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File No. 70-9089
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
POST-EFFECTIVE AMENDMENT NO. 2
TO
FORM U-1
APPLICATION/DECLARATION
UNDER
THE PUBLIC UTILITY HOLDING COMPANY ACT OF 1935
(the Act)
GRANITE STATE ELECTRIC COMPANY (Granite)
MASSACHUSETTS ELECTRIC COMPANY (Mass. Electric)
NANTUCKET ELECTRIC COMPANY (Nantucket)
THE NARRAGANSETT ELECTRIC COMPANY (Narragansett)
NARRAGANSETT ENERGY RESOURCES COMPANY (NERC)
NEW ENGLAND ELECTRIC TRANSMISSION CORPORATION (NEET)
NEW ENGLAND ENERGY INCORPORATED (NEEI)
NEW ENGLAND HYDRO-TRANSMISSION ELECTRIC COMPANY, INC.
(Mass. Hydro)
NEW ENGLAND HYDRO-TRANSMISSION CORPORATION (NH Hydro)
NEW ENGLAND POWER COMPANY (NEP)
NEW ENGLAND POWER SERVICE COMPANY (NEPSCO)
and
NEW ENGLAND ELECTRIC SYSTEM (NEES)
(Names of companies filing this statement)
25 Research Drive, Westborough, Massachusetts 01582
407 Miracle Mile, Suite 1, Lebanon, NH 03766 (Granite)
25 Fairgrounds Road, Nantucket, MA 02554 (Nantucket)
280 Melrose Street, Providence, RI 02901 (Narragansett)
(Address of principal executive offices)
NEW ENGLAND ELECTRIC SYSTEM
(Name of top registered holding company parent
of the participating companies herein)
John G. Cochrane Robert King Wulff
Treasurer Corporation Counsel
25 Research Drive 25 Research Drive
Westborough, MA 01582 Westborough, MA 01582
(Names and addresses of agents for service)
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Form U-1 Application/Declaration dated August 18, 1997 (Commission's
File No. 70-9089), relating to short-term borrowing of certain subsidiaries
of NEES for the period from November 1, 1997 through October 31, 2001, as
amended, was declared effective by Order of the Commission dated October
29, 1997 (HCAR No. 26768). The Application/Declaration is hereby further
amended as follows:
Item 2 "Fees, Commissions and Expenses" is hereby amended by adding
the following paragraph:
The additional lines of credit necessary to support the
incremental short-term borrowing are estimated to be $200,000
annually.
Item 6(a) "Exhibits" is hereby amended by supplying the following
exhibits, filed herewith:
D-1(d) Petition of NEP to the New Hampshire Public Utilities
Commission
D-2(d) Order of the New Hampshire Public Utilities Commission with
respect to NEP
F-1 Opinion of Counsel
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SIGNATURES
Pursuant to the requirements of the Public Utility Holding Company Act
of 1935, each undersigned company has duly caused this Post-Effective
Amendment No. 2 to Form U-1 Application/Declaration to be signed on its
behalf, as indicated, by the undersigned officers thereunto duly authorized by
each such company.
NEW ENGLAND ELECTRIC SYSTEM
MASSACHUSETTS ELECTRIC COMPANY
NANTUCKET ELECTRIC COMPANY
THE NARRAGANSETT ELECTRIC COMPANY
NARRAGANSETT ENERGY RESOURCES COMPANY
NEW ENGLAND ELECTRIC TRANSMISSION CORPORATION
NEW ENGLAND ENERGY INCORPORATED
NEW ENGLAND HYDRO-TRANSMISSION ELECTRIC COMPANY, INC.
NEW ENGLAND HYDRO-TRANSMISSION CORPORATION
NEW ENGLAND POWER COMPANY
NEW ENGLAND POWER SERVICE COMPANY
s/John G. Cochrane
By
John G. Cochrane, Treasurer
GRANITE STATE ELECTRIC COMPANY
s/John G. Cochrane
By
John G. Cochrane, Assistant Treasurer
Date: May 7, 1998
The name "New England Electric System" means the trustee or trustees for the
time being (as trustee or trustees but not personally) under an agreement and
declaration of trust dated January 2, 1926, as amended, which is hereby
referred to, and a copy of which as amended has been filed with the Secretary
of the Commonwealth of Massachusetts. Any agreement, obligation or liability
made, entered into or incurred by or on behalf of New England Electric System
binds only its trust estate, and no shareholder, director, trustee, officer or
agent thereof assumes or shall be held to any liability therefor.
