or long-term debt security or credit facility would
have such designation, aggregate principal amount, interest rate(s) or methods
of determining the same (subject to paragraph HH below), terms of payment of
interest, collateral, redemption provisions, non-refunding provisions, sinking
fund terms, conversion or put terms and other terms and conditions as the
Transco and the Corporate Manager may determine at the time of issuance.
GG. The Transco and the Corporate Manager propose to issue from time
to time through June 30, 2004: (i) Class A shares of the Corporate Manager in
connection with the IPO; (ii) additional Transco member units to the Corporate
Manager in exchange for the proceeds from that IPO; (iii) Class A shares of the
Corporate Manager to Member Utilities seeking to exchange their respective
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Transco member units for such shares 30; (iv) Class A and Class B shares of the
Corporate Manager to future Member Utilities ("Additional Member Utilities")
when such Additional Member Utilities become members of the Transco, (v) member
units in the Transco to those Additional Member Utilities, (vi) preferred stock
of the Corporate Manager and (vii) other equity securities. Applicants
respectfully request that the Commission reserve jurisdiction over all such
equity securities except with respect to (i) Class A Corporate Manager shares
issued to Member Utilities in connection with their exchange of Transco member
units for such Class A shares and (ii) Class A and Class B Corporate Manager
shares and Transco member units issued to Additional Member Utilities. The
aggregate issuance price of such equity securities will not exceed $500 million.
The dividend rate on any series of preferred securities issued by the Corporate
Manager will not exceed 500 basis points over the yield to maturity of a U.S.
Treasury security having a remaining term equal to the term of that series of
preferred securities at the time of issuance. Such preferred securities may have
mandatory redemption dates.
------------------------
30 Such exchange is discussed above in Paragraph Q.
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HH. Such securities may be issued and sold pursuant to standard
underwriting agreements. Public distribution may be effected through private
negotiations with underwriters, dealers or agents, or through competitive
bidding among underwriters. In addition, such securities may be issued and sold
through private placements or other non-public offerings to one or more persons.
All such debt instruments and stock sales will be at rates or prices and under
conditions negotiated, or based upon, or otherwise determined by, competitive
capital markets. In no event, however, will the effective cost of money on
short-term debt exceed 300 basis points over the London Interbank Offered Rate
for maturities of one year or less in effect at the time. The interest rate on
long-term debt will not exceed 500 basis points over the yield-to-maturity of a
U.S. Treasury security having a remaining term approximately equal to the
average life of such debt.
II. The Transco also requests authorization to enter into interest
rate hedging transactions with respect to existing indebtedness ("Interest Rate
Hedges"), subject to certain limitations and restrictions, in order to reduce or
manage interest rate cost. Interest Rate Hedges would only be entered into with
counterparties ("Approved Counterparties") whose senior debt ratings, or the
senior debt ratings of the parent companies of the counterparties, as published
37
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by Standard and Poor's Ratings Group, are equal to or greater than BBB, or an
equivalent rating from Moody's Investors Service, Fitch, or Duff and Phelps.
Interest Rate Hedges will involve the use of financial instruments commonly
used in today's capital markets, such as interest rate swaps, caps, collars,
floors, and structured notes (i.e., a debt instrument in which the principal
and/or interest payments are indirectly linked to the value of an underlying
asset or index), or transactions involving the purchase or sale, including short
sales, of U.S. Treasury obligations. The transactions would be for fixed periods
and stated notional amounts. Fees, commissions and other amounts payable to the
counterparty or exchange (excluding, however, the swap or option payments) in
connection with an Interest Rate Hedge will not exceed those generally
obtainable in competitive markets for parties of comparable credit quality.
In addition, the Transco requests authorization to enter into interest rate
hedging transactions with respect to anticipated debt offerings (the
"Anticipatory Hedges"), subject to certain limitations and restrictions. Such
Anticipatory Hedges would only be entered into with Approved Counterparties, and
would be utilized to fix and/or limit the interest rate risk associated with any
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new issuance through (i) a forward sale of exchange-traded U.S. Treasury futures
contracts, U.S. Treasury obligations and/or a forward swap (each a "Forward
Sale"), (ii) the purchase of put options on U.S. Treasury obligations (a "Put
Options Purchase"), (iii) a Put Options Purchase in combination with the sale of
call options on U.S. Treasury obligations (a "Zero Cost Collar"), (iv)
transactions involving the purchase or sale, including short sales, of U.S.
