As filed with the Securities and Exchange Commission on May 24, 2000
File No. 70-9621
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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AMENDMENT NO. 1
TO
FORM U-1 APPLICATION OR DECLARATION
UNDER
THE PUBLIC UTILITY HOLDING COMPANY ACT OF 1935
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Sierra Pacific Resources
6100 Neil Road
Reno, Nevada 89511
(Name of company or companies filing this statement
and address of principal executive offices)
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Michael R. Niggli
Chairman and Chief
Executive Officer
Sierra Pacific Resources
6100 Neil Road
Reno, Nevada 89511
(702) 834-3600
(Name and addresses of agents for service)
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TheCommission is requested to send copies of all
notices, orders and communications in connection
with this Application to:
Clifford (Mike) M. Naeve, Esq.
Paul Silverman, Esq.
William C. Weeden
Skadden, Arps, Slate,
Meagher & Flom LLP
1440 New York Avenue, N.W.
Washington, D.C. 20005
<PAGE>
Sierra Pacific Resources hereby amends and restates its application as
follows:
Item 1. Description of Proposed Transaction
A. Introduction and General Request
1. General
Sierra Pacific Resources, a Nevada corporation exempt from
registration by order under Section 3(a)(1) of the Public Utility Holding
Company Act of 1935, as amended (the "Act")("Sierra Pacific"), filed an
Application/Declaration on Form U-1 (File No. 70-9619) (the "Merger U-1") with
the Securities and Exchange Commission (the "Commission") under Sections 9(a)(2)
and 10 seeking approvals relating to the proposed acquisition by Sierra Pacific
of Portland General Electric Company, a Oregon corporation ("PGE"), under which
PGE will become a wholly owned subsidiary of Sierra Pacific (the "Merger").
Sierra Pacific will register as a holding company under the Act upon the
consummation of the acquisition contemplated in the Merger U-1.
2. General Request
This Application/Declaration seeks the authorization and approval by
the Commission with respect to the provision of intra-system services following
the Merger and registration of Sierra Pacific as a holding company.
Specifically, Sierra Pacific requests that the Commission approve the
designation of Sierra Pacific Resource Services Company ("SPRSC") as a
subsidiary service company in accordance with the provisions of Rule 88 under
the Act and the Services Agreement (as defined below) and find that SPRSC is so
organized and will conduct its operations so as to meet the requirements of
Section 13 of the Act and the Commission's rules under the Act.
B. Description of the Parties to the Transaction
Following the consummation of the Merger, Sierra Pacific will have
three operating public utility company subsidiaries (the "Utility
Subsidiaries"): Sierra Pacific Power Company ("SPPC"), a public utility company
that provides retail electric service in Nevada and northeastern California,
sells electric power at wholesale, distributes natural gas at retail in
northwestern Nevada, and provides water service; Nevada Power Company ("Nevada
Power"), a public utility company that provides retail electric service
predominantly to the residents of Clark County, Nevada, provides limited service
to the Federal Department of Energy (U.S. Government Test Site) in Nye County,
Nevada, and sells electric power at wholesale; and PGE, a public utility
company, which provides electric power service in northwestern Oregon and sells
electric power at wholesale. A list of Sierra Pacific's other subsidiaries is
set forth in the Merger U-1 and the exhibits thereto. Sierra Pacific's direct
and indirect utility and non-utility subsidiaries following the Merger are
referred to in this Application individually as a "Subsidiary" and collectively
as "Subsidiaries."
SPRSC, a subsidiary service company, will enter into a services
agreement (the "Services Agreement") with each of the Subsidiaries. (A copy of
the form of the Services Agreement as well as an appendix entitled "Service
Company Policy and Procedures" are filed as Exhibits B-1 and B-2, respectively.)
Following the Merger, SPRSC will provide the Subsidiaries with a variety of
administrative, management, environmental and support services, either directly
or through agreements with associate or non-associate companies, as needed.
Prior to the consummation of the Merger, SPRSC will be incorporated in the State
of Nevada to serve as the service company for the Sierra Pacific system.
The authorized capital stock of SPRSC will consist of 100 shares of
common stock, no par value per share, issued to Sierra Pacific for $1,000. Upon
consummation of the Merger, all issued and outstanding shares of SPRSC common
stock will be held by Sierra Pacific. Sierra Pacific will describe any debt
financing for SPRSC in a separate application/declaration to be filed with the
Commission dealing with the financing of the post-Merger Sierra Pacific holding
company system.
