<PAGE>
FILE NO. 70-9549
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
AMENDMENT NO. 1
FORM U-1 APPLICATION - DECLARATION
UNDER SECTION 3(b) AND
RULE 10 OF THE PUBLIC UTILITY HOLDING COMPANY ACT OF 1935
--------------------------------------------
UTILICORP UNITED INC.
20 West Ninth Street
Kansas City, MO 64105
(Name of the company filing this application and
address of its principal executive office)
---------------------------------------------
Jon R. Empson
Senior Vice-President
UtiliCorp United Inc.
20 West Ninth Street
Kansas City, MO 64105
(Name and address of agent for service)
Please also submit copies of all correspondence to:
M. Douglas Dunn, Esq.
Milbank, Tweed, Hadley & McCloy LLP
One Chase Manhattan Plaza
New York, NY 10005
Leslie J. Parrette, Jr.
Blackwell Sanders Peper Martin L.L.P.
Two Pershing Square
2300 Main Street - Suite 1100
Kansas City, Missouri 64108
<PAGE>
ITEM 4. REGULATORY APPROVAL.
No regulatory approval other than that of the Commission under
Section 3(b) is required.
ITEM 6. EXHIBITS.
The following exhibits were originally physically filed with
respect to the foreign investments. They are converted here to be a part of
the electronic filings and are hereby filed as a part of this
application-declaration:
EXHIBIT 1 Form of Notice*
EXHIBIT 2 Opinion of counsel
EXHIBIT 3-1 Missouri Public Service Commission Letter
EXHIBIT 3-2 Iowa Utilities Board Letter
EXHIBIT 3-3 Order of Public Service Commission of West Virginia
EXHIBIT 3-4 State of Colorado, Public Utilities Commission Letter
EXHIBIT 3-5 Kansas Corporation Commission Letter
EXHIBIT 3-6 Order of Minnesota Public Utilities Commission
EXHIBIT 3-7 Order of Michigan Public Service Commission
EXHIBIT 3-8 South Dakota Public Utilities Commission Letter
* Previously filed
Dated: November 19, 1999
Respectfully submitted,
UTILICORP UNITED INC.
By: /s/ Jon R. Empson
---------------------
Jon R. Empson
Senior Vice-President
<PAGE>
EXHIBIT 2
File 70-9549
Milbank, Tweed, Hadley & McCloy LLP
1 Chase Manhattan Plaza
New York, NY 10005
November 19, 1999
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
Re: Form U-1 Application-Declaration
Ladies and Gentlemen:
We refer to the Form U-1 Application-Declaration (the
"Application-Declaration") filed by UtiliCorp United Inc. ("UtiliCorp"), a
Delaware corporation. Capitalized terms and parties not defined herein shall
have the meanings ascribed to such terms and parties in the
Application-Declaration.
In the Application-Declaration, UtiliCorp applies under Section 3(b) of
the Public Utility Holding Company Act of 1935, as amended (the "1935 Act"),
and Rule 10 thereunder for an order from the Securities and Exchange
Commission (the "SEC") to exempt UtiliCorp Asia Pacific Pty. Ltd. ("UAPL"),
an electric utility company organized under the laws of Australia and
operating solely in Australia. UAPL has an indirect equity ownership interest
in Ikon Energy Pty. Ltd., an Australian corporation, Multinet Partnership, an
Australian partnership, and United Energy Ltd., an Australian corporation,
each of which is exempt without qualification from the 1935 Act pursuant to
Section 3(b). All companies are organized under the laws of Australia and
operate solely in Australia. We have acted as counsel for UtiliCorp in
connection with this Application-Declaration and, as such counsel, we are
familiar with the corporate proceedings taken and to be taken by UtiliCorp
and its subsidiaries as described in the Application-Declaration.
We have examined originals, or copies certified to our satisfaction, of
such corporate records of UtiliCorp, certificates of public officials,
certificates of officers and representatives of UtiliCorp and other documents
as we have deemed it necessary to require as a basis for the opinions
hereinafter expressed. In our examination, we have assumed the genuineness of
all signatures, the authenticity of all documents submitted to us as
originals and the conformity with authentic original documents of all
documents submitted to us as copies. When relevant facts were not
independently established, we have relied upon statements of governmental
officials and upon representations made by officers of UtiliCorp and other
appropriate persons, and statements contained in the Application-Declaration
The opinions expressed below in respect of the transactions described in
the Application-Declaration (the "Transactions") are subject to the following
assumptions or conditions:
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a. The Transactions shall have been duly authorized and approved to
the extent required by federal and state law and by the Board of
Directors of UtiliCorp;
b. The SEC shall have duly entered an appropriate order or orders
granting the Application-Declaration and permitting the
Application-Declaration to become effective with respect to the
Transactions;
c. The Transactions shall have been accomplished in accordance with
all approvals, authorizations, consents, certificates and orders
of any applicable state commission or regulatory authority
required for the consummation of the Transactions, and all such
required approvals, authorizations, consents, certificates and
orders shall have been obtained and remain in effect; and
d. No act or event other than as described herein shall have
occurred subsequent to the date hereof which would change the
opinions expressed above.
