EXHIBIT D-11
COMMONWEALTH OF VIRGINIA
STATE CORPORATION COMMISSION
PETITION OF )
)
CAROLINA POWER & LIGHT COMPANY, )
INTERPATH COMMUNICATIONS, INC. )
AND )
CP&L ENERGY, INC. ) CASE NO. PUA00___
)
FOR AUTHORITY PURSUANT TO THE )
UTILITY TRANSFERS ACT, VA. CODE )
SS.SS.56-88 ET SEQ. )
JOINT PETITION
Carolina Power & Light Company ("CP&L"), its wholly-owned subsidiary
Interpath Communications, Inc. ("Interpath"), and CP&L Energy, Inc., formerly
named CP&L Holdings, Inc. ("CP&L Energy"), Petitioners, file this Joint Petition
under Chapter 5 of Title 56 of the Virginia Code (ss. 56-88 et seq.). The
Petitioners seek Virginia State Corporation Commission ("SCC" or "Commission")
approval for the indirect transfer of Interpath stock in connection with the
reorganization of CP&L's corporate structure through the formation of a holding
company, CP&L Energy. In support of their Joint Petition, Petitioners
respectfully state the following:
1. Interpath is a public service company dually incorporated under the
laws of the Commonwealth of Virginia and the State of North Carolina and is a
wholly-owned subsidiary of CP&L. It holds Certificates of Public Convenience and
Necessity to furnish inter-exchange and intrastate local exchange
telecommunications services throughout North Carolina and the Commonwealth of
Virginia. Importantly, at the current time, Interpath has no Virginia customers
and no Virginia revenues. A copy of the 1998 audited Financial Statements of
Interpath is attached to this Application as Exhibit A.
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2. CP&L is a North Carolina public service company engaged in the
provision of wholesale and retail electric service in North and South Carolina.
A copy of the 1999 audited financial statements of CP&L is attached to this
Petition as Exhibit B.
3. CP&L Energy is currently a wholly-owned subsidiary of CP&L.
4. CP&L intends to reorganize its corporate structure through the
formation of a holding company. To implement this reorganization, current
holders of CP&L common stock will exchange their shares for a like number of
shares of CP&L Energy common stock, and CP&L Energy will become the sole owner
of the CP&L common stock. As a result of the exchange, CP&L will become a
wholly-owned subsidiary of CP&L Energy. Interpath will remain a wholly-owned
subsidiary of CP&L. Therefore, the resulting control of Interpath will remain
the same as under the current corporate structure and the management and
operation of Interpath will not change as a result of this holding company
reorganization. A copy of the proxy statement and prospectus sent to CP&L's
shareholders is attached as Exhibit C to this Petition.
5. The Petitioners believe that the proposed reorganization will not
result in a change of "control" as contemplated by the Utility Transfers Act,
Chapter 6 of Title 56 of the Virginia Code, and thus that no Commission approval
is required. Accordingly, rather than requesting Commission approval, the
Petitioners filed an informational letter with the Commission's Staff on
November 22, 1999, providing notice of the proposed reorganization. The Staff,
however, interprets the Act differently and accordingly, the Petitioners agreed
to file this Joint Petition.
6. The proposed corporate reorganization will not impair the continued
provision of adequate service to the public by Interpath. Interpath will
continue to provide network services and capacity to other carriers and
end-users in Virginia at just and reasonable rates and will continue to abide by
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its tariffs on file with the Commission after the proposed transaction. Although
Interpath will become an indirect subsidiary of CP&L Energy, and thus its
ultimate parent company will change, its ultimate parent's shareholders will
remain the same before and after the transfer as will its officers and
directors.
7. Attached as Exhibit D to this Petition is a Transaction Summary
conforming to the requirements of the Guidelines promulgated by the Commission's
Division of Public Utility Accounting on October 21, 1994. The responses
included in the Transaction Summary further detail the proposed stock transfer
contemplated by the Agreement.
