(As filed June 13, 2000)
File No. 70-____
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM U-1
APPLICATION OR DECLARATION
UNDER THE
PUBLIC UTILITY HOLDING COMPANY ACT OF 1935
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Alliant Energy Corporation
Wisconsin Power & Light Company
222 West Washington Avenue
Madison, Wisconsin 53703
(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 53703-0192
(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 53703-0192 New York, New York 10019
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ITEM 1. DESCRIPTION OF PROPOSED TRANSACTION.
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A. Alliant Energy Corporation ("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 Wisconsin Power & Light
Company ("WPL"), South Beloit Water, Gas and Electric Company, Interstate Power
Company, and IES Utilities Inc. (collectively, the "Operating Companies"). WPL
is engaged principally in the generation, purchase, distribution and sale of
electric power in 35 counties in a 16,000 square-mile area in southern and
central Wisconsin. WPL provides retail electric service to approximately 401,000
customers in 615 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, and one privately owned utility.
B. In 1999, the state of Wisconsin enacted legislation that
facilitates the formation of a transmission company, American Transmission
Company, LLC, a limited liability company to be organized under Wisconsin law
(the "Transco"), which will be a single-purpose transmission company.2 The
Transco Legislation, among other things, encourages public utility affiliates of
Wisconsin holding companies, including WPL, to transfer ownership of their
transmission assets to the Transco by beneficially adjusting the calculation of
an existing limit on the amount of unregulated investments these utilities and
their affiliates can make, after the transfer of their assets to the Transco.3
The Transco will be managed by ATC Management Co. (the "Manager"), a corporation
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1 See WPL Holdings, Inc., et al., Holding Co. Act Release No. 26856 (Apr. 14,
1998).
2 1999 Wisconsin Act 9, Sections 2335tr to 2335uh (Assembly Amendment to
Assembly Subcommittee Amendment 1 to 1999 Assembly Bill 133) (the "Transco
Legislation").
3 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 nonutility
affiliates in a holding company system may own to an amount equal to 25% of
the assets owned by all of the electric public 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 transfers all of its
transmission assets to the Transco before January 1, 2001 and transfers
operational control of all of its transmission facilities in Wisconsin and
the surrounding states to the Midwest independent system operator before
January 1, 2001.
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which will be formed under Wisconsin law. The Manager will also hold a portion
of the Transco's membership interests. All Transco participants will ultimately
own direct or indirect interests in the Transco and the Manager in proportion to
the value of the transmission assets each participant contributes to the
Transco.
C. It is expected that the participants in the Transco and the
Manager will include in addition to WPL, South Beloit Water, Gas and Electric
Company ("South Beloit") (a wholly-owned subsidiary of WPL with transmission
assets in Illinois), Wisconsin Energy Corporation ("WEC"), an exempt holding
company which owns Wisconsin Electric Power Co., Wisconsin Public Power, Inc.
("WPPI"), WPS Resources Corp., an exempt holding company which owns Wisconsin
Public Service Corporation, and Madison Gas & Electric Company. Other
transmission-owning utilities may, in the future, decide to become members of
the Transco.
D. WPL, the other participating Wisconsin utilities and South Beloit
intend to contribute their transmission assets to the Transco on or about
January 1, 2001 (the "Operations Date").4 WPL and South Beloit will seek
Commission authority to do so in a separate application, as discussed below. WPL
and/or Alliant Energy now seek authority only to: (i) acquire, for a nominal
consideration not to exceed $125,000, a membership interest in the Transco; and
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4 The Transco Legislation currently contemplates that the transfer of the
transmission assets will occur by January 1, 2001. It is not clear how a
failure to effect such transfer by January 1, 2001 would impact Alliant
Energy's position with respect to the asset cap calculation.
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(ii) acquire, for a nominal consideration not to exceed $125,000, a percentage
of the shares of the Manager. Depending on the number of initial members of the
Transco, it is expected that WPL's and/or Alliant Energy's interest in the
Transco and the Manager will be between 35% and 40% of each entity. The
Transco's other participants will make similar initial contributions. Alliant
Energy also seeks authority to guaranty the Transco's obligations and
indebtedness under a credit agreement, as described below.