Treasury obligations, or (v) some combination of a Forward Sale, Put Options
Purchase, Zero Cost Collar and/or other derivative or cash transactions,
including, but not limited to structured notes, caps and collars, appropriate
for the Anticipatory Hedges.
Anticipatory Hedges may be executed on-exchange ("On-Exchange Trades") with
brokers through the opening of futures and/or options positions traded on the
Chicago Board of Trade ("CBOT"), the opening of over-the-counter positions with
one or more counterparties ("Off-Exchange Trades"), or a combination of
On-Exchange Trades and Off-Exchange Trades. The Transco will determine the
optimal structure of each Anticipatory Hedge transaction at the time of
execution. The Transco may decide to lock in interest rates and/or limit its
exposure to interest rate increases. All open positions under Anticipatory
Hedges will be closed on or prior to the date of the new issuance and the
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Transco will not, at any time, take possession or make delivery of the
underlying U.S. Treasury Securities.
The Applicants will comply with existing and future financial disclosure
requirements of the Financial Accounting Standards Board associated with hedging
transactions.31 Such hedging transactions will qualify for hedge accounting
treatment under generally accepted accounting principles.
JJ. The Applicants are not at this time requesting Commission approval
for any further transaction by the Transco or the Corporate Manager. In the
event Applicants propose to engage in any transaction resulting in a material
change in the corporate structure, management, or control of the Corporate
Manager or Transco for which approval of the Commission may be required under
the Act, the Applicants will undertake to file a Post-Effective Amendment
requesting such approval.
ITEM 2. FEES, COMMISSIONS AND EXPENSES.
------------------------------
The fees, commissions and expenses incurred or to be incurred by Alliant
Energy and WPL in connection with the filing of this application are estimated
not to exceed $200,000. The total costs incurred or to be incurred in connection
------------------------
31 The proposed terms and conditions of the Interest Rate Hedges and
Anticipatory Hedges are substantially the same as the Commission has approved in
other cases. See New Century Energies, Inc., et al., Holding Co. Act Release No.
27000 (April 7, 1999); and SCANA Corporation., et al., Holding Co. Act Release
No. 27137 (February 14, 2000).
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with the formation and start-up of the Transco and Corporate Manager and the
transfer of transmission assets to the Transco are estimated not to exceed
approximately $5 million, which includes legal expenses incurred in connection
with obtaining necessary regulatory approvals, accounting and advisory fees. The
foregoing fees and expenses do not include the fees and expenses of any debt
offerings by the Transco, such as commitment fees, compensating balances,
placement fees and dealer discounts on commercial paper offerings. Such fees and
expenses will not exceed 5% of the amount of the proceeds of any such debt
offering by the Transco. A statement with respect to the fees, commissions and
expenses incurred or to be incurred in connection with the Corporate Manager IPO
will be filed by a Post-Effective amendment hereto.
ITEM 3. APPLICABLE STATUTORY PROVISIONS.
-------------------------------
Sections 6(a), 7, 9(a), 10, 11, 12 and 13 of the Act and Rules 43, 44, 54,
90 and 91 thereunder apply to the proposed transactions.
When the transmission assets of the Member Utilities are transferred from
the Member Utilities to the Transco, the Transco, and the Corporate Manager, by
virtue of its ownership interest in, and management of, the Transco, will each
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become an "electric utility company" as defined in Section 2(a)(3) of the Act as
well as a "public utility company" as defined in Section 2(a)(5) of the Act.
Because Alliant Energy will be indirectly acquiring the securities of the
Transco and the Corporate Manager, and because the Transco, which may be a
subsidiary of a registered holding company, will be acquiring utility assets
from the Member Utilities, the transactions contemplated herein will be subject
to Section 9(a) of the Act. Thus, Applicants believe that the proposed
transactions cannot proceed without the Commission's approval pursuant to
Section 10 of the Act. The relevant statutory standards to be satisfied are set
forth in Sections 10(b), 10(c) and 10 (f) of the Act.
A. SECTION 10(b)
Section 10(b) of the Act provides that, if the requirements of Section
10(f) are satisfied, the Commission shall approve an acquisition under Section
9(a) unless the Commission finds that:
(1) such acquisition will tend towards interlocking relations or the
concentration of control of public-utility companies, of a kind or to an
extent detrimental to the public interest or the interest of investors or
consumers;
(2) in case of the acquisition of securities or utility assets, the
consideration, including all fees, commissions, and other remuneration, to
whomsoever paid, to be given, directly or indirectly, in connection with
such acquisition is not reasonable or does not bear a fair relation to the
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sums invested in or the earning capacity of the utility assets to be
acquired or the utility assets underlying the securities to be acquired; or
(3) such acquisition will unduly complicate the capital structure of
the holding company system of the applicant or will be detrimental to the
public interest or the interest of investors or consumers or the proper
functioning of such holding company system.