Based upon the foregoing, and having regard to legal considerations
which we deem relevant, we are of the opinion that, in the event that the
Transactions are completed in accordance with the Application-Declaration,
and subject to the assumptions and conditions set forth above:
1. UtiliCorp will be validly organized and duly existing under the
laws of the State of Delaware; and
2. All state and federal laws applicable to the Transaction will
have been complied with.
3. UtiliCorp will legally, directly or indirectly, acquire any
securities that are part of the Transaction.
4. The consummation of the Transaction will not violate the legal
rights of the holders of any securities issued by UtiliCorp.
We hereby consent to the use of this opinion as an exhibit to the
Application-Declaration. The opinions set forth herein are issued and
expressed as of the date hereof. We do not assume or undertake any
responsibility to advise you of changes in either fact or law which may come
to our attention after the date hereof.
Very truly yours,
Milbank, Tweed, Hadley & McCloy LLP
MDD/RWM, Jr.
<PAGE>
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EXHIBIT 3-1
FILE NO. 70-9549
[SEAL OF THE STATE OF MISSOURI]
[LETTERHEAD OF MISSOURI PUBLIC SERVICE COMMISSION]
September 3, 1998
Securities and Exchange Commission
455th Street, NW.
Washington. D.C. 20549
Dear Commission Members:
The Public Service Commission of the State of Missouri has been advised
that UtiliCorp United Inc. ("UtiliCorp"), doing business in the State of
Missouri as public utility through its operating division Missouri Public
Service, has advised this Commission that UtiliCorp is considering acquiring,
indirectly through a subsidiary or subsidiaries, an ownership interest in one
or more natural gas businesses located in the State of Victoria, Australia.
This letter is submitted pursuant to the requirements of ss.3(b) of to Public
Utility Holding Company Act of 1935, as amended (the "Act").
The Missouri Public Service Commission has jurisdiction over the retail
electric and gas rates of Missouri Public Service which is a public utility
as such term is defined wider the Act. The Public Service Commission of the
State of Missouri hereby certifies that it has the authority and resources to
protect ratepayers subject to its jurisdiction with respect to UtiliCorp's
proposed investment in the Australian gas businesses, and that it intends to
exercise its authority.
This Commission notes that the certification may be revised or withdrawn
prospectively as to any future acquisition. In making this certification,
this Commission is relying on the belief that the Securities and Exchange
Commission will enforce all sections of the Act which govern
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UtiliCorp's proposed investment in the Australian gas properties over which
it has jurisdiction.
Sincerely,
/s/ Dale Hardy Roberts
Dale Hardy Roberts
Secretary/Chief Regulatory Law Judge
cc: Jon Empson James C. Swearengen
UtiliCorp United Inc. Brydon, Swearengen & England, P.C.
20 W. Ninth Street P.O. Box 456
Kansas City, MO 64105 Jefferson City, MO 65102
<PAGE>
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EXHIBIT 3-2
FILE NO. 70-9549
[LETTERHEAD OF IOWA UTILITIES BOARD]
June 15, 1998
Securities and Exchange
450 Fifth Street, N.W.
Washington DC 20549
Commission
Dear Commission Members:
The Iowa Utilities Board has been advised UtiliCorp United Inc. (UtiliCorp),
doing business in the State of Iowa as a public utility through its operating
division, Peoples Natural Gas, either itself or through a subsidiary or other
entity in which UtiliCorp holds an ownership interest, may obtain an interest
in one or more natural gas businesses located in the state of Victoria,
Australia, This letter is submitted pursuant to the requirements of Section
33(a)(2) of the Public Utility Act of 1935, as amended (the Act).
The Iowa Utilities Board hereby certifies to you that it has the authority
and resources to protect ratepayers subject to its jurisdiction with respect
to this acquisition, and that it intends to exercise its authority.
The Iowa Utilities Board has jurisdiction over the retail natural gas rates
of Peoples Natural Gas in the state of Iowa, which is a public utility
company as such term is defined in the Act.
Sincerely,
/s/ Allan T. Thoms
Allan T. Thoms
Chairman
<PAGE>
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EXHIBIT 3-3
FILE NO. 70-9549
=====================================================================
[LETTERHEAD OF PUBLIC SERVICE COMMISSION OF WEST VIRGINIA]
At a session of the PUBLIC SERVICE COMMISSION OF WEST VIRGINIA in the City
of Charleston on the 9th day of July, 1998.
CASE NO. 98-0613-EG-PC
UTILICORP UNITED, INC.
Petition for consent and approval to acquire one or more ownership
interests in the Victoria, Australia gas industry, and to undertake
financing related thereto, pursuant to W. Va. Code ss.24-2-12.