C. Intra-system Provision of Services
1. Service Company
In order to ensure adequate oversight and realize economies of scale,
certain administrative and service functions for the Sierra Pacific system will
be consolidated and provided through SPRSC. As a general rule, the individual
system companies will maintain services that can benefit from individualized
application at the company level, with SPRSC offering system-wide coordination
and strategy, oversight and other services where economies can be captured by
the centralization of services. In particular, it is anticipated that, subject
to the requirements or limitations of state and federal law, the following
classes of services may be offered by SPRSC, through departments that will be
established following its formation and that may offer more than one class of
services, to system companies:
a. Accounting
Accounting services will include the maintaining the books and records
of Sierra Pacific and its affected affiliates, the preparation of financial and
statistical reports, and tax filings, and the supervision of compliance with the
applicable laws and regulations. Accounting services also include support of
accounting systems.
b. Administration Support
Administrative support encompasses mailroom, records management,
graphics, and other general administrative and support activities.
c. Community And Economic Development
These services involve the provision of community support and
economic development services to the service territories of the Utility
Subsidiaries.
d. Corporate Communications
Corporate communications involves the preparation and
dissemination of information to employees, customers, government agencies,
communities and the media.
e. Corporate Planning
The corporate planning services facilitate preparation of strategic
plans, monitor trends, and evaluate business opportunities. They also involve
facilitating process improvements and preparation of budgets and financial
forecasts.
f. Custom Account Sales
Custom account sales personnel provide sales services to large
commercial and industrial customers of the Utility Subsidiaries.
g. Customer Services
Customer services personnel perform customer billing, perform meter
services, handle customer inquiries, remittance processing and complaints, and
provide related customer information services.
h. Design Engineering
Design engineering services involve the design and monitoring of
construction of electric transmission and distribution lines and substations.
i. Business Support Services
Business support services involve the provision of planning,
benchmarking, activity tracking and budget support services to the Utility
Subsidiaries.
j. Bulk Power Transport
This service encompasses supervision and coordination of the electric
transmission system control operations for the Utility Subsidiaries.
k. Environmental
Environmental services focus on establishing of policies and
procedures for compliance with environmental laws and regulations, research on
emerging environmental issues, and monitoring compliance with environmental
requirements. Environmental services personnel also conduct oversight of
environmental clean up projects.
l. Executives
Executive services encompass executive management and general
administrative services.
<PAGE>
m. Facilities and Real Estate
Facilities and real estate services personnel operate and maintain
office buildings and service centers. They procure real estate, office furniture
and equipment, and administer real estate leases, as well as contracts to
provide security, housekeeping and maintenance services for Sierra Pacific
system facilities.
n. Finance and Treasury
Finance and treasury services involve coordination of activities
related to securities issuance, including maintaining relationships with
financial institutions, cash management, investing activities and monitoring
capital markets. Finance and treasury service personnel also perform financial
and economic analysis and administer the insurance program.
o. Governmental Affairs
Governmental affairs personnel lobby government officials and monitor,
review, and research legislation.
p. Human Resources
Human resources services involve establishment and administration of
policies and supervision of compliance with legal requirements in the areas of
employment, compensation, benefits and employee health, welfare, and safety.
They also include processing of payroll and employee benefit payments, and the
coordination of contract negotiation and relations with labor unions.
q. Information Systems
Information systems personnel plan, design, engineer, install,
operate, and maintain voice and data networks.
r. Internal Audit
Internal audit personnel review internal controls and procedures to
ensure assets are safeguarded and transactions are properly authorized and
recorded. They also evaluate contract risks. s. Legal
Legal services personnel provide legal services related to labor and
employment law, litigation, contracts, rates and regulation, environmental
matters, real estate and other legal matters.
t. Marketing Services
Marketing services include market load research and new product
development for the Utility Subsidiaries and affiliates.
u. Payment and Reporting
Payment and reporting personnel processes payments to vendors of
Sierra Pacific and its Subsidiaries and prepare statistical reports.
v. Purchased Power and Electric Trading
The purchased power and electric trading service function involves the
purchase of electric power for and the provision of electric trading services to
the electric generation systems of the Utility Subsidiaries, including risk
management, weather risk, and contract management.
w. Rates and Regulation
Rates and regulation services encompass the determination of revenue
requirements for the Utility Subsidiaries and rates for electric, gas, and water
customers. Rates and regulation services personnel coordinate regulatory
compliance requirements and maintain relationships with regulatory authorities.
x. Residential and Business Sales
Residential and business sales personnel provide sales and support to
electric residential and business customers of the Utility Subsidiaries.