1. Section 10(b)(1). The proposed transactions will not tend towards
interlocking relations or the concentration of control of public utility
companies, of a kind or to an extent detrimental to the public interest or the
interest of investors or consumers.
The Corporate Manager will initially have a ten member Board of Directors.
While five directors will be appointed by the Member Utilities, four directors
will be independent, as mandated by the Transco Legislation. The remaining
director will be the chief executive officer of the Corporate Manager. The
employees of the Transco and the Corporate Manager will not be employees of any
of the Member Utilities. Therefore, any interlocking relations will be minimal,
at most.
Similarly, the proposed transactions will not tend toward any
"concentration of control of public-utility companies" that is detrimental to
the public interest, consumers or investors. The end result of the formation of
the Transco will not be the concentration of control over the Wisconsin
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transmission system, but rather the dilution of control. There will be at least
five Member Utilities with input, through the Corporate Manager, over decisions
as to the management and operation of the Transco's transmission assets. One of
these Member Utilities -- WPPI -- currently has no such input. Indeed, the
creation of the Transco will encourage competition, rather than concentrate
control.
2. Section 10(b)(2) - (a) Fairness of Consideration. Section 10(b)(2) of
the Act requires the Commission to determine whether the consideration in
connection with a proposed acquisition of securities is reasonable and whether
it bears a fair relation to the investment in and the earning capacity of the
utility assets underlying the securities being acquired. All transmission assets
that will be transferred to the Transco will be valued based on the same
methodology. This methodology is generally mandated by the Transco Legislation
and the specifics have been arrived at as the result of arms-length negotiations
among all of the Member Utilities, subject to the review and approval of the
Wisconsin Commission. Applicants further believe that such consideration bears a
fair relation to the investment in and the earning capacity of the transmission
assets to be transferred because it is based on the Contribution Value of those
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assets. Because the Transco's rates will also be subject to FERC approval, it
can be expected that those rates (which will largely also be based on the same
Contribution Value) will permit the Transco to earn a fair return on them as
well. This being the case, all Member Utilities, including WPL and South Beloit,
can expect to earn a fair return on their investment.
(b) Reasonableness of Fees. An estimate of the fees and expenses to be paid
in connection with the proposed transactions is set forth in Item 2 hereof. The
estimated amounts to be paid are fees required to be paid to governmental
bodies, fees for necessary professional services, and other expenses incurred or
to be incurred in connection with carrying out the proposed transactions.
Applicants believe that such fees and expenses are reasonable and customary for
a transaction of this kind, and that the standards of Section 10(b)(2) are thus
satisfied.
3. Section 10(b)(3) - Capital Structure. Section 10(b)(3) requires that the
Commission determine whether the proposed transactions will unduly complicate
Alliant Energy's capital structure or will be detrimental to the public
interest, the interests of investors or consumers or the proper functioning of
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Alliant Energy's system. The corporate capital structure of Alliant Energy after
the consummation of the proposed transactions will not be unduly complicated.
The ownership structure of the Corporate Manager and the Transco has been
designed to simplify management of the Transco and to facilitate public
investment in the Transco enterprise through a public offering of stock in the
Corporate Manager, such stock being more attractive to investors than would be
the equivalent LLC interests in the Transco. Although such structure introduces
an additional corporate layer into the Alliant Energy system, the Transco and
the Corporate Manager will, as a practical matter, function as one entity. The
Corporate Manager has been introduced simply to make public investment in the
Transco enterprise more "investor-friendly".32
In certain instances, the Commission has found it appropriate to "look
through" intermediate holding companies such as the Corporate Manager for
purposes of its Section 11(b)(2) analysis. See Exelon Corp., HCAR No. 27256
------------
(Oct. 19, 2000) (finding that an intermediate holding company structure designed
to minimize the tax impact of a merger did not implicate the abuses Section
------------------------
32 As stated above in paragraph G of Item 1, after the transactions
contemplated herein, WPL and the Corporate Manager will each file an exemption
statement on Form U-3A-2 pursuant to Rule 2 under the Act.
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11(b)(2) was designed to prevent); National Grid Group plc, HCAR No. 27154 (Mar.
