UNOFFICIAL COPY
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COMMONWEALTH OF VIRGINIA
STATE CORPORATION COMMISSION
AT RICHMOND, OCTOBER 23, 2000
APPLICATION OF
WASHINGTON GAS LIGHT COMPANY CASE NO. PUF000026
For authority to engage
in affiliate transactions
through a Money Pool
ORDER GRANTING AUTHORITY
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On September 1, 2000, Washington Gas Light Company ("WGL" or "Applicant")
filed an application pursuant to Chapter 4 of Title 56 of the Code of Virginia
for authority to participate in a holding company system money pool ("Money
Pool"). Applicant amended its application on September 18, 2000, to modify the
cost allocation terms of the Money Pool Agreement.
Applicant represents that Chapter 3 authority is neither requested nor
necessary since its short-term borrowings under the proposed Money Pool will not
exceed the statutory threshold of twelve percent of total capitalization under
Virginia Code ss. 56-65.1. Applicant states that it will file separately for
such authority if and when it is needed.
The system Money Pool described in WGL's application is intended to be
created following the formation of the holding company structure authorized by
Commission Order dated May 11, 2000, in Case No. PUA000010. The new holding
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company will be named WGL Holdings, Inc. ("WGL Holdings"), and will become the
parent company of WGL.
Participants in the Money Pool will be WGL Holdings, WGL, and the
affiliates of WGL named in the Money Pool Agreement attached to the application.
The purpose of the money pool is to provide Participants with a means to borrow
and to lend surplus funds to each other on a short-term basis. WGL Holdings may
lend funds to the Money Pool, but it may not borrow from the Money Pool pursuant
to the restrictions imposed by the Public Utility Holding Company Act of 1935.
WGL Holdings will be administrator of the Money Pool.
Funds for the money pool will be provided from surplus funds invested by
the Participants ("Internal Funds") and proceeds from bank borrowings and/or
commercial paper sales by the Participants ("External Funds"). The Money Pool
borrowing rate will be based on a composite rate equal to the weighted average
of the cost of Internal and External funds. If Money Pool Funds are solely
comprised of Internal Funds, the applicable borrowing rate will be based on the
rate for high-grade, unsecured 30-day commercial paper as quoted in the Wall
Street Journal. The rate for External Funds will equal the weighted average of
the cost incurred by the Participant providing such funds.
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THE COMMISSION, upon consideration of the application and having been
advised by Staff, is of the opinion and finds that approval of the application
will not be detrimental to the public interest. Accordingly,
IT IS ORDERED THAT:
1) Applicant is authorized to enter into the WGL Holdings System Money Pool
Agreement for participation in the proposed Money Pool, under the terms and
conditions and for the purposes set forth in the application.
2) Applicant's borrowings under the Money Pool shall be limited to funds
that can be borrowed at rates equal to or lower than what WGL could obtain on
its own behalf outside of the Money Pool.
3) Prior to any changes in terms and conditions of the Money Pool
Agreement, Applicant shall file for amended authority to participate in the
Money Pool.
4) Applicant shall file for separate authority to have aggregate short-term
debt, both money pool and non-money pool borrowings, to exceed twelve percent of
total capitalization.
5) The approval granted herein for participation in the Money Pool shall
not preclude the Commission from exercising its authority under the provisions
of ss.ss. 56-78 through 56-80 of the Code of Virginia hereafter.
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6) The Commission reserves the right to examine the books and records of
any affiliate, whether or not such affiliate is regulated by this Commission, in
connection with the authority granted herein.
7) There being nothing further to consider in this matter, it shall be, and
hereby is, dismissed.
AN ATTESTED COPY hereof shall be sent to Applicant, to the attention of
Douglas V. Pope, Corporate Secretary and Attorney, 1100 H Street, N. W.,
Washington, D.C. 20080; and to the Division of Economics and Finance of the
Commission.
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