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EXHIBIT INDEX
Exhibit No. Description Page
- ----------- ------------------------------------ --------------
D-1(d) Petition of NEP to the New Hampshire Filed herewith
Public Utilities Commission
D-2(d) Order of the New Hampshire Public Filed herewith
Utilities Commission with respect
to NEP
F-1 Opinion of Counsel Filed herewith
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Exhibit D-1(d)
THE STATE OF NEW HAMPSHIRE
BEFORE THE
NEW HAMPSHIRE PUBLIC UTILITIES COMMISSION
Petition of New England Power Company
For Certain Authority With Respect to
the Issuance and Renewal of Short-Term Securities
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To the Public Utilities Commission:
New England Power Company (NEP), a corporation duly organized and
existing under the laws of The Commonwealth of Massachusetts and engaged in
the generation, transmission, and sale at wholesale of electric energy
within the State of New Hampshire with its principal office at 25 Research
Drive, Westborough, Massachusetts respectfully represents as follows:
1. NEP is a subsidiary of New England Electric System (NEES), a
public utility holding company registered under the Public Holding Company
Act of 1935.
2. By Order No. 20,952 issued in Docket No. DF93-152, NEP is
authorized, without first obtaining approval of the Commission, to issue and
renew its notes, bonds, and other evidences of indebtedness payable in less
than twelve months after the date thereof, in an aggregate amount thereof
outstanding at any time (not including any such indebtedness which is to be
retired with the proceeds of any new borrowings) not in excess of $375
million. As of March 1, 1998, NEP had $209 million of short-term debt
outstanding.
3. NEP requests that its short-term borrowing authority be
increased to a maximum level of $750 million on a temporary basis. After
the completion of divestiture, NEP will refile for a lower maximum level of
short-term borrowing authority. As described in the Affidavit of John G.
Cochrane, attached as Exhibit 1, NEP desires to increase its ability to
finance the buyout of purchased power contracts with non-utility generators
and the repurchase of certain of its mortgage bonds through the use of
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short-term debt prior to divestiture. Upon divestiture, NEP will have to
defease its outstanding mortgage bonds. To avoid additional defeasance
costs, NEP does not plan to issue any additional mortgage bonds prior to
divestiture. Therefore, NEP's primary funding vehicle will be short-term
debt.
4. NEP respectfully submits that incurring short-term indebtedness
not in excess of $750 million will be consistent with the public good.
WHEREFORE, your Petitioner prays:
(a) That, in accordance with the provisions of R.S.A. 369:7,
NEP be authorized, without first obtaining approval of the Commission, from
time to time, to issue and renew its notes, bonds, and other evidences of
indebtedness payable in less than twelve months after the date thereof, in
an aggregate amount thereof outstanding at any time (not including any such
indebtedness which is retired with the proceeds of any new borrowings) not
in excess of $750 million; and
(b) That the Commission take such further steps and make such
other findings and orders as may in its judgment be wise and expedient.
Respectfully submitted,
NEW ENGLAND POWER COMPANY
s/Thomas G. Robinson
By:
Thomas G. Robinson
Attorney for
New England Power Company
Date: March 13, 1998
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Exhibit D-2(d)
DF 98-032
New England Power Company
Petition for Increase in Short-Term Borrowing Authority
Order NISI Approving Request for Increase in Short-Term Borrowing
Authority
ORDER NO. 22,907
April 28, 1998
On March 13, 1998, New England Power Company, Inc. (NEP), filed a
petition with the New Hampshire Public Utilities Commission (Commission),
pursuant to RSA 369, for authority to increase its short-term borrowing
authority from $375 million to $750 million on a temporary basis. NEP's
petition indicates that following the completion of the divestiture of
substantially all of its non- nuclear generation assets, it will refile for
a lower maximum level of short-term borrowing authority.