E. WPL must make these initial contributions prior to the Operations
Date so that the Transco and the Manager may conduct start-up and other interim
operations (e.g., lease office space, establish benefits plans and negotiate
loans or other financing arrangements), which must occur before the Transco
accepts transfers of transmission assets from its participants. WPL, South
Beloit and Alliant Energy will seek Commission authority in a separate
application to transfer any transmission assets, to engage in any affiliated
transactions and to carry out other related jurisdictional activities; thus,
they are not now seeking any such authorization.
F. The Transco will enter into a credit agreement with Bank One, NA
(the "Credit Agreement"). Additional lenders may participate in the Credit
Agreement in the future through Bank One's syndication. The Credit Agreement
will permit borrowings by the Transco in an aggregate amount not to exceed $30
million. Promissory notes issued under the Credit Agreement (the "Notes") will
bear interest at either (1) a rate which will be equal to the sum of (a) the
quotient of (i) the London Interbank Offered Rate in effect at the time, divided
by (ii) one minus the reserve requirement imposed under Regulation D of the
Board of Governors of the Federal Reserve System on Eurocurrency liabilities,
plus (b) 0.30% per annum; (2) the Alternate Base Rate; or (3) at a higher rate
after default. The Alternate Base Rate is defined as the rate of interest per
annum equal to the higher of (1) the Bank One corporate base rate and (2) the
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sum of the Federal Funds effective rate plus 0.5% per annum. The Credit
Agreement will have an initial term of 364 days and will provide for automatic
renewal for successive 364-day periods with the consent of the Transco and the
lenders under the Credit Agreement.
G. Issuance of the Notes will be subject to certain conditions, and
the Notes will be subject to acceleration under certain circumstances, which
conditions and circumstances are customary for agreements similar to the Credit
Agreement.
H. The Transco will pay the lenders under the Credit Agreement a
facility fee at a per annum rate equal to the 0.09% per annum on the average
daily aggregate commitment under the Credit Agreement, payable on each payment
date and at the termination of the Credit Agreement. The Transco will make
payments under the Credit Agreement quarterly.
I. The Credit Agreement will include a letter of credit ("L/C")
facility. Pursuant to this facility, the Transco will be able to request that
Bank One issue an L/C, in a maximum aggregate face amount for all L/Cs
outstanding of up to $12.5 million. The aggregate amount that the Transco may
borrow under the Credit Agreement will be reduced by the face amount of all
outstanding L/Cs. Drawings on an L/C would initially bear interest at the
Alternate Base Rate. The Transco will be required to pay the issuing bank
certain letter of credit fees.
J. The Transco will use the advances under the Credit Agreement to
fund its activities during its developmental stages. Expenses in connection with
such activities would include accounting fees, legal fees, office space rental,
salaries and other start-up expenses. Funds advanced in connection with the
Credit Agreement will not, however, be used to acquire utility assets of any
kind.
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K. To induce the lenders to enter into the Credit Agreement, Alliant
Energy proposes to deliver to the lenders a guaranty agreement, pursuant to
which Alliant Energy will guaranty payment of all of the principal, interest and
other fees of the Transco under the Credit Agreement. The principal amount of
advances made under the Credit Agreement will not exceed $30 million. The
Guaranty Agreement is meant to be temporary and to operate only until the
Transco is able to establish its credit standing as an independent entity and
thus the Guaranty Agreement will terminate when the Transco receives an "A-" (or
higher) credit rating from Standard & Poors Corporation and an "A3" (or higher)
credit rating from Moody's Investors Service, Inc. Additionally, in the
Reimbursement Agreement, which is discussed below, the Transco will agree to
obtain the release of Alliant Energy from its obligations under the Guaranty
Agreement 60 days after transmission assets are transferred to the Transco.
L. In addition to the Guaranty Agreement, Alliant Energy will enter
into a reimbursement agreement (the "Reimbursement Agreement") with the Transco,
pursuant to which the Transco will reimburse Alliant Energy for all amounts it
pays in respect of the Guaranty Agreement. Alliant Energy will also enter into
an indemnification and reimbursement agreement (the "Indemnification Agreement")
with WEC. Pursuant to the terms of the Indemnification Agreement, WEC will
reimburse Alliant Energy for one-half of any payments Alliant Energy must make
in respect of the Guaranty Agreement to the extent the Transco does not
reimburse Alliant Energy for such payments in accordance with the Reimbursement
Agreement. It is contemplated that all other participants in the Transco, other
than WPPI, will ultimately enter into one or more indemnification and
reimbursement agreements with Alliant Energy under which each participant will
agree to reimburse Alliant Energy for its Guaranty Agreement payments in
proportion to each participant's ownership interest in the Transco.