WHEREFORE, CP&L, Interpath and CP&L Energy respectfully request that
the Commission (1) find that the indirect transfer of Interpath's stock through
the above described transaction by CP&L to its newly established holding company
structure will not impair or jeopardize the continued provision of adequate
service to the public at just and reasonable rates, (2) expeditiously approve
the transaction described in this Petition pursuant to the Utility Transfers
Act, Va. Code ss. 56-88 through ss. 56-92; and specifically pursuant to the
provisions and time limits set forth in ss. 56-88.1.
Respectfully submitted,
CAROLINA POWER & LIGHT COMPANY
Dated: May 2, 2000 By: /s/ William D. Johnson
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Name: William D. Johnson
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Title: Sr. Vice President
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INTERPATH COMMUNICATIONS, INC.
Dated: May 3, 2000 By: /s/ Michael K. Fox
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Name: Michael K. Fox
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Title: Interim President and CEO
---------------------------------
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CP&L ENERGY, INC.
Dated: May 3, 2000 By: /s/ Robert B. McGehee
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Name: Robert B. McGehee
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Title: Exec. Vice President, General
---------------------------------
Counsel and Chief Administrative
---------------------------------
Officer
--------
Richard D. Gary
Michelle K. Walsh
Hunton & Williams
Riverfront Plaza, East Tower
951 East Byrd Street
Richmond, Virginia 23219-4047
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VERIFICATION
------------
Being first duly sworn, the undersigned, William D. Johnson, deposes
and states that he is Senior Vice President and Corporate Secretary of Carolina
Power & Light Company, that he has read the foregoing Joint Petition and
attachments thereto and knows the contents thereof, that the same are truly
stated, and that he has executed the Joint Petition on behalf of Carolina Power
& Light Company with full power and authority to do so.
/s/ William D. Johnson
----------------------
STATE OF NORTH CAROLINA
CITY/COUNTY OF WAKE
Subscribed to and sworn before me, a Notary Public, in and for the
jurisdiction aforesaid, this 2nd day of May, 2000. My commission expires July 7,
2003.
/s/ Carol P. Williams
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Notary Public
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VERIFICATION
------------
Being first duly sworn, the undersigned, Robert McWilliams, deposes
and states that s/he is the Assistant Secretary of Carolina Power & Light
Company, that s/he has read the foregoing Joint Petition and attachments thereto
and knows the contents thereof, that the same are truly stated, and that s/he
has executed the Joint Petition on behalf of Carolina Power & Light Company with
full power and authority to do so.
/s/ Robert McWilliams
---------------------
STATE OF NORTH CAROLINA
CITY/COUNTY OF JOHNSTON
Subscribed to and sworn before me, a Notary Public, in and for the
jurisdiction aforesaid, this 3rd day of May, 2000. My commission expires May 12,
2004.
/s/ Charlene F. Hunt
--------------------
Notary Public
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VERIFICATION
------------
Being first duly sworn, the undersigned, Michael K. Fox, deposes and
states that he is Interim President & CEO of Interpath Communications, Inc.,
that he has read the foregoing Joint Petition and attachments thereto and knows
the contents thereof, that the same are truly stated, and that he has executed
the Joint Petition on behalf Interpath Communications, Inc. with full power and
authority to do so.
/s/ Michael Klop
----------------
STATE OF NORTH CAROLINA
CITY/COUNTY OF MORRSIVILLE/WAKE
Subscribed to and sworn before me, a Notary Public, in and for the
jurisdiction aforesaid, this 3rd day of May, 2000. My commission expires April
9, 2001.
/s/ Sue Creech Clark
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Notary Public
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VERIFICATION
------------
Being first duly sworn, the undersigned, William D. Johnson, deposes
and states that he is the Secretary of Interpath Communications, Inc., that he
has read the foregoing Joint Petition and attachments thereto and knows the
contents thereof, that the same are truly stated, and that he has executed the
Joint Petition on behalf Interpath Communications, Inc. with full power and
authority to do so.
/s/ William D. Johnson
----------------------
STATE OF NORTH CAROLINA
CITY/COUNTY OF WAKE
Subscribed to and sworn before me, a Notary Public, in and for the
jurisdiction aforesaid, this 2nd day of May, 2000. My commission expires July 7,
2003.
