FILE NO. 70-8875
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
POST-EFFECTIVE AMENDMENT NO. 7
(AMENDMENT NO. 9)
TO
FORM U-1
APPLICATION/DECLARATION WITH RESPECT TO (1) PROPOSED REVOLVING CREDIT
FACILITY FOR NORTHEAST UTILITIES ("NU"), THE CONNECTICUT LIGHT AND POWER
COMPANY ("CL&P") AND WESTERN MASSACHUSETTTS ELECTRIC COMPANY ("WMECO") AND
(2) INCREASES AND EXTENSIONS OF SHORT-TERM BORROWING LIMITS OF NU, CL&P,
WMECO, PUBLIC SERVICE COMPANY OF NEW HAMPSHIRE, HOLYOKE WATER POWER COMPANY
AND NORTH ATLANTIC ENERGY CORPORATION
UNDER
THE PUBLIC UTILITY HOLDING COMPANY ACT OF 1935
Northeast Utilities The Connecticut Light
Western Massachusetts Electric Company and Power Company
174 Brush Hill Avenue 107 Selden Street
West Springfield, MA 01090-0010 Berlin, CT 06037
Holyoke Water Power Company Public Service Company of New Hampshire
Canal Street North Atlantic Energy Corporation
Holyoke, MA 01040 1000 Elm Street
Manchester, NH 03015
(Name of companies filing this statement and addresses of principal executive
offices)
NORTHEAST UTILITIES
(Name of top registered holding company)
Robert P. Wax, Esq.
Vice President, Secretary and General Counsel
Northeast Utilities Service Company
107 Selden Street
Berlin, CT 06037
(Name and address of agent for service)
The Commission is requested to mail signed copies of all orders, notices and
communications to:
Jeffrey C. Miller, Esq. David R. McHale
Assistant General Counsel Assistant Treasurer - Finance
Northeast Utilities Service Company Northeast Utilities Service Company
107 Selden Street 107 Selden Street
Berlin, CT 06037 Berlin, CT 06037
Richard C. MacKenzie, Esq.
Day, Berry & Howard
CityPlace I
Hartford, CT 06103-3499
BACKGROUND
1. By Order dated November 20, 1996 (HCAR No. 35-26612), Supplemental Order
dated February 11, 1997 (HCAR No. 35-26665), Supplemental Order dated March
25, 1997 (HCAR No. 35-26692) and Supplemental Order dated May 29, 1997 (HCAR
35-26721) in this File No. 70-8875 (collectively, the "Orders"), the
Commission, among other things, authorized Northeast Utilities ("NU"), The
Connecticut Light and Power Company ("CL&P"), Western Massachusetts Company
("WMECO") and Public Service Company of New Hampshire ("PSNH") to issue
short-term notes from time to time through December 31, 2000 pursuant to
formal and informal lines of credit. Pursuant to the Orders, each borrower
has its own maximum outstanding borrowing limit which, in the case of NU, is
$150 million.
2. Primarily because of the financial impact of the increased costs
associated with the current nuclear outages on the NU system and other
difficulties related to the Millstone nuclear generating units), NU is
currently unable to borrow under the existing revolving credit facility
("Existing Revolver") which was entered into pursuant to the Orders.
Reference is made to Exhibit B.4(a) in this file. In accordance with the
authority granted by the Orders relating to the issuance of short-term debt,
NU is negotiating with a lender to enter into a supplementary revolving
credit facility in the aggregate principal amount of up to $25 million which
would have less restrictive terms and conditions than the Existing Revolver.
Advances from this credit facility will be used to meet NU's debt service
requirements under its ESOP and to support its other financial requirements
until such time as NU begins to receive dividends from its subsidiaries
again. The purpose of this Amendment is to seek authorization to increase
the interest rate applicable to short-term borrowings by NU to an amount not
to exceed the greater of (i) four percentage points over the LIBOR rate and
(ii) three percentage points over the lender's base rate. The current
maximum interest rate under the Orders is two percentage points above the
Federal Funds Effective Rate, and the bank with whom NU is negotiating has
sought an interest rate which could exceed the cap specified in the Orders.
3. The Orders also authorize the payment of fees by NU pursuant to formal
and informal credit lines in an amount not to exceed 0.30% per annum. NU is
hereby filing this Amendment to obtain authorization to increase the maximum
annual fee payment to an amount not to exceed 1.00% per annum.