-----------------------
15, 2000) (finding that intermediate holding companies created to capture the
economic efficiencies of a cross-border transaction did not implicate the abuses
Section 11(b)(2) was designed to prevent). Applicants believe that such a "look
through" is appropriate in the Section 11(b)(2) analysis of the contemplated
transactions although, unlike the intermediate holding companies in the Exelon
------
and National Grid orders, the Corporate Manager will have public investors.
-------------
Nevertheless, Applicants believe that the Commission should find that the
existence of the Corporate Manager will not "unduly or unnecessarily complicate
the structure" of the Alliant Energy system. The nature of the per capita voting
rights in the Corporate Manager adequately protects the rights of the minority
interests that possess such voting rights. Moreover, the Corporate Manager
exists to facilitate public investment in the Transco, and ultimately to
transition the Transco into a publicly-held company, at which point it will
cease to be a subsidiary of a registered public utility holding company.
Therefore, none of the abuses associated with publicly-held minority interests
will be present and, thus, the existence of the Corporate Manager will not
implicate the abuses Section 11(b)(2) was designed to prevent.
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In any event, as set forth more fully in this Application/Declaration, the
proposed formation of the new transmission company is expected to result in
benefits to the public and to consumers and investors of the Alliant Energy
holding-company system.
B. SECTION 10(c)
Section 10(c) of the Act provides that:
Notwithstanding the provisions of subsection (b), the Commission shall
not approve:
(1) an acquisition of securities or utility assets, or of any
other interest, which is unlawful under the provisions of Section 8 or
is detrimental to the carrying out of the provisions of Section 11; or
(2) the acquisition of securities or utility assets of a public
utility or holding company unless the Commission finds that such
acquisition will serve the public interest by tending towards the
economical and efficient development of an integrated public utility
system . . . .
1. Section 10(c)(1). Consistent with the standards set forth in Section
10(c)(1) of the Act, the proposed acquisition of securities will not be unlawful
under the provisions of Section 8 of the Act, or detrimental to the carrying out
of the provisions of Section 11 of the Act.
Section 8 prohibits a registered holding company or any of its subsidiaries
from acquiring, owning interests in or operating both a gas utility company and
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an electric utility company serving substantially the same area if prohibited by
state law, and is thus not applicable to the transactions contemplated herein.
Section 11(a) of the Act requires the Commission to examine the corporate
structure of registered holding companies to ensure, among other things, that
unnecessary complexities are eliminated and voting powers are fairly and
equitably distributed. As discussed above, the Transco/Corporate Manager
ownership structure has been designed to facilitate public investment in the
Transco enterprise and is therefore not unnecessarily complex. Moreover, voting
powers have been fairly allocated among the Transco participants. Accordingly,
the proposed transactions meet the standards of Section 11(a) of the Act.
2. Section 10(c)(2). As the following discussion will demonstrate, the
proposed transactions will serve the public interest by tending towards the
economical and efficient development of an integrated public utility system, as
required by Section 10(c)(2) of the Act.
49
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(a) Efficiencies and Economies. As described more fully above, the proposed
transactions tend towards the following efficiencies and economies: (i) greater
corporate and organizational separation of transmission from generation; and
(ii) by tying together control, planning, maintenance and financial
responsibilities for the Member Utilities' transmission facilities into a single
company having an independent, streamlined and cost-efficient operation,
synergies will be created that result in better service in the region and
non-discriminatory access for all transmission users will be assured.
(b) Integrated Public Utility System. As applied to electric utility
companies, the term "integrated public utility system" is defined in Section
2(a)(29)(A) of the Act as:
a system consisting of one or more units of generating plants and/or
transmission lines and/or distributing facilities, whose utility assets,
whether owned by one or more electric utility companies, are physically
interconnected or capable of physical interconnection and which under
normal conditions may be economically operated as a single interconnected
and coordinated system confined in its operation to a single area or
region, in one or more states, not so large as to impair (considering the
state of the art and the area or region affected) the advantages of
localized management, efficient operation, and the effectiveness of
regulation.
50
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The Commission has previously taken notice of developments that have
occurred in the gas and electric industries in recent years, and has interpreted
the Act and analyzed proposed transactions in light of these changed and
changing circumstances. See, e.g., American Electric Power Co., HCAR No. 27186
---------------------------
(Jun. 14, 2000) ("AEP Order"); New Century Energies, Inc., HCAR No. 26748 (Aug.