In its Order No. 20,952 in DF 93-152, issued September 8, 1993, the
Commission provided NEP authorization to issue and renew its notes, bonds,
and other evidences of indebtedness payable in less than twelve months after
the date thereof, in an aggregate amount not to exceed $375 million. In the
instant petition, NEP indicates that the request for a higher level of
short-term borrowing authority of $750 million is for the purpose of
increasing its ability to finance the buyout of purchased power contracts
with non-utility generators and for the repurchase of certain of its
mortgage bonds. At the time of the anticipated divestiture, NEP will have to
defease its outstanding mortgage bonds. In order to avoid any additional
defeasance costs at that time, NEP does not plan to issue any additional
mortgage bonds prior to divestiture. Therefore, NEP's primary funding
vehicle will be short-term debt.
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NEP has indicated that, with its on-going short-term borrowing needs
in a range of $l50 to $225 million, a net potential short-term borrowing
obligation associated with its variable rate tax-exempt bonds of
approximately $167 million, and potential non-utility generator buyouts that
are currently being negotiated of approximately $330 million, a range of
potential short-term borrowing needs of $647 million to $722 million is
obtained. Accordingly, NEP has requested a total maximum short-term
borrowing capacity of $750 million.
Based upon our review of NEP's filing, and the proposed purposes of
the increased short-term borrowing authority, we will approve the Company's
request as filed. We will direct the Company to file within 60 days of the
divestiture its intentions with respect to the higher maximum short-term
borrowing authority provided for herein. NEP should make the same filing in
the event the divestiture does not go forward by December 31, 1999.
Based upon the foregoing, it is hereby
ORDERED NISI, that New England Power Company, pursuant to RSA 369, is
authorized to increase its short-term borrowing authority from $375 million
to $750 million on a temporary basis; and it is
FURTHER ORDERED, that New England Power Company shall file within 60
days of the divestiture of substantially all of its non-nuclear generation
assets a statement of its intentions with respect to the higher maximum
short-term borrowing authority provided for herein; and it is
FURTHER ORDERED, that, in the event that the divestiture does not go
forward by December 31, 1999, NEP shall similarly file a statement of its
intentions with respect to the level of short-term debt as authorized
herein; and it is
FURTHER ORDERED, that on or about January 1 and July 1 of each year
New England Power Company shall file with this Commission a detailed
statement, duly sworn to by its treasurer, showing the disposition of the
proceeds of said borrowings; and it is
FURTHER ORDERED, that pursuant to N.H. Admin. Rules, Puc 1604.03 or
Puc 1605.03, the Petitioner shall cause a copy of this Order Nisi to be
published once in a statewide newspaper of general circulation or of
circulation in those portions of the state where operations are conducted,
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such publication to be no later than May 5, 1998 and to be documented by
affidavit filed with this office on or before May 12, 1998; and it is
FURTHER ORDERED, that all persons interested in responding to this
petition be notified that they may submit their comments or file a written
request for a hearing on this matter before the Commission no later than May
19, 1998; and it is
FURTHER ORDERED, that any party interested in responding to such
comments or request for hearing shall do so no later than May 26, 1998; and
it is
FURTHER ORDERED, that this Order Nisi shall be effective May 28, 1998,
unless the Commission provides otherwise in a supplemental order issued
prior to the effective date.
By order of the Public Utilities Commission New Hampshire this twenty-
eighth day of April, 1998.