/s/ Carol P. Williams
---------------------
Notary Public
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VERIFICATION
------------
Being first duly sworn, the undersigned, Robert B. McGehee, deposes
and states that he is Executive Vice President of CP&L Energy, Inc., that he has
read the foregoing Joint Petition and attachments thereto and knows the contents
thereof, that the same are truly stated, and that he has executed the Joint
Petition on behalf of CP&L Energy, Inc. with full power and authority to do so.
/s/ Robert B. McGehee
---------------------
STATE OF NORTH CAROLINA
CITY/COUNTY OF CHATHAM
Subscribed to and sworn before me, a Notary Public, in and for the
jurisdiction aforesaid, this 3rd day of May, 2000. My commission expires June
23, 2003.
/s/ Janet O. Johnson
--------------------
Notary Public
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VERIFICATION
------------
Being first duly sworn, the undersigned, William D. Johnson, deposes
and states that he is the Secretary of CP&L Energy, Inc., that he has read the
foregoing Joint Petition and attachments thereto and knows the contents thereof,
that the same are truly stated, and that he has executed the Joint Petition on
behalf of CP&L Energy, Inc. with full power and authority to do so.
/s/ William D. Johnson
----------------------
STATE OF NORTH CAROLINA
CITY/COUNTY OF WAKE
Subscribed to and sworn before me, a Notary Public, in and for the
jurisdiction aforesaid, this 2nd day of May, 2000. My commission expires July 7,
2003.
/s/ Carol P. Williams
---------------------
Notary Public
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TRANSACTION SUMMARY
1) PROVIDE A COPY OF THE AGREEMENT SIGNED BY THE PRESIDENT OR ANY VICE
PRESIDENT AND THE SECRETARY OR ANY ASSISTANCE SECRETARY OF THE
COMPANY.
Attached as Exhibit 1 to this Transaction Summary is a copy of the Proxy
Statement containing the CP&L Energy (formerly CP&L Holdings, Inc.)/CP&L
exchange agreement.
2) PROVIDE A CLEAR SUMMARIZATION OF THE ASSET(S) IN QUESTION.
As explained in paragraph 4 of the Joint Petition, CP&L intends to reorganize
its corporate structure through the formation of a holding company, CP&L Energy,
Inc. To implement this reorganization, current holders of CP&L common stock will
exchange their shares for a like number of shares of CP&L Energy common stock,
and CP&L Energy will become the owner of the CP&L common stock. As a result of
the exchange, CP&L will become a wholly-owned subsidiary of CP&L Energy.
Interpath will remain a wholly-owned subsidiary of CP&L.
3) DESCRIBE THE PROPOSED PROCEDURE AND THE TERMS AND CONDITIONS OF THE
TRANSACTION TO INCLUDE:
(A) HISTORICAL AND CURRENT USE OF PROPERTY;
(B) PROPOSED USE OF PROPERTY;
(C) ORIGINAL COST OF PROPERTY;
(D) PROPOSED SALES PRICE OF PROPERTY AND METHOD OF DETERMINING THE
PRICE; AND
(E) PROPOSED ACCOUNTING TREATMENT OF THE TRANSACTION AS WELL AS
CURRENT RECORDING ON COMPANY'S BOOKS OF RECORD.
As explained in response to Question 2 and in the parties' Joint Application, as
a result of the proposed reorganization, Interpath will become an indirect
subsidiary of CP&L Energy, Inc., but will remain a wholly-owned subsidiary of
CP&L. The specific terms and conditions of the proposed transaction are included
in the proxy statement and prospectus sent to CP&L's shareholders, attached as
Exhibit C to the Joint Petition.
(a) Interpath Communications, Inc. is a public service company dually
incorporated under the laws of Virginia and North Carolina and is certificated
to furnish interexchange and local exchange telecommunications services to
customers residing in Virginia.
(b) After the proposed stock transfer, Interpath will continue to
offer or provide telecommunications services to other carriers and end-users
throughout Virginia.
(c) Not Applicable.