--------- --------------------------
1, 1997) (approving transactions relating to combination of a Colorado gas and
electric utility company and intrastate exempt holding company and a New Mexico
electric utility company), citing Hearing on Regulation of Public Utility
Holding Companies Before Subcomm. on Telecommunications and Finance and Subcomm.
on Energy and Power of the House of Representatives Comm. on Commerce, 104th
Cong., 1st Sess. (Aug. 4, 1995) (testimony of Arthur Levitt, Chairman, SEC). See
also Rust v. Sullivan, 500 U.S. 173, 186-87 (1991) ("an agency is not required
----------------
to" establish rules of conduct to last forever, "but rather must be given ample
latitude to "adapt [its] rules and policies to the demands of changing
circumstances.") (citations omitted); Shawmut Assn. v. SEC, 146 F.2d 791, 796-97
--------------------
(1st Cir. 1945) (an agency "is expected to treat experience not as a jailer but
as a teacher").
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On the basis of the statutory definition above, the Commission has
established four standards that must be met before the Commission will find that
an integrated public utility system will result from a proposed transaction:
(1) the utility assets of the system are physically interconnected or
capable of physical interconnection;
(2) the utility assets, under normal conditions, may be economically
operated as a single interconnected and coordinated system;
(3) the system must be confined in its operations to a single area or
region; and
(4) the system must not be so large as to impair (considering the
state of the art and the area or region affected) the advantages of
localized management, efficient operation, and the effectiveness of
regulation.
Environmental Action, Inc. v. SEC, 895 F.2d 1255, 1263 (9th Cir. 1990), quoting
---------------------------------
In re Electric Energy, Inc., 38 S.E.C. 658, 668 (1958).
---------------------------
The proposed transactions satisfy all four of these requirements with
respect to both the Transco system and the Alliant Energy system, post-Transco,
which will consist of those current Alliant Energy transmission assets that are
not transferred to the Transco (i.e., the Non-Wisconsin Facilities, which are
located in Iowa, and the East Facilities) and Alliant Energy's approximate 24%
interest in the Transco (the "Post-Transco Alliant Energy Transmission System").
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In examining proposed transactions to determine whether the integration
requirements have been satisfied, the Commission has "interpreted the Act and
analyzed transactions in the light of . . . changed and changing circumstances."
AEP Order. Applicants believe that the Transco Legislation, as well as the
recent FERC Order No. 2000, both of which strongly encourage transmission
company formation, constitute such changing circumstances which the Commission
should consider when evaluating the proposed transactions.
PHYSICAL INTERCONNECTION. In view of the above, the facts presented clearly
support a finding that the utility assets of the Transco will be "physically
interconnected or capable of physical interconnection" within the meaning of
Section 2(a)(29)(A) of the Act once the transactions contemplated herein are
completed. Indeed, as discussed in paragraph K of Item 1, the utility assets to
be owned by the Transco are already physically interconnected and operated as a
part of MAIN. Those assets are also physically interconnected with the Alliant
Energy transmission system assets that will not be transferred to the Transco.
All such interconnections will remain in place after the transactions
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<PAGE>
contemplated herein occur. Thus, the entire Post-Transco Alliant Energy
Transmission System will also be physically interconnected.
SINGLE INTERCONNECTED AND COORDINATED SYSTEM. Section 2(a)(29)(A) of the
Act requires that the utility assets, under normal circumstances, may be
"economically operated as a single interconnected and coordinated system." The
Commission has interpreted this language to refer to the physical operation of
utility assets as a system in which, among other things, the generation and/or
flow of current within the system may be centrally controlled and allocated as
need or economy directs. See UNITIL Corp., HCAR No. 25524 (Apr. 24, 1992). As
------------
discussed in Paragraph K of Item 1, the Post-Transco Alliant Energy Transmission
System will continue to be operated in a manner that satisfies the standard of
economic and coordinated operations in Section 2(a)(29)(A) of the Act. In
effect, the proposed transactions will result in WPL and South Beloit
transferring full ownership of their current transmission assets for a 24%
interest, initially, in the Transco, which will own and operate a much larger
mix of transmission assets in Wisconsin. Importantly, this change in form of
ownership is not expected to have any effect on WPL's and South Beloit's use and
enjoyment of the transferred assets, except that, in the future, they will have
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to contract with he Transco for transmission service under the Transco's
open-access tariffs. Moreover, the proposed transactions are expected to result
in greater coordination and more efficient allocation of the provision of
transmission services within the area served by the Transco.
SINGLE AREA OR REGION. The "single integrated system" of the Post-Transco
Alliant Energy Transmission System will initially be the central and eastern
portions of the State of Wisconsin and small adjacent areas of the Michigan
Upper Peninsula and Illinois, as well as Iowa. Through the membership of
additional transmission-owning utilities, the Transco's system may grow to
include other parts of Wisconsin and portions of other Midwestern states.