AMENDMENTS TO THE APPLICATION
To reflect the foregoing, the Application/Declaration in this proceeding
is further amended as follows:
4. The second sentence of paragraph 23 is deleted and replaced with the
following to take into account the proposed increase in interest payments by
NU under the supplemental revolving credit facility:
"The interest rate in any case will not exceed two percentage points
above the Federal Funds Effective Rate, except that in the case of
short-term notes issued by NU, the interest rate will not exceed the
higher of four percentage points over the LIBOR rate and three
percentage points over the Lender's base rate."
5. The third sentence of paragraph 25 is deleted and replaced with the
following to take into account the proposed increase in annual fees to be
paid by NU:
"Compensating balance requirements will not exceed 5% of the committed
line amount, and fees will not exceed 30 basis points per annum, except
that in the case of short-term notes issued by NU, fees will not exceed
100 basis points per annum."
6. The following additional exhibits and financial statements are filed
herewith:
(a) Exhibits
*F.3 Opinion of Counsel
G.2 Financial Data Schedule for NU (parent company only)
* To be filed by further post-effective amendment
(b) Financial Statements
1. Northeast Utilities
1.1 Balance Sheet, per books and pro forma, as of September 30, 1997.
1.2 Statement of Income, per books and pro forma, for 12 months ended
September 30, 1997 and Capital Structure, per books and pro forma, as of
September 30, 1997.
SIGNATURES
Pursuant to the requirements of the Public Utility Holding Company Act
of 1935, as amended, the undersigned have duly caused this Amendment to be
signed on behalf of each of them by the undersigned thereunto duly
authorized.
Date: November 20, 1997
NORTHEAST UTILITIES
THE CONNECTICUT LIGHT AND POWER COMPANY
WESTERN MASSACHUSETTS ELECTRIC COMPANY
PUBLIC SERVICE COMPANY OF NEW HAMPSHIRE
HOLYOKE WATER POWER COMPANY
NORTH ATLANTIC ENERGY CORPORATION
By: /s/ David R. McHale
----------------------
David R. McHale
Assistant Treasurer - Finance
<TABLE> <S> <C>
<ARTICLE> OPUR1
<MULTIPLIER>1000
<FISCAL-YEAR-END> SEP-30-1997 SEP-30-1997
<PERIOD-END> SEP-30-1997 SEP-30-1997
<PERIOD-TYPE> YEAR YEAR
<BOOK-VALUE> PER-BOOK PRO-FORMA
<TOTAL-NET-UTILITY-PLANT> 0 0
<OTHER-PROPERTY-AND-INVEST> 2,345,372 2,345,372
<TOTAL-CURRENT-ASSETS> 31,650 56,275
<TOTAL-DEFERRED-CHARGES> 2,487 2,487
<OTHER-ASSETS> 0 0
<TOTAL-ASSETS> 2,379,509 2,404,134
<COMMON> 684,003 684,003
<CAPITAL-SURPLUS-PAID-IN> 933,080 933,080
<RETAINED-EARNINGS> 701,707 699,762
<TOTAL-COMMON-STOCKHOLDERS-EQ> 2,161,284 2,159,339
0 0
0 0
<LONG-TERM-DEBT-NET> 188,000 188,000
<SHORT-TERM-NOTES> 0 25,000
<LONG-TERM-NOTES-PAYABLE> 0 0
<COMMERCIAL-PAPER-OBLIGATIONS> 0 0
<LONG-TERM-DEBT-CURRENT-PORT> 16,000 16,000
0 0
<CAPITAL-LEASE-OBLIGATIONS> 0 0
<LEASES-CURRENT> 0 0
<OTHER-ITEMS-CAPITAL-AND-LIAB> 14,225 15,795
