File No. 70-7320
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
POST-EFFECTIVE AMENDMENT NO. 1 TO
FORM U-1
APPLICATION/DECLARATION WITH RESPECT TO
CREDIT FACILITY SUBSTITUTION
under
THE PUBLIC UTILITY HOLDING COMPANY ACT OF 1935
THE CONNECTICUT LIGHT AND POWER COMPANY
SELDEN STREET
BERLIN, CONNECTICUT 06037
Name of companies filing this statement and address of
principal executive office)
NORTHEAST UTILITIES
(Name of top registered holding company parent of declarant)
Robert P. Wax, Esq.
Vice President, Secretary and General Counsel
Northeast Utilities Service Company
P.O. Box 270
Hartford, CT 06141-0270
(Name and address of agent for service)
The Commission is requested to mail signed copies of all orders, notices, and
communications to
David R. McHale Jane P. Seidl, Esq.
Manager-Project and Short-Term Finance Senior Counsel
Northeast Utilities Northeast Utilities
Service Company Service Company
P.O. Box 270 P.O. Box 270
Hartford, CT 06141-0270 Hartford, CT 06141-0270
The Application/Declaration in this proceeding, as previously amended,
is hereby further amended as follows:
1. The purpose of this amendment is to seek authority for The Connecticut
Light and Power Company ("CL&P"), a subsidiary of Northeast Utilities, to
replace the Letter of Credit provided by The Long-Term Credit Bank of Japan,
Limited, New York Branch ("Bank"), as permitted by Section 3.13 of the
Financing Agreement, by delivery of a substitute credit facility, consisting
of a Letter of Credit, and related agreements, to be provided by a substitute
bank to be chosen by CL&P ("Substitute Bank"). As stated in the
Application/Declaration, delivery of the original Letter of Credit to the
Trustee obtained for the Bonds a rating equivalent to the credit rating of
the Bank. After the Bonds were issued, the Bank's rating in the financial
markets deteriorated. In addition, CL&P has been advised by remarketing
agents for the Bonds that (i) many institutional investors that otherwise
would be interested in purchasing the Bonds will not purchase securities
secured by letters of credit issued by the Bank; and (ii) those investors
that are still willing to purchase the Bonds are demanding an interest rate
premium that is causing CL&P's effective interest cost to be higher than it
would have otherwise been using a bank with a better rating. Accordingly,
CL&P seeks authority to replace the Letter of Credit with a new letter of
credit ("Substitute LOC") to be issued by the Substitute Bank. The
Substitute LOC would be issued under a new Letter of Credit and Reimbursement
Agreement ("New LOC Agreement") substantially identical to the Letter of
Credit and Reimbursement Agreement dated as of September 1, 1993 among CL&P,
Deutsche Bank AG, New York Branch, Issuing Bank and Agent, and various co-
agents and participating banks approved in File No. 70-8088, Holding Co. Act
Rel. No. 35-25881, September 15, 1993.
Furthermore, CL&P seeks authority to obtain from time to time new
letters of credit from the same or different banks and further extensions and
modifications of and replacements for the New LOC Agreement with such banks
from time to time during the term of the Bonds supported thereby, in
accordance with the provisions of the Financing Agreement and subject to
certain limitations as set forth more fully below.
2. Accordingly, it is proposed that the following new paragraph be added at
the end of Part I of the Application/Declaration (capitalized terms used
herein being used as defined above and in the Application/Declaration):
"CL&P seeks authority to obtain extensions and modifications of and
replacements for The Long-Term Credit Bank of Japan, Limited (Bank)
Letter of Credit and the Bank Reimbursement Agreement (and any previous
extensions and modifications thereof and replacements therefor) from
time to time during the term of the Bonds supported thereby, provided
that (A) the total amount available to be drawn under any such extended,
modified, or replacement letter of credit does not exceed $16,200,000,
(B) the annual letter of credit costs applicable to any such extension,
modification, or replacement do not exceed 1.00% per annum of the total
amount available to be drawn under the extended, modified or replacement
letter of credit, (C) the reimbursement agreement applicable to any such
extension, modification or replacement shall provide (or shall afford
CL&P the option to elect) that Tender Advances bear interest until paid
at a rate not to exceed the higher of (1) the prime rate plus 2.00% or
(2) the federal funds rate plus 2.00%, (D) such extension, modification,
or replacement is otherwise on terms that are substantially similar in
all material respects to those applicable to the Letter of Credit and
the Reimbursement Agreement (or previous extensions or modifications
thereof or replacements therefor) proposed to be entered into in
connection with the replacement of the Bank, the form of which is
attached hereto as Exhibit B.5.1., and the Pledge Agreement, between
CL&P and the bank to be named (Exhibit B to Exhibit B.5.1), and (E) CL&P
shall have obtained all necessary State Commission approvals applicable
to such extension, modification or replacement."
