STATE OF NORTH CAROLINA
UTILITIES COMMISSION
RALEIGH
DOCKET NO. G-5, SUB 399
BEFORE THE NORTH CAROLINA UTILITIES COMMISSION
In The Matter of )
Application by Public Service ) ORDER GRANTING
Company of North Carolina, Inc. ) AUTHORITY TO ISSUE
for Authority to Issue and Sell up ) AND SELL DEBT
to $150,000,000 Of Senior ) SECURITIES
Unsecured Debt Securities )
BY THE COMMISSION: Public Service Company of North Carolina, Inc. ("PSNC"
or "Company") filed an Application on March 24, 1999, and filed amendments to
the Application on April 5, 1999, wherein the Company requests Commission
authority to issue and sell up to $150,000,000 principal amount of senior
unsecured debt ("Senior Debt") securities. The $150,000,000 amount includes $25
million of Senior Debt which was authorized by Commission Order dated November
5, 1996, in Docket No. G-5, Sub 365, that has not been issued and sold. The
Company proposes to issue and sell the Senior Debt, from time to time, in one or
more public offerings, pursuant to the terms and conditions of underwriting
agreements to be entered into by and between Public Service and an underwriter.
A proposed form of such an underwriting agreement is attached to the
Application, as amended, as Exhibit A.
Based upon the verified Application as amended, and the exhibits attached
thereto, information in the Commission's public files and records, and matters
which may be judicially noticed, the Commission makes the following
FINDINGS OF FACT
1. PSNC is a corporation duly organized under the laws of the State of
North Carolina having its principal office and place of business in Gastonia,
North Carolina. PSNC operates a natural gas pipeline system for the
transportation, distribution, and sale of natural gas within a franchised area
consisting of all or parts of thirty-one (31) counties in central and western
North Carolina as designated in PSNC's certificates of public convenience and
necessity issued by this Commission,
2. PSNC is engaged in providing natural gas utility service to the public
and is a "public utility," as defined in G.S.ss.62-3(23), subject to the
jurisdiction of this Commission pursuant to G.S.ss.62-2.
3. PSNC has constructed, and will continue to construct, facilities to
receive, transmit, distribute, deliver, and sell natural gas to residential,
commercial, industrial, and other consumers of natural gas within PSNC's service
territory as described in :the certificates of the public convenience and
necessity issued to PSNC by this Commission as described above. PSNC's current
and continuing construction program consists of the construction of new
facilities to extend natural gas service to new customers and to maintain
service to existing customers.
4. PSNC requests permission and authorization to issue and sell Senior Debt
in a principal amount up to $150,000,000. This debt will be issued and sold to
the public pursuant to underwriting agreements to be entered into by and between
PSNC and an underwriter. The underwriter will issue and sell this Senior Debt to
the public no earlier than the times when PSNC determines that market conditions
are favorable. PSNC filed a proposed form of an underwriting agreement with its
Application, as amended, in this proceeding.
5. This Senior Debt will be comprised of the senior debt securities having
an aggregate principal amount of $125,000,000 contemplated by a shelf
registration statement to be filed with the Securities and Exchange Commission
("SEC") on Form S-3, and the remaining $25,000,000 authorized by the shelf
registration statement that PSNC previously filed with the SEC on Form S-3
(Registration No. 33-65205) and filed with the Commission on January 31, 1996,
in Docket No, G-5, Sub 351. A copy of this new shelf registration statement is
to be filed with the Commission when available.
6. This Senior Debt will be issued without coupons in denominations of
$1,000, or any multiple thereof. The principal amount of Senior Debt which may
be issued under this application is limited to $150,000,000 (including the
$25,000,000 remaining on the authorization granted in Docket No. G-5, Sub 365).
The interest rate on this Senior Debt, and other terms and conditions, will be
determined at the time or times that PSNC issues debt under the authorization
granted herein. In the event of default in the payment of principal or interest
on any of this Senior Debt, the remedies and provisions set forth in an
underwriting agreement and Supplemental Indenture will apply.