<TOT-CAPITALIZATION-AND-LIAB> 2,379,509 2,404,134
<GROSS-OPERATING-REVENUE> 0 0
<INCOME-TAX-EXPENSE> (10,834) (11,679)
<OTHER-OPERATING-EXPENSES> 9,852 10,227
<TOTAL-OPERATING-EXPENSES> (982) (1,452)
<OPERATING-INCOME-LOSS> 982 1,452
<OTHER-INCOME-NET> (156,315) (156,315)
<INCOME-BEFORE-INTEREST-EXPEN> (155,333) (154,863)
<TOTAL-INTEREST-EXPENSE> 19,717 22,132
<NET-INCOME> (175,050) (176,995)
0 0
<EARNINGS-AVAILABLE-FOR-COMM> (175,050) (176,995)
<COMMON-STOCK-DIVIDENDS> 64,210 64,210
<TOTAL-INTEREST-ON-BONDS> 17,910 17,910
<CASH-FLOW-OPERATIONS> 0 0
<EPS-PRIMARY> (1.36) (1.37)
<EPS-DILUTED> (1.36) (1.37)
</TABLE>
NORTHEAST UTILITIES (PARENT)
BALANCE SHEET
AS OF SEPTEMBER 30, 1997
(THOUSANDS OF DOLLARS)
FINANCIAL STATEMENT 1.1 PAGE 1 OF 2
PRO FORMA
GIVING EFFECT
PRO FORMA TO PROPOSED
PER BOOK ADJUSTMENTS* TRANSACTION
ASSETS
OTHER PROPERTY AND INVESTMENTS:
INVESTMENTS IN SUB. CO'S
AT EQUITY $2,323,774 $2,323,774
INVESTMENTS IN TRANSMISSION
COMPANIES, AT EQUITY 21,191 21,191
OTHER, AT COST 407 407
----------- ------------ ------------
TOTAL OTHER PROPERTY &
INVESTMENTS 2,345,372 0 2,345,372
CURRENT ASSETS:
CASH AND SPECIAL DEPOSITS 10 24,625(a) 24,635
NOTES REC. FROM AFF. CO'S 29,900 29,900
NOTES AND ACCOUNTS REC. 699 699
ACCOUNTS REC. FROM AFF. CO'S 641 641
PREPAYMENTS 400 400
----------- ------------ ------------
TOTAL CURRENT ASSETS 31,650 24,625 56,275
----------- ------------ ------------
DEFERRED CHARGES:
ACCUMULATED DEF.INCOME TAXES 2,173 2,173
UNAMORTIZED DEBT EXPENSE 267 267
OTHER 47 47
----------- ------------ ------------
TOTAL DEFERRED CHARGES 2,487 0 2,487
----------- ------------ ------------
TOTAL ASSETS $2,379,509 $24,625 $2,404,134
*EXPLANATION AT FINANCIAL STATEMENT 1.2 PAGE 3 OF 3
NORTHEAST UTILITIES (PARENT)
BALANCE SHEET
AS OF SEPTEMBER 30, 1997
(THOUSANDS OF DOLLARS)
FINANCIAL STATEMENT 1.1 PAGE 2 OF 2
PRO FORMA
GIVING EFFECT
PRO FORMA TO PROPOSED
PER BOOK ADJUSTMENTS* TRANSACTION
CAPITALIZATION AND LIABILITIES
CAPITALIZATION:
COMMON SHARES $684,003 $684,003
CAPITAL SURPLUS, PAID IN 933,080 933,080
DEF. BENEFIT PLAN - ESOP (157,506) (157,506)
RETAINED EARNINGS 701,707 (1,945) 699,762
----------- ------------ --------------
TOTAL COMMON STOCKHOLDER'S
EQUITY 2,161,284 (1,945) 2,159,339
LONG-TERM DEBT,NET 188,000 188,000
----------- ------------ ---------------
TOTAL CAPITALIZATION 2,349,284 (1,945) 2,347,339
CURRENT LIABILITIES:
NOTES PAYABLE TO BANK 0 25,000 (a) 25,000
ACCOUNTS PAYABLE 1,939 1,939
ACCOUNTS PAYABLE TO AFF. CO' 516 516
CURR. POR. OF LONG-TERM DEBT 16,000 16,000
ACCRUED INTEREST 4,840 2,415 (b) 7,255
ACCRUED TAXES 6,356 (845)(c) 5,511
OTHER 130 130
------------ ------------ --------------
TOTAL CURRENT LIABILITIES 29,781 26,570 56,351
DEFERRED CREDITS:
OTHER 444 444
----------- ------------- ---------------
TOTAL DEFERRED CREDITS 444 0 444
----------- ------------- ---------------
TOTAL CAPITALIZATION AND
LIABILITIES $2,379,509 $24,625 $2,404,134