LOCALIZED MANAGEMENT, EFFICIENT OPERATION AND EFFECTIVE REGULATION. The
creation of the Transco will not impair localized management, efficient
operation or effective regulation by reason of its size. Moreover, the
Commission's past decisions on "localized management" show that the proposed
transactions fully preserve the advantages of localized management. In such
cases, the Commission has evaluated localized management in terms of: (i)
responsiveness to local needs, see American Electric Power Co., HCAR No. 20633
--------------------------
55
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(July 21, 1978)(advantages of localized management evaluated in terms of whether
an enlarged system could be "responsive to local needs"); General Public
--------------
Utilities Corp., 37 S.E.C. 28, 36 (1956)(localized management evaluated in terms
---------------
of "local problems and matters involving relations with consumers"); (ii)
whether management and directors were drawn from local utilities, see Centerior
---------
Energy Corp., HCAR No. 24073 (April 29, 1986)(advantages of localized management
------------
would not be compromised by the affiliation of two electric utilities under a
new holding company because the new holding company's "management [would be]
drawn from the present management" of the two utilities); (iii) the preservation
of corporate identities, see Northeast Utilities, HCAR No. 25221 (December 21,
-------------------
1990) (utilities "will be maintained as separate New Hampshire corporations . .
. [t]herefore the advantages of localized management will be preserved");
Columbia Gas System, Inc., HCAR No. 24599 (March 15, 1988)(benefits of local
-------------------------
management maintained where the utility to be added would be a separate
subsidiary); and (iv) the ease of communications, see American Electric Power
-----------------------
Co., HCAR No. 20633 (July 21, 1978)(distance of corporate headquarters from
---
local management was a "less important factor in determining what is in the
public interest" given the "present-day ease of communications and
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transportation"). These elements will all be satisfied here. The Transco is
being created in response to local needs. The Wisconsin legislature has
determined that the Transco will improve electric service in Wisconsin. Each
local utility will elect one director to the Corporate Manager's board of
directors. Each Member Utility will continue to exist after the transmission
assets are transferred to the Transco, as will the non-Member Utility operating
companies of the Alliant Energy system. Finally, communication between the
Transco and its members will flow easily.33
C. SECTION 10(f)
Section 10(f) provides that
The Commission shall not approve any acquisition as to which an application
is made under this section unless it appears to the satisfaction of the
Commission that such State laws as may apply in respect of such acquisition
have been complied with, except where the Commission finds that compliance
with such State laws would be detrimental to the carrying out of the
provisions of section 11.
------------------------
33 In addition, under the Transco Legislation, the Transco and/or the
Midwest ISO are obligated, to the maximum extent practicable, to "eliminate[]
advantages in electric generation, wholesale and retail markets that are
otherwise related to ownership, control or operation of transmission facilities"
and "[s]atisf[y] the reasonable needs of transmission users in this state for
reliable, low-cost and competitively priced electric service". Section
196.485(3)(c) of the Wisconsin Statutes.
57
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As discussed above, the Transco is being created pursuant to, and in
accordance with, Wisconsin law. WPL and South Beloit have filed applications
with the Wisconsin Commission and the Illinois Commission, respectively (copies
of both applications are attached hereto as Exhibits D-7 and D-9, respectively).
Thus, the requirements Section 10(f) are satisfied.
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 "foreign utility company" ("FUCO"), as
defined in Sections 32 and 33, respectively, 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.
Alliant Energy is in compliance with all requirements of Rule 53(a).
Alliant Energy's "aggregate investment" (as defined in Rule 53(a)(1)(i)) in all
EWGs and FUCOs at September 30, 2000 was $201.7 million, or about 16% of Alliant
Energy's "consolidated retained earnings" ($1,263.4 million for the four
quarters ended September 30, 2000 as defined in Rule 53(a)(1)(ii) and including
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Alliant Energy's accumulated other comprehensive income). In addition, Alliant
Energy has complied and will comply with the record-keeping requirements of Rule
53(a)(2), the limitation under Rule 53(a)(3) on the use of the Operating
Companies' 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. Finally, none of the circumstances
described in Rule 53(b) has occurred or is continuing. Alliant Energy need not
make the affirmative demonstration contemplated by Rule 53(c) because Alliant
Energy has satisfied the requirements of Rule 53(a) and (b).
ITEM 4. REGULATORY APPROVALS.