COMMISSION ORDER
On May 27, 1998, UtiliCorp United, Inc. (UtiliCorp) filed a petition with
the Commission requesting consent and approval to participate in a public
bidding process to acquire one or more ownership interests in the Victoria,
Australia gas industry, and to undertake financing related thereto, pursuant to
W. Va. Code ss.24-2-12 and Rule 10(5) of the Commission's Rules of Practice and
Procedure, 150 C.S.R. Series 1. In support of its petition, UtiliCorp advised
that it is engaged in a process designed to lead to its indirect acquisition of:
(1) up to a 50% ownership interest in one of three (3) "stapled" natural gas
businesses in the State of Victoria, Australia, each of which consists of a
natural gas distributor and a natural gas retailer; or (2) a certain pipeline or
storage business. Petition, paragraph 5. In addition, UtiliCorp indicates that
it may bid to acquire a minority -- likely no more than 20% -- investment in the
remaining "stapled" businesses or the pipeline and storage business. Id.
Specifically, UtiiiCorp advises that each of three Victoria natural gas
retailer/distribution companies, as well as certain gas transmission and supply
businesses, will be put up for bid beginning in May 1998. Id., paragraph 6. The
bidding process consists of two (2) phases. First, parties will make an
indicative bid which amounts to a non-binding offer. Second, from those parties
submitting indicative bids, the government of Victoria will select a number of
finalists, who will be given the opportunity to undertake a comprehensive due
diligence inquiry. Following such inquiry, each finalist will make a binding bid
for each business. Id. Indicative bidding will commence in June 1998. Final,
binding, bids are expected to commence in August 1998. Id., paragraph 7.
UtiliCorp then describes in detail its understanding of the timetable for
bidding on the various businesses. Id., paragraphs 8-11. UtiliCorp anticipates
that its aggregate investment in these businesses will not exceed $500 million
(U.S.). Petition, paragraph 12. The Commission previously approved UtiliCorp's
acquisition of an ownership interest in United Energy, an Australian electric
distribution company, through a similar bidding process. Id., paragraph 13; see
"Commission Order," UtiliCorp United, Inc., Case No. 95-0280-EG-PC (Aug.
<PAGE>
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2,1995). UtiliCorp notes that the government of Victoria will view unfavorably
offers conditioned on obtaining regulatory approvals, the Company must obtain
all such approvals in advance of making final bids and requests Commission
approval by no later than July 31, 1998. Id., paragraph 14. Finally, UtiliCorp
asserts that there will be no adverse impact on the Company's West Virginia
customers since any investment will operate as a totally separate entity from
UtiliCorp and West Virginia customers will see no change in their daily utility
service or rates. Id., paragraph 15.
On June 29, 1998, Commission Staff (Staff) filed an Initial and Final Joint
Staff Memorandum, recommending that UtiliCorp's request for advance consent and
approval of its purchase of an ownership interest in the natural gas businesses
described in its petition should be approved.
DISCUSSION
The Commission concludes that UtiliCorp's petition for advance consent and
approval of its purchase of an ownership interest in one or more of the natural
gas businesses, described in its petition, should be granted.
The applicable provision of the Code provides, in relevant part:
Unless the consent and approval of the public service commission of West
Virginia is first obtained:... (b) no public utility ... may purchase,
lease, or in any other manner acquire control, direct or indirect, over
the franchises, licenses, permits, plants, equipment, business or other
property of any other utility; ... (d) no public utility ... may purchase,
acquire, take or receive any stock, stock certificates, bonds, notes or
other evidence of indebtedness of any other public utility....
The commission may grant its consent in advance ... upon proper showing
that the terms and conditions thereof are reasonable and that neither
party thereto is given an undue advantage over the other, and do not
adversely affect the public in this state....
W. Va. Code ss. 24-2-12.
Based on the averments in UtiliCorp's petition, as well as the exhibit(s)
thereto, and Staff's recommendations, the Commission finds that the terms and
conditions of UtiliCorp's purchase of an ownership interest in the Australian
natural gas businesses described in its petition are reasonable, and further
finds that neither party to such purchase is given an undue advantage over the
other, and further finds that the terms and conditions of such purchase do not
adversely affect the public in this State. Provided, however, that the
Commissions s advance consent and approval of UtiliCorp's purchase of an
ownership interest in the Australian natural gas businesses described in its
petition is conditioned on UtiliCorp's investment in these businesses not
exceeding $500 million (U.S.).
2
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The Commission further concludes that UtiliCorp should be required to file a
report with the Commission advising it, and Commission Staff, of the results of
the Company's efforts to acquire an ownership interest in the natural gas
businesses described in its petition, and the pertinent details of such
acquisition, within ninety (90) days after the conclusion of all relevant
transactions.
FINDINGS OF FACT
1. On May 27, 1998, UtiliCorp United, Inc. (UtiliCorp) filed a
petition with the Commission requesting consent and approval to
participate in a public bidding process to acquire one or more
ownership interests in the Victoria, Australia gas industry, and
to undertake financing related thereto, pursuant to W. Va. Code
ss.24-2-12 and Rule 10(5) of the Commission's Rules of Practice
and Procedure, 150 C.S.R. Series 1.
2. UtiliCorp advised that it is engaged in a process designed to
lead to its indirect acquisition of: (1) up to a 50% ownership
interest in one of three (3) "stapled" natural gas businesses in
the State of Victoria, Australia, each of which consists of a
natural gas distributor and a natural gas retailer; or (2)
certain gas pipeline or storage businesses. Petition, paragraph
5. In addition, UtiliCorp indicates that it may bid to acquire a
minority -- likely no more than 20% -- investment in the
remaining "stapled" businesses or the pipeline and storage
business. Id.