*EXPLANATION AT FINANCIAL STATEMENT 1.2 PAGE 3 OF 3
NORTHEAST UTILITIES (PARENT)
INCOME STATEMENT
FOR 12 MONTHS ENDED SEPTEMBER 30, 1997
(THOUSANDS OF DOLLARS)
FINANCIAL STATEMENT 1.2 PAGE 1 OF 3
PRO FORMA
GIVING EFFECT
PRO FORMA TO PROPOSED
PER BOOK ADJUSTMENTS* TRANSACTION
OPERATING REVENUE $0 $0 $0
----------- -------------- -------------
OPERATING EXPENSES:
OPERATION EXPENSE 9,788 375(a) 10,163
FED. AND STATE INCOME TAXES (10,834) (845)(c) (11,679)
TAXES OTHER THAN INCOME TAXES 64 64
----------- -------------- -------------
TOTAL OPERATING EXPENSES (982) (470) (1,452)
----------- -------------- -------------
OPERATING INCOME 982 470 1,452
----------- -------------- -------------
OTHER INCOME (LOSS):
EQUITY IN EARNINGS OF SUBS. (161,118) (161,118)
EQUITY IN EARNINGS OF
TRANSMISSION COMPANIES 3,019 3,019
OTHER, NET 1,784 1,784
------------ ------------- -------------
OTHER LOSS, NET (156,315) 0 (156,315)
------------ ------------- --------------
LOSS BEFORE INTEREST CHARGES (155,333) 470 (154,863)
------------ ------------- --------------
INTEREST CHARGES:
INTEREST ON LONG-TERM DEBT 17,910 17,910
OTHER INTEREST 1,807 2,415 (b) 4,222
------------ ------------- --------------
TOTAL INTEREST CHARGES 19,717 2,415 22,132
------------ ------------- --------------
NET INCOME (175,050) (1,945) (176,995)
------------ ------------- --------------
EARNINGS FOR COMMON SHARES (175,050) (1,945) (176,995)
EARNINGS PER COMMON SHARE -1.36 -1.37
COMMON SHARES OUTSTANDING
(AVERAGE) 129,122,239 129,122,239
*EXPLANATION AT FINANCIAL STATEMENT 1.2 PAGE 3 OF 3
NORTHEAST UTILITIES (PARENT)
CAPITAL STRUCTURE AS OF SEPTEMBER 30, 1997
(THOUSANDS OF DOLLARS)
FINANCIAL STATEMENT 1.2.1 PAGE 2 OF 3
PER BOOK
ADJUSTED TO
PRO FORMA REFLECT
% PER BOOK ADJUSTMENT PRO FORMA %
DEBT:
LONG-TERM DEBT $204,000 $204,000
---------- ----------- -----------
TOTAL DEBT 8.6% 204,000 204,000 8.6%
COMMON EQUITY:
COMMON SHARES 684,003 684,003
CAPITAL SURPLUS, PAID IN 933,080 933,080
DEFERRED BENEFIT PLAN
-ESOP (157,506) (157,506)
RETAINED EARNINGS 701,707 (1,945) 699,762
----------- ----------- ------------
TOTAL COMMON STOCKHOLDER'S
EQUITY 91.4% 2,161,284 (1,945) 2,159,339 91.4%
------------ ----------- ------------
TOTAL CAPITAL 100.0% $2,365,284 (1,945) $2,363,339 100.0%
EXPLANATION OF ADJUSTMENTS
(THOUSANDS OF DOLLARS)
FINANCIAL STATEMENT 1.2 PAGE 3 OF 3
DEBIT CREDIT
(a) CASH $24,625
OPERATION EXPENSE 375
NOTES PAYABLE TO BANK $25,000
To record the borrowing of up to the entire $25 million available to the
company under the additional facility and related structuring fees.
(b) OTHER INTEREST EXPENSE 2,415
ACCRUED INTEREST 2,415
To record interest expense on the additional proposed borrowing at LIBOR as
of 1/10/97 [5.66%] + 4.00%
$25,000 x 9.66% = 2,415
(c) ACCRUED TAXES 845
FEDERAL AND STATE INCOME TAX EXPENSE 845
To record the reduction in income taxes due to the higher interest expense:
$2,415 x 35.00% = 845