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ITEM 2. FEES, COMMISSIONS AND EXPENSES.
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The fees, commissions and expenses incurred or to be incurred in
connection with the transactions proposed herein will be filed by amendment.
ITEM 3. APPLICABLE STATUTORY PROVISIONS.
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Sections 6(a), 7, 9(a), 10 and 12(b) of the Act and Rules 45 and 54
thereunder apply to the proposed transactions.
Rule 54 Analysis. The transactions proposed herein are also subject to
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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 March 31, 2000 was $199 million, or about 17% of Alliant
Energy's "consolidated retained earnings" ($1,143 million for the four quarters
ended March 31, 2000 as defined in Rule 53(a)(1)(ii) and including 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
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the Act to retail regulatory commissions. Finally, none of the circumstances
described in Rule 53(b) has occurred or is continuing. Rule 53(c) is by its
terms inapplicable, as the proposed transaction does not involve the issuance of
securities to finance an investment in any EWG.
ITEM 4. REGULATORY APPROVALS.
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No state commission and, other than this Commission, no federal
commission has jurisdiction over the proposed transactions that are the subject
of this application. The Public Service Commission of Wisconsin and the Federal
Energy Regulatory Commission will, however have jurisdiction over WPL's transfer
of its transmission assets to the Transco. As stated herein, Commission
authority for such transfer will be sought under a separate application.
ITEM 5. PROCEDURE.
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The Commission is requested to publish a notice under Rule 23 with
respect to the filing of this Application/Declaration as soon as practicable.
The applicants request that the Commission's Order be issued as soon as
practicable after the notice period and in any event not later than July 21 in
order to accommodate a closing to enable the Transco to commence its
developmental activities before August 1, 2000. 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.
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A. - EXHIBITS.
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A-1 Form of Certificate of Formation of Transco.*
A-2 Form of Limited Liability Company Agreement of
Transco.*
A-3 Form of Certificate of Incorporation of the Manager.*
A-4 Form of By-laws of the Manager.*
B-1 Form of Credit Agreement.*
B-2 Form of Guaranty.*
B-3 Form of Reimbursement Agreement.*
B-4 Form of Indemnification Agreement.*
C Not Applicable.
D Not Applicable.
E Not Applicable.
F Opinion of Barbara Swan, Esq.*
G Not Applicable.
H Form of Notice.
* To be filed by amendment.
B. FINANCIAL STATEMENTS.
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1.1 Balance Sheet of Alliant Energy and consolidated
subsidiaries, as of March 31, 2000 (incorporated by
reference to the Quarterly Report on Form 10-Q of
Alliant Energy for the quarter ended March 31, 2000)
(File No. 1-9894).
1.2 Statement of Income of Alliant Energy and consolidated
subsidiaries for the period ended March 31, 2000
(incorporated by reference to the Quarterly Report on
Form 10-Q of Alliant Energy for the quarter ended March
31, 2000) (File No. 1-9894).
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1.3 Balance Sheet of WPL, as of March 31, 2000
(incorporated by reference to the Quarterly Report on
Form 10-Q of WPL for the quarter ended March 31, 2000)
(File No. 0-337).
1.4 Statement of Income of WPL for the period ended March
31, 2000 (incorporated by reference to the Quarterly
Report on Form 10-Q of WPL for the quarter ended March
31, 2000) (File No. 0-337).
ITEM 7. INFORMATION AS TO ENVIRONMENTAL EFFECTS.
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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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SIGNATURE
Pursuant to the requirements of the Public Utility Holding Company Act
of 1935, as amended, the undersigned companies have duly caused this Application
or Declaration filed herein to be signed on their behalf by the undersigned
thereunto duly authorized.
ALLIANT ENERGY CORPORATION
By: \s\ Edward M. Gleason
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Name: Edward M. Gleason
Title: Vice President-Treasurer
and Corporate Secretary
WISCONSIN POWER & LIGHT COMPANY
By: \s\ Edward M. Gleason
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Name: Edward M. Gleason
Title: Vice President-Treasurer
and Corporate Secretary
Date: June 13, 2000
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