3. UtiliCorp anticipates that its aggregate investment in these
businesses will not exceed $500 million (U.S.). Petition,
paragraph 12.
4. The Commission previously approved UtiliCorp's acquisition of an
ownership interest in United Energy, an Australian electric
distribution company, through a similar bidding process. Id.,
paragraph 13; see "Commission Order," UtiliCorp United, Inc.,
Case No. 95-0280-EG-PC (Aug. 2, 1995).
5. On June 29, 1998, Commission Staff (Staff) filed an Initial and
Final Joint Staff Memorandum, recommending that UtiliCorp's
request for advance consent and approval of its purchase of an
ownership interest in the natural gas businesses described in its
petition should be approved.
6. The Commission adopts and incorporates all recitals of fact
otherwise set forth herein.
CONCLUSIONS OF LAW
1. UtiliCorp's petition for advance consent and approval of its
purchase of an ownership interest in one or more of the natural
gas businesses, described in its petition, should be granted.
2. The terms and conditions of UtiliCorp's purchase of an ownership
interest in the Australian natural gas businesses described in
its petition are reasonable, do not give either party
<PAGE>
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3
to such purchase an undue advantage over the other, and do not
adversely affect the public in this State. See W. Va. Code ss.
24-2-12.
3. The Commission's advance consent and approval of UtiliCorp's
purchase of an ownership interest in the Australian natural gas
businesses described in its petition is conditioned on
UtiliCorp's investment in these businesses not exceeding $500
million (U.S.).
4. UtiliCorp should be required to file a report with the Commission
advising it, and Commission Staff, of the results of the
Company's efforts to acquire an ownership interest in the natural
gas businesses described in its petition, and the pertinent
details of such acquisition, within ninety (90) days after the
conclusion of all relevant transactions.
5. The Commission adopts and incorporates all legal conclusions
otherwise set forth herein.
ORDER
IT IS, THEREFORE, ORDERED that UtiliCorp United, Inc.'s May 27, 1998
petition requesting advance Commission consent and approval to participate in a
public bidding process to acquire one or more ownership interests in the
Victoria, Australia gas industry, and to undertake financing related thereto,
pursuant to W. Va. Code ss.24-2-12 and Rule 10(5) of the Commission's Rules of
Practice and Procedure, 150 C.S.R. Series I should be, and hereby is, granted.
IT IS FURTHER ORDERED that the Commission's consent and approval herein is
conditioned on UtiliCorp's investment in these businesses not exceeding $500
million (U.S.).
IT IS FURTHER ORDERED that UtiliCorp shall file a report with the
Commission advising the Commission and Commission Staff of the results of
UtiliCorp's efforts to acquire an ownership interest in the natural gas
businesses described in its petition, and the pertinent details of such
acquisition, within ninety (90) days after the conclusion of all relevant
transactions.
IT IS FURTHER ORDERED that, upon entry hereof, this proceeding shall be
removed from the Commission's docket of active cases.
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4
IT IS FURTHER ORDERED that the Commission's Executive Secretary serve a
copy of this Order upon all parties of record by United States First Class Mail
and upon Commission Staff by hand delivery.
A The Copy, Teste:
/s/ Sandra Squire
---------------------
Sandra Squire
Executive Secretary
<PAGE>
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EXHIBIT 3-4
FILE NO. 70-9549
[LETTERHEAD OF COLORADO PUBLIC UTILITIES COMMISSION]
[SEAL OF THE STATE OF COLORADO]
May 26, 1998
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
Dear Commission Members:
The Public Utilities Commission of the State of Colorado has been advised
that UtiliCorp United Inc., either itself or through a subsidiary or other
entity in which UtiliCorp holds an ownership interest, may obtain an interest in
one or more natural gas businesses in Australia. This letter is submitted
pursuant to the requirements of Section 3(b) of the Public Utility Holding
Company Act of 1935, as amended (the "Act").
The Public Utilities Commission of the State of Colorado has jurisdiction
over the retail electric and natural gas rates of UtiliCorp United Inc., which
is a public utility company as such term is defined in the Act. In Colorado,
UtiliCorp United Inc. provides electric service to retail customers through its
WestPlains Energy Division and retail natural gas service through its Peoples
Natural Gas Division.
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The Public Utilities Commission of the State of Colorado hereby certifies
that it has the authority and resources to protect ratepayers subject to its
jurisdiction with respect to any foreign acquisitions and that it intends to
exercise its authority.
Sincerely,
/s/ Bruce N. Smith
Bruce N. Smith
Director
cc: Steven H. Denman, Esq.
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RECEIVED
MAY 27 1998
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EXHIBIT 3-5
FILE NO. 70-9549
[LETTERHEAD OF KANSAS CORPORATION COMMISSION]
May 26, 1998
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
Dear Commission Members:
This letter is submitted to you pursuant to the requirements of Section
33(a)(2) of the Public Utility Holding Company Act of 1935, as amended, 15
U.S.C. 79z-5b (1996) ("PUHCA"). On May 8, 1998, counsel for UtiliCorp United,
Inc. ("UtiliCorp"), requested this letter from the State Corporation
Commission of the State of Kansas ("KCC"), in order to satisfy all regulatory
requirements prior to its acquisition, either by itself, or through a
subsidiary or other entry in which UtiliCorp holds and ownership interest, of
an interest in electric and gas facilities in foreign countries.