--------------------
WPL's application to the FERC seeking authorization to transfer the WPL
Transmission Assets to the Transco has been approved. South Beloit filed a
corresponding application with the FERC with respect to the South Beloit
Transmission Assets which has also been approved. The FERC has also separately
approved the acquisition by the Transco of the transmission assets of the
transmission-owning Member Utilities other than WPL and South Beloit. The
Transco has also filed an application with the FERC seeking approval of the
Transco OATT. Based on the FERC's December 14, 2000 order approving the Transco
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OATT, the Transco's December 15, 2000 Section 205 rate filing and FERC
precedent, the Transco can begin operations on January 1, 2001 without violating
the Federal Power Act. In addition, the Wisconsin Commission has approved
certain elements of the proposed transactions. Specifically, the Wisconsin
Commission authorized: (i) WPL and South Beloit to become members of the Transco
by contributing their transmission facilities to the Transco; (ii) the Corporate
Manager to acquire its interest in the Transco; (iii) the Transco to acquire the
transmission facilities of WEPCO, ESE, WPL, South Beloit, WPS and MGE in
exchange for its membership interests; and (iv) the Transco to sell membership
interests to WPPI and the Corporate Manager. Finally, South Beloit has made a
notice filing with the Illinois Commerce Commission and, in accordance with
Section 16-111(g) of the Illinois Public Utilities Act, no further Illinois
regulatory action is needed for South Beloit to transfer its transmission assets
to the Transco. Except as stated above, no state commission or federal
commission, other than this Commission, has jurisdiction over the proposed
transactions. In addition, it is expected that other Member Utilities will make
the requisite state, FERC and Commission applications with respect to certain
aspects of the transactions discussed herein.
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ITEM 5. PROCEDURE.
---------
The Commission has published a notice under Rule 23 with respect to the
filing of this Application/Declaration and no hearing has been requested. The
applicants request that the Commission's Order be issued as soon as practicable
in order to accommodate a closing before December 29, 2000. This will facilitate
the Member Utilities' meeting the January 1, 2001 deadline contemplated by the
Transco Legislation for the commencement of Transco operations and the timely
completion of the transmission asset transfers that are predicated to the
Wisconsin public utility holding companies' relief from the Wisconsin
non-utility asset cap limit.
The applicants further 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, hereby waive a recommended decision by a hearing
officer or any other responsible officer of the Commission, and consent 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.
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ITEM 6. EXHIBITS AND FINANCIAL STATEMENTS.
---------------------------------
A. - EXHIBITS.
--------
A-1 Form of Articles of Organization of the Transco. - - Incorporated by
reference to Alliant Energy SEC File No. 70-9695.
A-2 Form of Operating Agreement of the Transco. - - Incorporated by reference
to Alliant Energy SEC File No. 70-9695.
A-3 Form of Articles of Incorporation of the Corporate Manager. - -
Incorporated by reference to Alliant Energy SEC File No. 70-9695.
A-4 Form of By-laws of the Corporate Manager. - - Incorporated by reference to
Alliant Energy SEC File No. 70-9695.
A-5 Form of Articles of Organization of NewCo.
A-6 Form of Operating Agreement of NewCo.
A-7 Form of Amended and Restated Articles of Incorporation of the Corporate
Manager.
A-8 Form of Amended and Restated Bylaws of the Corporate Manager.
A-9 Form of Shareholders Agreement of the Corporate Manager.
B-1 Form of O&M Agreement-- previously filed.
B-2 Form of Services Agreement - previously filed.
B-3 Reserved.
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B-4 Form of Agency Agreement - previously filed.
B-5 Form of Asset Contribution Agreement - previously filed.
B-6 Form of Transco Forming Party Agreement - previously filed.
B-7 Form of Transco Generation-Transmission Interconnection Agreement -
previously filed.
B-8 Form of Network Operating Agreement - previously filed.
B-9 Form of Transco Distribution-Transmission Interconnection Agreement -
previously filed.
C Not Applicable.
D-1 Application of WPL to the FERC - Previously filed.
D-2 Application of South Beloit to the FERC - previously filed.
D-3 Application of Alliant Energy Corporate Services, Inc. to the FERC -
previously filed.
D-4 Order of the FERC regarding WPL Application - previously filed.
D-5 Order of the FERC regarding South Beloit Application - previously filed.
D-6 Order of the FERC regarding Alliant Energy Corporate Services, Inc.
Application - previously filed.
D-7 Application of WPL to the Wisconsin Commission - previously filed.