7. PSNC's capital stock as of February 28, 1999 consisted solely of Common
Stock, which has a par value of $1,00 per share, PSNC is authorized to Issue
30,000,000 shares of Common Stock, and had 20,553,806 shares outstanding as of
February 28, 1999,
8. PSNC's long-term debt, including current maturities, as of February 28,
1999, consisted of senior unsecured debentures of various maturity dates
extending from 2003 to 2026, in various principal amounts outstanding. The total
principal amount outstanding is $164,050,000.
9. PSNC also requires funds to repay a portion of its short-term bank
loans, which totaled $78,500,000 as of February 28, 1999. These loans were
incurred primarily to finance the construction of PSN's facilities, and also to
fund stored gas inventories and other corporate purposes.
10. PSNC requests permission and authorization to issue the Senior Debt for
lawful purposes which are within the corporate purposes of PSNC, compatible with
the public interest, and necessary and appropriate for, and consistent with,
PSNC's provision of adequate utility service to the public. Furthermore, the
utility service that PSNC renders will be materially promoted by the
transactions proposed herein, and PSNC's ability to provide that utility service
may be impaired in the absence of permission and authorization to undertake the
transactions contemplated and to issue and sell the Senior Debt as described
above.
WHEREUPON, the Commission now reaches the following
CONCLUSIONS
Based upon the foregoing Findings of Fact and from a review and study of
the amended Application, its supporting data, and other information in the
Commission's files, the Commission is of the opinion and so concludes that the
transactions herein proposed are:
(a) For lawful purposes within the corporate purposes of PSNC;
(b) Compatible with the public interest;
(c) Necessary and appropriate for and consistent with PSNC's ability
to provide adequate utility service to the public and will not
impair its ability to provide that service; and
(d) Reasonably necessary and appropriate for such purposes,
IT IS, THEREFORE, ORDERED that:
1. PSNC is authorized and permitted to issue and sell, from time to time,
up to $150,000,000 of Senior Debt (including the $25,000,000 of Senior Debt
remaining under the authorization previously granted in Docket No. G-5, Sub
365), as described and requested in PSNC's Application, as amended. PSNC shall
file all executed underwriting agreements with the Commission as soon as they
are available-
2. PSNC is authorized to incur and pay the estimated fees and expenses in
connection with each issuance and sale of Senior Debt (including fees paid to
the rating agencies) under the authorization granted herein. PSNC is further
authorized to amortize the actual fees and expenses associated with each
issuance and sale of Senior Debt over the life of such Senior Debt under the
authorization granted herein. Within sixty (60) days after each issuance and
sale of such Senior Debt, PSNC will file with the Commission, In duplicate, a
statement listing all fees and expenses actually incurred with respect-to each
issuance and sale of such Senior Debt.
3. Within sixty (60) days after each issuance and sale of Senior Debt under
the authorization granted herein, PSNC shall file with this Commission, In
duplicate, a verified report of actions taken and transactions consummated
pursuant to the authority granted herein. Such report shall contain the
following Information and data:
(a) date of sale;
(b) principal amount sold,
(c) the stated coupon, interest, or dividend rate, as appropriate;
(d) the offering price to the public or purchaser:
(e) the underwriters' commissions and fees;
(f) the net cost to PSNC;
(g) other direct expenses related to the issuance and sale of such
Senior Debt;
(h) if any of the proceeds are to be used to redeem existing
securities, the docket number of the proceeding in which the
securities to be redeemed were authorized and the savings, if
any, in interest or dividend rate to be realized from the
redemption transaction being reported;
(i) a copy of the executed Underwriting Agreement and Supplemental
Indenture (both in final form) for each sale of the Senior Debt
authorized herein as soon as such agreements are available; and
(j) such information regarding each such issuance and sale as may be
relevant.
4. This proceeding is continued on the docket of the Commission, without
delay, for the purpose of receiving the SEC registration statement, copies of
executed underwriting agreements, and reports, as herein above provided.
Further, the Commission's approval in this docket does not restrict the
Commission's right to review and, if deemed appropriate, adjust PSNC's cost of
capital or expense levels for ratemaking purposes for the effect of these
securities.
ISSUED BY ORDER OF THE COMMISSION.
This the 14th of April, 1999.
NORTH CAROLINA UTILITIES COMMISSION
/s/
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Geneva S. Thigpen, Chief Clerk