3. The following paragraph is substituted in lieu of Part V:
"CL&P respectfully requests, pursuant to Rule 23 (c) of the Commission's
Rules and Regulations under the Act, that the Commission permit this
post-effective amendment to become effective on or before July 15, 1994
or as soon thereafter as practicable. CL&P hereby waives any
recommended decision by a hearing officer or by any other responsible
officer of the Commission and waives the 30-day waiting period between
the issuance of the Commission's Order and the date on which it is to
become effective, since it is desired that the Commission's Order, when
issued, become effective forthwith. CL&P consents that the Office of
Public Utility Regulation within the Division of Investment Management
may assist in the preparation of the Commission's decision and/or Order
unless the Office opposes the transactions covered by this post-
effective amendment."
4. The following paragraph is added as a new Part VIII:
"Other than the interest recently acquired in the Encoe Partners
partnership, which has been qualified as a foreign utility company
("FUCO"), neither CL&P nor any affiliate thereof (1) has acquired an
ownership interest in a exempt wholesale generator ("EWG") or a FUCO as
defined in Sections 32 and 33 of the Act; (2) will use the proceeds of
the proposed transactions to invest in an EWG or FUCO; or (3) now is or,
as a consequence of the transactions proposed herein, will have any
right under a service, sales or construction agreement with an EWG or a
FUCO, except in accordance with the provisions of the Act."
5. The estimated fees and expenses paid or incurred, directly or
indirectly, in connection with the proposed transaction are as follows:
Form U-1 Amendment Filing Fee.......$ 2,000
Northeast Utilities Service Company. 15,000
Legal Fees.......................... 25,000
Printing Expenses................... 2,000
Miscellaneous....................... 6,000
Total..................$50,000
6. The following exhibits are filed herewith:
B.5.1 Proposed Form of Reimbursement Agreement, including proposed
forms of the Letter of Credit and Pledge Agreement (to be
filed by amendment).
D.6.1 Application to Connecticut Department of Public Utility
Control ("DPUC") (to be filed by amendment).
D.6.2 DPUC Order (to be filed by amendment).
F.1.1 Opinion of Counsel (to be filed by amendment).
J.1 Proposed Form of Notice under the Public Utility Holding
Company Act of 1935.
7. No financial statements are filed herewith, as the proposed
transactions are not considered material to the financial
position of CL&P.
SIGNATURES
Pursuant to the requirements of the Public Utility Holding Company Act
of 1935, as amended, the undersigned applicant has duly caused this Post-
Effective Amendment No. 1 to be signed on its behalf by the undersigned
thereunto duly authorized.
Dated: May 26, 1994
THE CONNECTICUT LIGHT AND POWER COMPANY
By /s/Jane P. Seidl
Jane P. Seidl, Esq.
Senior Counsel
Northeast Utilities Service Company
Its Attorney
EXHIBIT J.1
SECURITIES AND EXCHANGE COMMISSION
(Release No. 35- )
Filings Under the Public Utility Holding Company Act of 1935 ("Act")
________________, 1994
The Connecticut Light and Power Company (70-7320)
The Connecticut Light and Power Company ("CL&P"), Selden Street, Berlin,
Connecticut 06037, an electric utility company subsidiary of Northeast
Utilities ("Northeast"), a registered holding company, has filed a post-
effective amendment to its Application/Declaration (File No. 70-7320) under
Sections 6(a) and 7 of the Act and Rule 50(a) (5) thereunder.
In 1986, pursuant to Commission order dated December 16, 1986 (HCAR No.
35-24263), the Business Finance Authority of the State of New Hampshire
(formerly, The Industrial Development Authority of the State of New
Hampshire) issued a series of pollution control revenue bonds ("Bonds") for
financing CL&P's share of the cost of constructing certain pollution control,
sewage, and solid waste disposal facilities at the Seabrook Nuclear Electric
Generating Station, Unit No. 1.
In order to improve the credit ratings of, and to support, the Bonds,
CL&P obtained a letter of credit from The Long-Term Credit Bank of Japan,
Limited ("LTCBJ"). Since the issuance of the Bonds, LTCBJ's rating in the
financial markets has deteriorated. In addition, CL&P states that it has
been advised by remarketing agents that: (i) many institutional investors
that otherwise would be interested in purchasing the Bonds will not purchase
securities secured by letters of credit issued by
LTCBJ; and (ii) those investors that are still willing to purchase the Bonds
are demanding an interest rate premium that is causing CL&P's effective
interest cost to be higher than it would otherwise be.
CL&P now proposes to replace the LTCBJ letter of credit for the Bonds
with a substitute letter of credit to be issued by a substitute bank
("Bank"). The substitute letter of credit would be issued in the amount of
$16,200,000, representing principal in the amount of $15,400,000 and interest
in the amount of $800,000, calculated at the maximum rate of 15% for 123
days. The substitute credit facility would be issued pursuant to a new
letter of credit, reimbursement agreement and related documents between the
Bank and CL&P. Tender advances will bear interest at a rate not to exceed
the higher of (i) the prime rate plus 2.00, or (ii) the federal funds rate
plus 2.00%. Annual letter of credit costs under the substitute facility will
not exceed 1.00% per annum. The proposed credit facility substitution is
expected to be carried out on or about July 25, 1994.
CL&P also seeks authority to obtain further extensions and modifications
of and replacements for the letter of credit and reimbursement agreement from
time to time during the term of the bonds supported thereby.
For the Commission, by the Division of Investment Management, pursuant to
delegated authority.
Jonathan G. Katz
Secretary
