FILE NO. 70-9755
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
AMENDMENT NO. 3
TO
FORM U-1
APPLICATION/DECLARATION
UNDER
THE PUBLIC UTILITY HOLDING COMPANY ACT OF 1935
Northeast Utilities Holyoke Water Power Company
Western Massachusetts Electric Company Canal Street
The Quinnehtuk Company Holyoke, MA 01040
174 Brush Hill Avenue
West Springfield, MA 01090-0010
The Connecticut Light and Power Company Public Service Company
NU Enterprises, Inc. of New Hampshire
Northeast Generation Service Company North Atlantic Energy
Northeast Generation Company Corporation
Select Energy, Inc. 1000 Elm Street
Mode 1 Communications, Inc. Manchester, NH 03015
Northeast Nuclear Energy Company
The Rocky River Realty Company
Yankee Energy System, Inc.
107 Selden Street
Berlin, CT 06037
Yankee Energy Services Company HEC Inc.
148 Norton St. 24 Prime Parkway
Milldale CT 06467 Natick, MA 01760
Yankee Gas Services Company R.M. Services, Inc.
Yankee Energy Financial Services Company 639 Research Parkway
NorConn Properties, Inc. Meriden, CT 06467
599 Research Parkway
Meriden, Connecticut 06450
(Name of companies filing this statement and addresses of principal executive
offices)
NORTHEAST UTILITIES
(Name of top registered holding company)
Cheryl W. Grise, Esq.
Senior Vice President, Secretary and General Counsel
Northeast Utilities Service Company
P.O. Box 270
Hartford, CT 06141-0270
(Name and address of agent for service)
The Commission is requested to mail signed copies of all orders, notices and
communications to
Jeffrey C. Miller David R. McHale
Assistant General Counsel Vice President and Treasurer
Northeast Utilities Northeast Utilities
Service Company Service Company
P.O. Box 270 P.O. Box 270
Hartford, CT 06141-0270 Hartford, CT 06141-0270
A. Paragraph 23 through 25 is deleted and replaced with the following
paragraphs 23-29 and paragraphs 26 and 27 are renumbered accordingly:
"23. Other Matters
Except in accordance with the Act, neither NU nor any subsidiary thereof
(a) has acquired an ownership interest in an exempt wholesale generator
("EWG") or a foreign utility company ("FUCO") as defined in Sections 32 and
33 of the Act, or (b) now is or as a consequence of the transactions proposed
herein will become a party to, or has or will as a consequence of the
transactions proposed herein have a right under, a service, sales, or
construction contract with an EWG or a FUCO. None of the proceeds from the
transactions proposed herein will be used by NU and its subsidiaries to
acquire any securities of, or any interest in, an EWG or a FUCO.
24. NU currently meets all of the conditions of Rule 53(a),except for
clause (1). At September 30, 2000, NU's "aggregate investment," as defined
in Rule 53(a)(1), in EWGs and FUCOs was approximately $469.5 million, or
approximately 74 % of NU's average "consolidated retained earnings," also as
defined in Rule 53(a)(1), for the four quarters ended September 30, 2000
($638.8 million). With respect to Rule 53(a)(1), however, the Commission has
determined that NU's financing of its investment in Northeast Generation
Company ("NGC"), NU's only current EWG or FUCO, in an amount not to exceed
$481 million or 83% of its "average consolidated retained earnings" would not
have either of the adverse effects set forth in Rule 53(c). See Northeast
Utilities, Holding Company Act Release No. 27148, dated March 7, 2000 (the
"Rule 53(c) Order"). NU continues to assert that its EWG investment in NGC
will not adversely affect the System.