D-8 Order of the Wisconsin Commission regarding the Transco.
D-9 Application of South Beloit to the Illinois Commission.
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D-10 Reserved.
D-11 Application of the Transco to the FERC - filed pursuant to Form SE.
D-12 Order of the FERC regarding Transco Application.
D-13 Omnibus Application of the Transco and Member Utilities to the Wisconsin
Commission ("Comprehensive Application") - previously filed.
D-14 Supplement to Omnibus Application - previously filed.
D-15 Application of the Transco and Member Utilities to the Wisconsin Commission
- previously filed.
D-16 Exhibits to the Comprehensive Application to the Wisconsin Commission by
the Transco and the Member Utilities - filed pursuant to Form SE.
D-17 Application to the Wisconsin Commission by the Member Utilities regarding
the Forming Party Agreement - filed pursuant to Form SE.
D-18 Application to the Wisconsin Commission by Alliant Energy regarding
Affiliated-Interest Agreements - filed pursuant to Form SE.
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D-19 Application to the Wisconsin Commission by South Beloit regarding
Affiliated-Interest Agreements - filed pursuant to Form SE.
D-20 Application to the Wisconsin Commission by the Member Utilities regarding
Documents Under FERC Jurisdiction - filed pursuant to Form SE.
D-21 Transco Section 205 Filing with the FERC dated December 15, 2000.
D-22 Transco Section 205 Filing with the FERC dated December 18, 2000.
D-23 Clarification order of the FERC.
D-24 Order of the FERC regarding WEPCO Application - Incorporated by reference
to WEC SEC File No. 70-9741.
D-25 Order of the FERC regarding ESE Application - Incorporated by reference to
WEC SEC File No. 70-9741.
D-26 Order of the FERC regarding WPS Application - Incorporated by reference to
WPS SEC File No. 70-9769.
D-27 Order of the FERC regarding MGE Application - Incorporated by reference to
MGE SEC File No. 70-9791.
E Interconnection Map - filed pursuant to Form SE.
F-1 Opinion of Barbara Swan, Esq.
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F-2 Opinion of Walter Woelfle, Esq..
G Not applicable.
H Form of Notice - previously filed.
B. FINANCIAL STATEMENTS.
--------------------
1.1 Balance Sheet of Alliant Energy and consolidated subsidiaries, as of June
30, 2000 (incorporated by reference to the Quarterly Report on Form 10-Q of
Alliant Energy for the quarter ended June 30, 2000) (File No. 1-9894) --
Previously filed.
1.2 Statement of Income of Alliant Energy and consolidated subsidiaries for the
period ended June 30, 2000(incorporated by reference to the Quarterly
Report on Form 10-Q of Alliant Energy for the quarter ended June 30, 2000)
(File No. 1-9894) -- Previously filed.
1.3 Balance Sheet of WPL, as of June 30, 2000 (incorporated by reference to the
Quarterly Report on Form 10-Q of WPL for the quarter ended June 30, 2000)
(File No. 0-337) - previously filed.
1.4 Statement of Income of WPL for the period ended June 30, 2000 (incorporated
by reference to the Quarterly Report on Form 10-Q of WPL for the quarter
ended June 30, 2000) (File No. 0-337) -- Previously filed.
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ITEM 7. INFORMATION AS TO ENVIRONMENTAL EFFECTS.
---------------------------------------
None of the matters that are the subject of this Application or Declaration
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 transaction that is the subject of this
Application or Declaration 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
Application or Declaration.
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SIGNATURES
Pursuant to the requirements of the Public Utility Holding Company Act of
1935, as amended, the undersigned companies have duly caused this amended
Application or Declaration filed herein to be signed on their behalf by the
undersigned thereunto duly authorized.
ALLIANT ENERGY CORPORATION
WISCONSIN POWER AND LIGHT COMPANY
SOUTH BELOIT WATER, GAS & ELECTRIC
COMPANY
By: /s/ Edward M. Gleason
------------------------------------
Name: Edward M. Gleason
Title: Vice President-Treasurer
and Corporate Secretary
AMERICAN TRANSMISSION COMPANY LLC
By: ATC Management Inc., Its Manager
By: /s/ Daniel A. Doyle
------------------------------------
Name: Daniel A. Doyle
Title: Vice President, Chief
Financial Officer and Treasurer
ATC MANAGEMENT INC.
By: /s/ Daniel A. Doyle
------------------------------------
Name: Daniel A. Doyle
Title: Vice President, Chief
Financial Officer and Treasurer
Date: December 28, 2000
68