The KCC is the statutorily-created agency empowered to regulate all
public utilities in the Slate of Kansas, including UtiliCorp and its
divisions, Peoples Natural Gas and West Plains Energy. With this letter, the
KCC hereby certifies that it has the authority and resources to protect
ratepayers subject to its jurisdiction with respect to any foreign
acquisitions, and that it intends to exercise its authority. Further, this
Commission notes that the certification may be revised or withdrawn
prospectively as to any future acquisition. In making this certification,
this Commission is relying on the belief that the Securities and Exchange
Commission will enforce
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all sections of the PUHCA which govern UtiliCorp's proposed investment in the
Australian gas properties over which it has jurisdiction.
Sincerely,
/s/ John Wine
---------------------------------------
John Wine
Chair
Kansas Corporation Commission
1500 SW Arrowhead Rd.
Topeka, Kansas 66604-4027
cc: Jim Grimes
Foulston & Siefkin, L.L.P.
1515 NationsBank Tower
534 Kansas Avenue
Topeka, Kansas 66603
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EXHIBIT 3-6
FILE NO. 70--9549
AUG 18 1998
MICHAEL J BRADLEY
BEFORE THE MINNESOTA PUBLIC UTILITIES COMMISSION
Edward A. Garvey Chair
Joel Jacobs Commissioner
Marshall Johnson Commissioner
LeRoy Koppendrayer Commissioner
Gregory Scott Commissioner
In the Matter of the Petition by ISSUE DATE: August 17, 1998
UtiliCorp United, Inc. for Certification to
Invest in a Foreign Utility DOCKET NO. G-007, 011/S-98-682
ORDER GRANTING CERTIFICATION
WITH CONDITIONS
PROCEDURAL HISTORY
On May 19,1998, UtiliCorp United Inc. filed a petition requesting Commission
certification regarding foreign investments in Australia. Specifically, the
Company requested that the Commission provide letter to the SEC certifying
that:
(1) The Commission has the authority and resources to protect the ratepayers
of Minnegasco; and
(2) The Commission intends to exercise its authority.
On June 4, 1998, the Minnesota Department of Public Service (the Department)
filed comments. The Department recommended that the Commission provide the
requested certification, subject to several conditions and limitations.
The Commission met on August 6, 1998 to consider this matter.
FINDINGS AND CONCLUSIONS
I. THE FEDERAL ENERGY POLICY ACT OF 1992
The federal Energy Policy Act of 1992 was signed into law an October 24,
1992. Among other things, the Act exempts from the provisions of the Public
Utilities Holding Company Act (PUHCA) a new class of utility, the foreign
utility company. Foreign utility companies may be
<PAGE>
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exempt from PUHCA requirements even if they are subsidiaries or affiliates of
a state-regulated holding company or public utility. This exemption from
PUHCA requirements applies only if every state commission with jurisdiction
over the public utility certifies to the SEC that the commission:
- - - - - - - - - - - - - - - - - - has the authority and the resources to protect ratepayers subject to its
jurisdiction; and
- - - - - - - - - - - - - - - - - - intends to exercise its authority
II. UTILICORP'S PETITION
UtiliCorp intends to participate in a bidding process in an attempt to
acquire one or more natural gas properties, valued up to $500 Million,
located in Australia. These properties consist of three local distribution
companies, three retail marketers, pipeline facilities and storage facilities
being offered by the State of Victoria. The proposed transaction equals
approximately 9.8 percent of UtiliCorp's assets and 17.3 percent of
UtiliCorp's total capitalization. UtiliCorp' s total foreign utility
investments currently equal approximately 22 percent of the company's total
capitalization. With the additional $500 million. UtiliCorp's total foreign
utility company investments will approximate 39 percent of total
capitalization.
UtiliCorp explained the reason for its petition to the Commission as follows.
The Company wants the proposed acquisition to be exempt from the PUHCA filing
requirements. Since its foreign investments exceed the 5 percent of
capitalization limit established as a condition for the PUHCA exemption based
on state certifications, it must obtain the exemption from the SEC under
Section 3(b) of the Act, 15 U.S.C. ss. 79c.(b). According to UtiliCorp, the
SEC has required the Company to provide, as a condition to the SEC finding
that an exemption would not be contrary to the public interest, state
commission certification that the commission has the authority and the
resources to protect ratepayers subject to its jurisdiction and intends to
exercise is authority.
In support for the request, UtiliCorp stated:
- - - - - - - - - - - - - - - - - - The Australian natural gas properties and the possible loan guaranty are
too small to jeopardize the financial health of UtiliCorp.
- - - - - - - - - - - - - - - - - - No Minnesota property would be encumbered as a result of the acquisition.