s/ Douglas L. Patch s/ Bruce B. Ellsworth s/ Susan S. Geiger
___________________ _____________________ ___________________
Douglas L. Patch Bruce B. Ellsworth Susan S. Geiger
Chairman Commissioner Commissioner
Attested by:
s/ Claire D. DiCicco
___________________
Claire D. DiCicco
Assistant Secretary
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Exhibit F-1
25 Research Drive, Westborough, Massachusetts 01582
===================================================
May 7, 1998
Securities and Exchange Commission
450 Fifth Street, NW
Washington, DC 20549
Re: New England Electric System et al
File No. 70-9089
Dear Commissioner:
New England Electric System (NEES) and eleven of its subsidiaries,
Granite State Electric Company (Granite), Massachusetts Electric Company
(Mass. Electric), Nantucket Electric Company (Nantucket), The Narragansett
Electric Company (Narragansett), Narragansett Energy Resources Company
(NERC), New England Electric Transmission Corporation (NEET), New England
Energy Incorporated (NEEI), New England Hydro-Transmission Electric Company,
Inc. (Mass. Hydro), New England Hydro-Transmission Corporation (NH Hydro),
New England Power Company (NEP), and New England Power Service Company
(NEPSCO) (collectively, the Participating Companies), filed an
Application/Declaration, dated August 18, 1997, on Form U-1 with your
Commission, regarding their participation in the NEES Money Pool (the Pool)
and short-term borrowings by certain of the Participating Companies from
November 1, 1997, to October 31, 2001. As a part of that
Application/Declaration, NEP requested authorization for borrowings of $375
million. The Application/Declaration, as amended, was declared effective by
Order of the Commission dated October 29, 1997 (HCAR No. 26768). By Post-
Effective Amendment No. 1, dated March 6, 1998, NEP sought to increase its
authorization to $750 million.
The New Hampshire Public Utilities Commission (NHPUC) has jurisdiction
over the proposed issuance of short-term promissory notes by NEP. By Order
dated April 28, 1998 (Order No. 22,907 in DF 98-032), the NHPUC issued an
Order Nisi authorizing NEP to increase short-term borrowing authority to
$750 million on a temporary basis. NEP is directed to file within 60 days
after the divestiture of its non-nuclear generation a statement of its
intentions with respect to the new maximum short-term borrowing authority.
The Order Nisi shall become effective May 28, 1998, unless the NHPUC
provides otherwise in a supplemental order issued prior thereto.
The Massachusetts Department of Telecommunications and Energy (MDTE),
previously the Massachusetts Department of Public Utilities (MDPU), has
jurisdiction over the participation in the Pool as lenders by Mass.
Electric, Mass. Hydro, and NEP. The MDPU issued an order, dated January 18,
1989 (DPU 88- 166), authorizing Mass. Electric, Mass. Hydro, and NEP to
participate in the Pool under the current terms. By Order dated October 10,
1995 (DPU 95-67), Nantucket was authorized to participate in the Money Pool
as both a borrower and investor.
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Other than the regulatory approvals described above, no other
regulatory approval from any state agency is necessary for NEP to undertake
the proposed transactions.
Other Limitations
The NEP Board of Directors has authorized borrowings to a maximum
amount of $350 million. Further action of that Board will be required prior
to incurring short-term indebtedness in greater amounts.
The Articles of Organization and By-laws of the Power Company had
contained a restriction on unsecured indebtedness as a percentage of
capitalization. By separate votes of the Dividend Series Preferred Stock
and of those stocks (the Common and 6% Preferred) having general voting
rights on December 12, 1997, these provisions have been removed. (See HCAR
No. 26774, File No. 70-9143.)
Based upon and subject to the foregoing and appropriate action by the
Securities and Exchange Commission under the Public Utility Holding Company
Act of 1935, it is our opinion that, in the event the proposed transactions
are consummated in accordance with the Statement on Form U-1, as amended:
(a) All state laws applicable to the proposed transactions will be
complied with;
(b) NEP is validly organized and duly existing; and any notes
representing its borrowings, when duly executed and delivered
and when the consideration therefor has been received, will be
valid and binding obligations of NEP in accordance with the
terms of the notes, subject to laws of general application
affecting the rights and remedies of creditors;
(c) Each of the Participating Companies will legally acquire the
appropriate interest in any borrowing by other members of the
Pool; and
(d) The consummation of the proposed transactions will not violate
the legal rights of the holders of any securities issued by NEP,
or any associate company thereof.
We hereby consent to the use of this opinion in connection with the
Statement of Form U-1, as amended, filed with your commission with reference
to the proposed transactions.
Very truly yours,
/s/ Robert King Wulff
Robert King Wulff
Corporation Counsel
/s/ Kirk L. Ramsauer
Kirk L. Ramsauer
Associate General Counsel