<PAGE>
y. Resource Acquisition and Analysis
These services involve management of fuels for the generation
facilities of the Utility Subsidiaries. Resource acquisition and analysis
personnel ensure compliance with price and quality provisions of fuel contracts
and arrange for transportation of fuel to the desired location.
z. Shareholder Relations
Shareholder relations personnel provide communications to investors
and the financial community. They also coordinate the transfer agent and
shareholder record-keeping functions.
aa. Substation Engineering and Support
This service function involves the provision of management support
services to the substation engineering and support organizations of the Utility
Subsidiaries.
bb. Supply Chain
Supply chain services involve functions connected with the procurement
of materials, including the management of materials and supplies inventories.
cc. Transmission Support Services
These services involve provision of management support services to the
transmission construction, maintenance, operations, and engineering and right of
way organizations of the Utility Subsidiaries.
dd. Transportation
Transportation services personnel oversee the vehicle fleets of the
Utility Subsidiaries.
<PAGE>
ee. Wholesale and Bulk Power Sales
These services involve provision of sales and to support to electric
wholesale customers of the Utility Subsidiaries.
ff. Generation Support Services
Generation services involve the provision of management, drafting, and
engineering services for all power plants, unit commitment and maintenance
scheduling, and centralized maintenance crews that serve power plants, as well
as technology evaluation.
As compensation for services, the Services Agreement will provide that
the client companies "pay to SPRSC the cost of such services, computed in
accordance with the applicable rules and regulations (including, but not limited
to Rules 90 and 91) under the Act and appropriate accounting standards." Where
more than one company is involved in or has received benefits from a service
performed, the Services Agreement will provide that client companies will pay
their fairly allocated pro rata share in accordance with the methods set out in
a schedule to the Services Agreement. Thus, charges for all services provided by
SPRSC to affiliated utility companies and non-utility companies will be on an
"at cost" basis as determined under Rules 90 and 91 under the Act.
No change in the organization of SPRSC, the type and character of the
companies to be serviced, the methods of allocating cost to associate companies,
or in the scope or character of the services to be rendered subject to Section
13 of the Act, or any rule, regulation or order thereunder, shall be made unless
and until SPRSC shall first have given the commission written notice of the
proposed change not less than 60 days prior to the proposed effectiveness of any
such change. If, upon the receipt of any such notice, the Commission shall
notify SPRSC within the 60-day period that a question exists as to whether the
proposed change is consistent with the provisions of Section 13 of the Act, or
of any rule, regulation or order thereunder, then the proposed change shall not
become effective unless and until SPRSC shall have filed with the Commission an
appropriate declaration regarding such proposed change and the Commission shall
have permitted such declaration to become effective.
Sierra Pacific will structure the Services Agreement so as to comply
with Section 13 of the Act and the Commission's rules and regulations
thereunder.
Rule 88 (b) provides that "(a) finding by the commission that a
subsidiary company of a registered holding company . . . is so organized and
conducted, or is to be so conducted, as to meet the requirements of Section
13(b) of the Act with respect to reasonable assurance of efficient and
economical performance of services or construction or sale of goods for the
benefit of associate companies, at cost fairly and equitably allocated among
them (or as permitted by [Rule 90], will be made only pursuant to a declaration
filed with the Commission on Form U-13-1, as specified in the instructions for
that form, by such company or the persons proposing to organize it."
Notwithstanding the foregoing language, the Commission has on at least two
recent occasions made findings under Section 13(b) based on information set
forth in an application on Form U-1, without requiring the formal filing on a
Form U-13-1. See Unitil Corp., 51 SEC Docket 562 (Apr. 24, 1992); CINergy Corp.,
57 SEC Docket 2353 (Oct. 21, 1994). In this Application, Sierra Pacific has
submitted substantially the same application information as would have been
submitted in a Form U-13-1.
Accordingly, it is submitted that it is appropriate to find that SPRSC
will be so organized and shall be so conducted as to meet the requirements of
Section 13(b), and that the filing of a Form U-13-1 is unnecessary, or,
alternatively, that this Application should be deemed to constitute a filing on
Form U-13-1 for purposes of Rule 88.