- - - - - - - - - - - - - - - - - - UtiliCorp's subsidiaries, Peoples Natural Gas Company (Peoples) and
Northern Minnesota Utilities (NMU) each have been assigned their own
capital structures which would be unaffected by any changes in the
UtiliCorp capital structure.
- - - - - - - - - - - - - - - - - - UtiliCorp believes that the Commission has sufficient authority under Minn.
Stat. ss. 216B to protect the interests of Minnesota ratepayers by (i)
establishing a hypothetical capital structure in Peoples and NMU'S next
general rate case, if appropriate; and (ii) investigating any affiliated
interest transactions under Minn. Stat. 216B.48.
<PAGE>
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2
III. THE DEPARTMENT
The Department stated that the foreign investments proposed will be owned by
a separate UtiliCorp subsidiary. Therefore, in the Department's view,
UtiliCorp's Minnesota subsidiaries (Peoples and NMU) will be insulated from
any transactions or potential liabilities of the foreign interest and will
not assume any additional financial risk. The Department further stated that
due to their size, the proposed maximum interests in the Australian Natural
gas properties and the maximum possible loan guaranty are not expected to
jeopardized the financial health of UtiliCorp.
The Department recommended that the Commission provide the requested
certification subject to several specific conditions and limitations. The
Department noted several factors in support of its recommendation.
- - - - - - - - - - - - - - - - - - that the Department's recommended limitations and reporting requirements
will provide timely information in order to uncover any concerns should
they arise;
- - - - - - - - - - - - - - - - - - that each of UtiliCorp's past foreign utility company investments are
located in stable countries with strong economies;
- - - - - - - - - - - - - - - - - - that by having interests in different utilities and countries, UtiliCorp is
able to diversify its business risks while retaining focus on the service
areas where it has the greatest expertise;
- - - - - - - - - - - - - - - - - - that Peoples' and NMU's customers will see no change in their utility
service as a result of either the acquisition of the Australian natural gas
properties or the loan guaranty; and
- - - - - - - - - - - - - - - - - - that the Commission's authority under Minn. Stat. ss. 216B is adequate to
protect Minnesota ratepayer interests with respect to these acquisitions.
IV. COMMISSION ANALYSIS AND ACTION
After examining the facts presented in the Company's petition and the
Department's comments, the Commission finds that it has the authority and
resources to protect ratepayers, and that it intends to exercise its
authority for ratepayer protection.
A. THE COMMISSION'S AUTHORITY TO PROTECT RATEPAYERS
The Commission finds that it clearly possesses the requisite authority to
protect ratepayers subject to its jurisdiction, as required for Commission
certification under 15 U.S.C. ss. 79z-5b.
The Commission also finds that its authority will best be preserved if the
Commission sets certain conditions to its SEC certification. The Commission
will therefore condition the
<PAGE>
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3
certification as requested by the Department with the clarification that the
annual report will be due on or before August 31 of each year. By placing
these conditions and limitations upon the certificate, the Commission ensures
that its authority will protect ratepayers from any adverse effects from the
proposed foreign investment.
In previous requests from UtiliCorp for certification to the SEC regarding
foreign utility investment, the Commission has made similar findings
regarding the Commission's authority to protect ratepayers. (1)
B. THE COMMISSION'S INTENT TO EXERCISE ITS AUTHORITY
The Commission intends to exercise its authority, pursuant to Minn. Stat. ss.
ss. 216B.03, 216B.08, and 216B.16, to protect the interests of UtiliCorp's
ratepayers.
C. THE RESOURCES NECESSARY TO PROTECT RATEPAYERS
The Commission finds that, given the nature of UtiliCorp's proposed
transaction (as analyzed by the Department) and the conditions and
limitations placed upon its certification in this Order, it has adequate
staff and financial resources to protect Minnesota jurisdictional ratepayers
from possible harm or liability arising from UtiliCorp's proposed foreign
investment.
ORDER
1. The Commission certifies that it has the authority and resources to
protect the ratepayers subject to its jurisdiction and that it intends to
exercise that authority with respect to UtiliCorp's proposed foreign
investment.
The Commission's certification is subject to the following conditions
and limitations:
1) the certification is limited to UtiliCorp's new foreign utility
company investments in Australia up to $500 million.
2) UtiliCorp will provide advance notification of any intent to acquire
interest in foreign utility companies and obtain separate
certification for any such additional investments.
- - - - - - - - - - - - - - - - - ----------
(1) See, for example, In the Matter of a Petition by UtiliCorp United
Inc. for Minnesota Public Utilities Commission Certification to Invest in a
Foreign Utility under 15 U.S.C. ss. 79z-5b, Docket no. G-011/S-94-907, ORDER
GRANTING CERTIFICATION SUBJECT TO LIMITATIONS AND CONDITIONS (November 30,
1994).
<PAGE>
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4
3) UtiliCorp will not encumber any Minnesota property because of
these foreign investments.