25. In addition, NU and its subsidiaries are in compliance and will continue
to comply with the other provisions of Rule 53(a) and (b), as demonstrated by
the following determinations:
(i) NGC maintains books and records, and prepares financial statements in
accordance with Rule 53(a)(2). Furthermore, NU has undertaken to provide the
Commission access to such books and records and financial statements, as it
may request;
(ii) No employees of NU's public utility subsidiaries have rendered services
to NGC;
(iii) NU has submitted (a) a copy of each Form U-1 and Rule 24 certificate
that has been filed with the Commission under Rule 53 and (b) a copy of Item
9 of the Form U5S and Exhibits G and H thereof to each state regulator having
jurisdiction over the retail rates of NU's public utility subsidiaries;
(iv) Neither NU nor any subsidiary has been the subject of a bankruptcy or
similar proceeding unless a plan of reorganization has been confirmed in such
proceeding;
(v) NU's average CREs for the four most recent quarterly periods have not
decreased by 10% or more from the average for the previous four quarterly
periods; and
(vi) In the previous fiscal year, NU did not report operating losses
attributable to its investment in EWGs/FUCOs exceeding 3 percent of NU's
consolidated retained earnings.
26. The proposed transactions, considered in conjunction with the effect of
the capitalization and earnings of NU's EWGs and FUCOs, would not have a
material adverse effect on the financial integrity of the NU system, or an
adverse impact on NU's public-utility subsidiaries, their customers, or the
ability of State commissions to protect such public-utility customers.
27. The Rule 53(c) Order was predicated, in part, upon an assessment of NU's
overall financial condition which took into account, among other factors,
NU's consolidated capitalization ratio and its retained earnings, both of
which have improved since the date of the order. NU's EWG investment (it has
no FUCO investment) has been profitable for the periods beginning March 7,
2000 and ending March 31, 2000, June 30, 2000 and September 30, 2000
respectively. As of December 31, 1999, the most recent period for which
financial statement information was evaluated in the Rule 53(c) Order, NU's
consolidated capitalization consisted of 35.3% common equity and 64.7% debt
(including long and short-term debt, preferred stock, capital leases and
guarantees). As of June 30, 2000, the end of the first quarter after the
issuance of the Rule 53(c) Order, the consolidated capitalization ratios of
NU, with consolidated debt including all short-term debt and non-recourse
debt of the EWG was as follows:
As of June 30, 2000
(thousands
of dollars) %
Common shareholders' equity 2,365,854 36.9
Preferred stock 277,700 4.3
Long-term and short-term debt 3,768,353 58.8
6,411,907 100.0
28. The consolidated capitalization ratios of NU as of September 30, 2000,
with consolidated debt including all short-term debt and non-recourse debt of
the EWG was as follows:
As of September 30, 2000
(thousands
of dollars) %
Common shareholders' equity 2,413,785 37.9
Preferred stock 277,700 4.3
Long-term and short-term debt 3,683,667 57.8
6,375,152 100.0
29. NU's consolidated retained earnings have increased from $582 million as
of December 31, 1999 to $691 million as of September 30, 2000. NU's interest
in NGC (its only EWG or FUCO) has made a positive contribution to earnings in
that time by contributing $15 million to NU's retained earnings with revenues
of $75.5 million and net income of $15.7 million. Accordingly, since the
date of the Rule 53(c) Order, the capitalization and earnings attributable to
NU's investments in EWGs and FUCOs has not had an adverse impact on NU's
financial integrity."
SIGNATURE
Pursuant to the requirements of the Public Utility Holding Company Act
of 1935, the Applicants have duly caused this Application-Declaration to be
signed on their behalf by the undersigned thereunto duly authorized.
Northeast Utilities
The Connecticut Light and Power Company
Western Massachusetts Electric Company
Public Service Company of New Hampshire
Holyoke Water Power Company
Northeast Nuclear Energy Company
North Atlantic Energy Corporation
The Rocky River Realty Company
The Quinnehtuk Company
NU Enterprises, Inc.
Northeast Generation Company
Northeast Generation Service Company
Select Energy, Inc.
Mode 1 Communications, Inc.
HEC Inc.
Yankee Energy System, Inc.
Yankee Gas Services, Inc.
Yankee Financial Services, Inc.
Yankee Energy Services Company
NorConn Properties, Inc.
R.M. Services, Inc.
By: /s/ Randy A. Shoop
Title: Assistant Treasurer-Finance
Northeast Utilities Service Company as Agent for
all of the above named companies