2. Other Services
Sierra Pacific requests authorization for the Subsidiaries to enter,
from time to time, into leases of office or other space with other associate
companies. Any such lease will comply with the requirements of Rules 87, 90 and
91. See Central Power & Light Company, Holding Co. Act Release No. 26408 (Nov.
13, 1995).
The Utility Subsidiaries may also provide to one another such
services, construction or goods as are reasonably required by the Utility
Subsidiary receiving the services, construction or goods to meet a breakdown or
other emergency under circumstances in which the parties believe in good faith
that, under conditions then existing, such transaction(s) will be to the
advantage of the Utility Subsidiary receiving the services, construction or
goods. All such transactions will be undertaken at cost in accordance with the
standards of the Act and Rules 87, 90 and 91 under the Act.
Item 2. Fees, Commissions and Expenses
Estimated Legal Fees and Expenses $ **
Estimated Miscellaneous Expenses $ **
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Total $ **
** To be filed by amendment.
Item 3. Applicable Statutory Provisions
Section 13 of the Act and Rules 88, 90 and 91 are considered
applicable to the proposed transactions.
To the extent that the proposed transactions are considered by the
Commission to required authorization, exemption or approval under any section of
the Act or the rules and regulations other than those set forth above, request
for such authorization, exemption or approval is hereby made.
Item 4. Regulatory Approvals
SPPC is subject to the jurisdictions of the Federal Energy Regulatory
Commission ("FERC"), the Nevada Public Utility Commission ("PUCN"), and the
California Public Utility Commission. Nevada Power is subject to the
jurisdictions of the FERC and the PUCN. PGE is subject to the jurisdictions of
Oregon Public Utility Commission ("OPUC") and the FERC. Each of these
commissions have enacted rules governing the transactions among the regulated
utilities and affiliated companies. The Services Agreement must be filed with
two state utility commissions. The PUCN has an open docket to consider a shared
services agreement proposed by Sierra Pacific which predates the PGE
acquisition. The Services Agreement will supplant the earlier proposed agreement
in that pending docket. The Services Agreement must also be filed with the OPUC.
No approval will be required in California.
Sierra Pacific will file information on any action that may be taken
by a state utility commission with respect to the Services Agreement in an
amendment to this Application/Declaration. Except as stated above, no state or
federal regulatory agency other than the Commission under the Act has
jurisdiction over the proposed transactions.
Item 5. Procedure
The Applicants respectfully request that the Commission issue and
publish not later than June 2, 2000, the requisite notice under Rule 23 with
respect to the filing of this Application, such notice to specify a date not
later than June 27, 2000, by which comments may be entered and a date not later
than September 1, 2000, as a date after which an order of the Commission
granting and permitting this Application to become effective may be entered by
the Commission.
The Applicants hereby (i) waive a recommended decision by a hearing
officer, (ii) waive a recommended decision by any other responsible officer or
the Commission, (iii) consent that the Division of Investment Management may
assist in the preparation of the Commission's decision and (iv) waive a 30-day
waiting period between the issuance of the Commission's order and the date on
which it is to become effective.
Item 6. Exhibits and Financial Statements.
a. Exhibits.
A-1 Articles of Incorporation of SPRSC**
A-2 By-Laws of SPRSC**
B-1 Form of Services Agreement between SPRSC and each Subsidiary
B-2 Service Company Policies and Procedures
F-1 Opinion of Counsel**
F-2 Past Tense Opinion of Counsel**
H-1 Proposed Form of Notice
**To be filed by amendment.
Item 7. Information as to Environmental Effects
The Transaction will not involve major federal action significantly
affecting the quality of the human environment as those terms are used in
Section 102(2)(C) of the National Environmental Policy Act, 42 U.S.C. Section
4321 et seq. ("NEPA"). First, no major federal action within the meaning of NEPA
is involved Second, consummation of the Transaction will not result in changes
in the operations of PGE or the subsidiaries of Sierra Pacific that would have
any significant impact on the environment. To the Applicants' knowledge, no
federal agency is preparing an environmental impact statement with respect to
this matter.
<PAGE>
SIGNATURE
Pursuant to the requirements of the Public Utility Holding Company Act
of 1935, the undersigned Applicant has duly caused this pre-effective Amendment
No. 1 to its Application/Declaration on Form U-1 to be signed on its behalf by
the undersigned thereunto duly authorized.
SIERRA PACIFIC RESOURCES:
By: Date: 5/24/00
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Name: William E. Peterson
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Title: Senior Vice President, General Counsel and Corporate Secretary
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