4) UtiliCorp shall file with the Commission:
a. Copies of the required filings and reports relating to
UtiliCorp's foreign utility investments filed with the SEC at
the time it files these reports with the SEC;
b. Copies of all SEC rulings of Orders in this matter in a timely
manner; and
c. An annual report on all of UtiliCorp's subsidiary foreign
investment (Annual Report) to be filed by August 31 of each
year. The annual report will contain the following
information:
(1) UtiliCorp's total foreign investment to date by foreign
utility, subsidiary, and country;
(2) A list of all outstanding bonds issued for any foreign
utility company investment acquired by UtiliCorp or its
subsidiaries;
(3) UtiliCorp's consolidated capital structure, including
short-term debt; and
(4) The ratio of UtiliCorp's total foreign utility company
investments relative to UtiliCorp's total assets and
capitalization.
5) The Certification is conditioned on and subject to being removed or
withdrawn by the Commission as to any future foreign utility
company investment if the Commission deems such action is
warranted.
6) UtiliCorp will inform the Commission in a timely manner of the
acquisition of any ownership in any foreign utility under this
certification.
7) The Commission, the Department, and the RUD-OAG will have access to
the relevant books, records and financial statements (or copies
thereof) of UtiliCorp's business with foreign utilities, to the
extent necessary to protect UtiliCorp's ratepayers in Minnesota.
<PAGE>
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8) Accounting procedures will be in place to assure that UtiliCorp and
its ratepayers are adequately and fairly compensated for any common
or joint costs incurred for the benefit of the foreign utility.
5
9) All Minnesota Regulatory Agencies' costs charged to UtiliCorp for
the direct costs incurred by those agencies for the future review of
foreign investment notification and any related foreign investment
compliance reviews shall not be charged to UtiliCorp's
jurisdictional customers in Minnesota. (UtiliCorp will allocate
internal time pursuant to the G, E-999/CI-90-1008 Docket).
10) Any investment made under this certification shall comply with
applicable Minnesota and Federal law including the Public Utilities
Holding Act of 1935, as amended.
4. This Order shall become effective immediately.
BY ORDER OF THE COMMISSION
/s/ Burl W. Haar
Burl W. Haar
Executive Secretary
(S E A L)
This document can be made available in alternative formats (i.e., large print
or audio tape) by calling (651) 297-4596 (voice), (651) 297-1200 (TTY), or
1-800-627-3529 (TTY relay service).
<PAGE>
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EXHIBIT B-7
FILE NO. 70-9549
STATE OF MICHIGAN
BEFORE THE MICHIGAN PUBLIC SERVICE COMMISSION
* * * * *
In the matter of the application of )
UTILICORP UNITED INC., a Delaware corporation, )
for certification pursuant to Section 33(a)(2) of the ) Case No. U-11696
Public Utility Holding Company Act of 1935. )
- - - - - - - - - - - - - - - - - ------------------------------------------------------)
At the June 26, 1998 meeting of the Michigan Public Service Commission in
Lansing, Michigan.
PRESENT: Hon. John G. Strand, Chairman
Hon. John C. Shea, Commissioner
Hon. David A. Svanda, Commissioner
ORDER
On May 26, 1998, UtiliCorp United Inc. (UtiliCorp) filed an application
requesting certification pursuant to Section 33(a)(2) of the Public Utility
Holding Company Act of 1935 (PUHCA), 15 USC 79z-5b.
UtiliCorp is an electric and natural gas utility that operates in several
states, one Canadian province, New Zealand, and Australia. UtiliCorp also
engages in nonregulated business activities. It provides service in Michigan
through Michigan Gas Utilities (MGU), UtiliCorp's Michigan Division.
The Commission has issued certification pursuant to 15 USC 79z-5b
regarding UtiliCorp's investment in foreign utilities previously in Case No.
U-10302, Case No. U-10710, and Case No. U-10806. According to UtiliCorp's
application, the company believes there are additional potential investment
opportunities in Australia and throughout the world. UtiliCorp states that the
government of Victoria, Australia is in the process of restructuring and
privatizing certain gas transmission and supply businesses, including pipeline
and storage operations. UtiliCorp is presently preparing a bid to directly or
indirectly acquire up to a 50% equity ownership interest in one of three natural
gas businesses owned by the state of Victoria, Australia. Each business includes
a natural gas distributor and a natural gas retailer. In addition, UtiliCorp may
also bid to acquire a minority (20% or less) investment in certain natural gas
pipeline and storage businesses. In this application, UtiliCorp seeks a
Commission certification that will permit the company to pursue additional
equity investments in foreign utility companies in calendar year
<PAGE>
-23-
1998, not to exceed $500 million. UtiliCorp agrees to provide the Commission
with 30 days' notice of all investments, in increments of $100 million.
UtiliCorp represents that it will petition the Securities and Exchange
Commission for an order exempting UtiliCorp from the requirement that it
register as a holding company under Section 5 of PUHCA. UtiliCorp further
represents that its foreign investment subsidiaries are or will be foreign
utility companies that are exempt from regulation under PUHCA if every state
commission having jurisdiction over the electric or gas rates of an affiliated
public utility company certifies that the state commission has the authority and
resources to protect the utility's ratepayers and that the commission intends to
exercise that authority. UtiliCorp therefore requests that the Commission grant
that certification with respect to UtiliCorp and MGU.