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(d) To implement the holding company structure, current holders of
CP&L common stock will exchange their shares for a like number of shares of CP&L
Energy common stock, and CP&L Energy will become the owner of the CP&L common
stock.
(e) N/A
4) PROVIDE ASSURANCES THAT ADEQUATE SERVICE TO THE PUBLIC AT JUST AND
REASONABLE RATES WILL NOT BE IMPAIRED OR JEOPARDIZED BY THE PROPOSED
TRANSFER.
As explained in paragraph 6 of the Joint Petition, the proposed reorganization
will not impair Interpath's provision of adequate service to the public at just
and reasonable rates. Although Interpath will become an indirect subsidiary of
CP&L Energy, it will remain a wholly-owned subsidiary of CP&L and the resulting
control of Interpath will remain the same as under the current corporate
structure. Accordingly, the management and operation of Interpath will not
change. Moreover, Interpath will continue to abide by those tariffs on file with
the Commission.
5) SHOW THAT THE SALES PRICE WAS ARMS-LENGTH AND THAT THE PURCHASE WILL
RESULT IN A DIRECT BENEFIT TO CUSTOMERS.
The specific terms and conditions of the proposed transaction and related impact
on customers are included in the proxy statement and prospectus sent to CP&L's
shareholders and attached to the Joint Petition as Exhibit C. CP&L shareholders
approved the transaction on October 20, 1999. The share exchange will occur
after receipt of regulatory approvals.
6) PROVIDE SCHEDULE OF PLANT, BOOK DEPRECIATION, AND CONTRIBUTED PROPERTY
RELATED TO ASSETS TO BE ACQUIRED UP TO CURRENT DATE (OR DATE OF
PURCHASE, IF ACQUISITION HAS TAKEN PLACE).
Not Applicable.
7) PROVIDE COMPLETE FINANCIAL STATEMENTS, TO INCLUDE BALANCE SHEET,
INCOME STATEMENT, AND CASH FLOW STATEMENT, FOR THE LATEST TWELVE-MONTH
PERIOD AND FOR THE LAST FIVE YEARS.
See Exhibits A and B to the Joint Petition for the financial statements of CP&L
and Interpath for the year ending December 31, 1998 (for Interpath) and December
31, 1999 (for CP&L). In addition, attached as Exhibit 1 to this Transaction
Summary are CP&L's financial statements for the last five fiscal years. There
are no financial statements for CP&L Energy and none for Interpath that pre-date
1998.
8) ARE INVOICES AVAILABLE TO VERIFY PLANT FIGURES? IF NOT, WHY NOT?
Not Applicable.
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9) IN ADDITION TO THE ITEMS DESCRIBED ABOVE, FOR APPLICATIONS REQUESTING
APPROVAL OF THE ACQUISITION/DISPOSITION OF CONTROL, ADDRESS THE
ANTICIPATED IMPACT OF SUCH ACTION ON THE REGULATED COMPANY'S RATES AND
SERVICE, CAPITAL STRUCTURE, AND ACCESS TO CAPITAL AND FINANCIAL
MARKETS. DISCUSS FAVORABLE AND UNFAVORABLE ECONOMIC IMPACTS ON THE
STATE OF VIRGINIA TO INCLUDE EMPLOYEE LEVELS, FACILITIES, AND SERVICES
PROVIDED. WILL AN ADDITIONAL INVESTMENT BE REQUIRED TO IMPROVE SERVICE
QUALITY? PROVIDE SPECIFIC DETAILS ON IMPROVEMENTS NEEDED. PROVIDE THE
ANTICIPATED IMPACT ON RATES OF SUCH IMPROVEMENTS CURRENTLY AND FOR THE
NEXT TEN YEARS.
As explained in paragraph 6 of the Joint Petition, the proposed transaction will
not impair or jeopardize adequate service to the public at just and reasonable
rates. Interpath will continue to provide service in accordance with the rates,
terms and conditions included in tariffs on file with the Commission. The
proposed transaction will not have an unfavorable economic impact on the
Commonwealth of Virginia nor will any additional investment be required to
improve service quality.