UtiliCorp states that any investments will remain separate from UtiliCorp
and MGU. It asserts that the proposed transaction will not have any effect on
MGU's day-to-day utility services or rates and will not have a material
detrimental effect on the financial viability, capital structure, or cost of
capital of UtiliCorp or MGU. It says that no utility assets of MGU will be
pledged or encumbered
Page 2
U-11696
for this investment. It commits that UtiliCorp and its affiliates will not seek
recovery of the direct or indirect costs of the investment from Michigan
ratepayers and that the proposed transactions will have no effect on the tax
revenues of Michigan political subdivisions in which any structure, facility, or
equipment of MGU or its subsidiaries are located. UtiliCorp further commits that
it will make available books and records reasonably necessary for the Commission
to determine that Michigan ratepayers are not being adversely affected. It
acknowledges that a grant of certification is not approval of the transaction or
a finding that the transaction is reasonable.
After a review of the application, the Commission finds that it is
appropriate to certify that it has the authority and resources under Michigan
law to protect Michigan's utility ratepayers and that it intends to exercise
that authority. The Commission also finds that ex parte approval is appropriate.
The Commission grants the requested certification while reserving the right to
prospectively revoke it, as PUHCA permits, and on condition that UtiliCorp and
MGU not seek to recover from Michigan ratepayers any direct or indirect costs of
the investment in foreign utilities. Furthermore, the granting of the
certification is not approval or endorsement of the transaction. Finally,
UtiliCorp and its affiliates shall provide the Commission written notice of its
actual investments pursuant to the certification granted in this order in
increments of $100 million.
The Commission FINDS that:
a. Jurisdiction is pursuant to 1909 PA 106, as amended, MCL 460.551 et
seq.; MSA 22.151 et seq.; 1919 PA 419, as amended, MCL 460.51 et seq.;
MSA 22.1 et seq.; 1939 PA 3, as amended, MCL 460.1 et seq.; MSA
22.13(1) et seq.; 1969 PA 306, as amended, MCL
<PAGE>
-24-
24.201 et seq.; MSA 3.560(101) et seq.; 15 USC 79z-5b; and the
Commission's Rules of Practice and Procedure, as amended, 1992 AACS, R
460.17101 et seq.
Page 3
U-11696
b. With respect to the transaction described in UtiliCorp's application,
the Commission has the authority and resources to protect ratepayers
subject to its jurisdiction and intends to exercise that authority.
c. Ex parte approval is appropriate.
THEREFORE, IT IS ORDERED that the certification requested by UtiliCorp
United Inc. pursuant to 15 USC 79z-5b is granted. With respect to the
transaction described in the application, the Commission has the authority and
resources to protect ratepayers subject to its jurisdiction and intends to
exercise that authority.
The Commission reserves jurisdiction and may issue further orders as
necessary.
Any party desiring to appeal this order must do so in the appropriate
court within 30 days after issuance and notice of this order, pursuant to MCL
462.26; MSA 22.45.
MICHIGAN PUBLIC SERVICE COMMISSION
(S E A L) /s/ John G. Strand
----------------------------------
Chairman
/s/ John C. Shea
----------------------------------
Commissioner
By its action of June 26, 1998.
/s/ Dorothy Wideman /s/ David A. Svanda
- - - - - - - - - - - - - - - - - ---------------------------------- ----------------------------------
Its Executive Secretary Commissioner
Page 4
U-11696
<PAGE>
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EXHIBIT 3-8
FILE NO. 70-9549
[Letterhead of South Dakota Public Utilities Commission]
June 11, 1998
Securities and Exchange Commission
450 Fifth Street N.W.
Washington, DC 20549
Re: UtiliCorp United Inc
Docket NG98-005
Dear Commission Members
The South Dakota Public Utilities Commission has been advised that UtiliCorp
United Inc. ("UtiliCorp"), through a subsidiary or other entity in which
UtiliCorp holds an ownership interest, has or may obtain an interest in gas
facilities in Australia. This letter is submitted in connection with UtiliCorp's
request for an exemption from registration under Section 3(b) or by notification
under Section 33 of the Public Utility Holding Company Act of 1935, as amended
(the "Act").
The South Dakota Public Utilities Commission hereby certifies that, pursuant to
SDCL Chapter 49-34A, it has the authority and resources to protect ratepayers
subject to its jurisdiction and it intends to exercise that authority with
respect to investments in Australian natural gas properties and facilities up to
$500 million, United States dollars.
The South Dakota Public Utilities Commission has jurisdiction over the retail
gas rates of Peoples Natural Gas Company, which is a public utility company as
such term is defined in the Act. Peoples Natural Gas Company is a Division of
UtiliCorp. This certification is further expressly conditioned on and is subject
to being revised or withdrawn on a going forward basis
<PAGE>
-26-
by this Commission as to any future foreign utility company investments if the
Commission deems such action is warranted.
Sincerely,
/s/ James A. Burg /s/ Pam Nelson /s/ Laska Schoenfeider
James A. Burg Pam Nelson Laska Schoenfeider
Chairman Commissioner Commissioner
cc. Mr. Robert Wason
Securities and Exchange Commission
Office of Public Utility Regulation
Division of Investment Management
450 Fifth Street N.W.
Washington, DC 20549
