As filed with the Securities and Exchange Commission on
April 7, 2000
File No. 70-9633
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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PRE-EFFECTIVE AMENDMENT NO. 1 TO
APPLICATION-DECLARATION
ON FORM U-1
UNDER THE
PUBLIC UTILITY HOLDING COMPANY ACT OF 1935
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UNITIL CORPORATION
CONCORD ELECTRIC COMPANY
EXETER & HAMPTON ELECTRIC COMPANY
FITCHBURG GAS AND ELECTRIC LIGHT COMPANY
UNITIL POWER CORP.
UNITIL REALTY CORP.
UNITIL RESOURCES INC.
UNITIL SERVICE CORP.
6 Liberty Lane West
Hampton, New Hampshire 03842-1720
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(Name of companies filing this statement and
address of principal executive offices)
UNITIL CORPORATION
6 Liberty Lane West
Hampton, New Hampshire 03842-1720
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(Name of top registered holding company parent)
Mark H. Collin
Treasurer
UNITIL CORPORATION
6 Liberty Lane West
Hampton, New Hampshire 03842-1720
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(Name and address of agent for service)
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The Commission is requested to mail copies of
all orders, notices and communications to:
William S. Lamb, Esq.
LeBoeuf, Lamb, Greene & MacRae, L.L.P.
125 West 55th Street
New York, New York 10019
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The Applicants hereby amend and restate their Application-Declaration
as follows:
ITEM 1. DESCRIPTION OF PROPOSED TRANSACTIONS
Unitil Corporation, a New Hampshire corporation ("Unitil") and a
registered holding company under the Public Utility Holding Company Act of 1935,
as amended (the "Act"), and its wholly owned subsidiary companies, Concord
Electric Company ("Concord"), Exeter & Hampton Electric Company ("Exeter"),
Fitchburg Gas and Electric Light Company ("Fitchburg"),Unitil Power Corp.
("Unitil Power"), Unitil Realty Corp. ("Unitil Realty"), Unitil Resources, Inc.
("Unitil Resources") and Unitil Service Corp. ("Unitil Service" and, together
with Concord, Exeter, Fitchburg, Unitil Power, Unitil Realty and Unitil
Resources, the "Subsidiaries" or "Money Pool Participants"),1 hereby submit this
application-declaration on Form U-1 (the "Application- Declaration") with the
Securities and Exchange Commission (the "Commission") for the authorization and
approval under Sections 6(b), 7, 9(a), 10 and 12(b) of the Act and the Rules 43,
45 and 52 thereunder with respect to the following transactions:
(a) short-term borrowing by Unitil through June 30, 2003 on a revolving
basis under current and proposed unsecured facilities from certain banks up
to an aggregate amount of $25 million for a period of time through June 30,
2003 to be used in connection with (i) loans or advances to Subsidiaries
through the Pooling Agreement (as defined below), (ii) payment of
indebtedness, (iii) short-term cash needs which may arise due to payment
timing differences, and (iv) other general purposes;
(b) short-term borrowings by Fitchburg2 through June 30, 2003 pursuant to
formal or informal credit lines up to $20 million; and
(c) in connection with the continued use of the system money pool ("Money
Pool") by Unitil and the Money Pool Participants,3 pursuant to the Cash
Pooling and Loan
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1 For purposes of this Application-Declaration, Unitil and the Subsidiaries
are collectively referred to as the "Applicants".
2 Concord, Exeter and Unitil Power have each obtained authorization for
their respective short-term borrowings from the New Hampshire Public Utilities
Commission. Moreover, any such short-term borrowings will be used solely for the
purpose of financing their respective businesses at interest rates and with
maturity dates that would parallel such lender's effective short-term cost of
capital on any given date. Accordingly, such short-term borrowings by Concord,
Exeter and Unitil Power are exempt from the prior approval requirements of
Sections 6 and 9 of the Act under Rule 52(a) and (d).
3 Unitil Realty, Unitil Resources and Unitil Services are non-utility
Subsidiaries of Unitil whose short-term borrowings will be used solely for the
purpose of financing their respective businesses at interest rates and with
maturity dates that would parallel such lender's effective short-term cost of
capital on any given date. Accordingly, such transactions are exempt from the
prior approval requirements of Section 6 of the Act under Rule 52(b).
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Agreement (the "Pooling Agreement") among Unitil and the Money Pool Participants
dated as of February 1, 1985, as amended (attached hereto as Exhibit B-1), for
the other Applicants to make loans to Fitchburg in an amount not to exceed $20
million through June 30, 2003.
By order dated June 30, 1997, the Applicants are currently authorized to
make unsecured short-term borrowings and to operate under the Money Pool, as
more fully described in the joint application-declaration on Form U-1, as
amended, in File No. 70-9053, and the Commission's order with respect thereto
(HCAR No. 35-26737). Pursuant to Rule 52 under the Act, the continued operation
of the Money Pool does not require further Commission approval. In accordance
with Section 6(b) of the Act, none of the transactions contemplated herein will
be part of a public offering.
The proposed transactions may be subject to Rules 53 and 54 under the Act.
Neither Unitil nor any Subsidiary thereof presently has, or as a consequence of
the proposed transactions will have, an interest in any exempt wholesale
generator ("EWG") or foreign utility company ("FUCO"), as those terms are
defined in Sections 32 and 33 of the Act, respectively. None of the proceeds
from the proposed transactions will be used to acquire any securities of, or any
interest in, an EWG or FUCO. Moreover, neither Unitil nor any of the
Subsidiaries is, or as a consequence of the proposed transactions will become, a
party to, and such entities do not and will not have any rights under, a
service, sales or construction contract with any affiliated EWGs or FUCOs except
in accordance with the rules and regulations promulgated by the Commission with
respect thereto. Consequently, all applicable requirements of Rule 53(a)-(c)
under the Act are satisfied as required by Rule 54 under the Act.
A. Bank Borrowing by Unitil
In this Application-Declaration, Unitil seeks to extend the authorization
through June 30, 2003 for its short-term bank borrowing arrangements, as
described herein.
As of February 17, 2000, Unitil had three unsecured lines of credit: an $8
million unsecured line of credit from BankBoston (attached hereto as Exhibit
B-2); an $8 million unsecured line of credit from Fleet Bank - New Hampshire
(attached hereto as Exhibit B-3); and a $5 million unsecured line of credit from
Citizens Bank New Hampshire (attached hereto as Exhibit B-4).
(i) BankBoston
The $8 million unsecured line of credit is available to Unitil through
July 29, 2000. The interest rate for borrowing under the facility shall be
floating daily at the higher of (a) the rate of interest announced publicly
by BankBoston as its Base Rate or (b) one half of one percent per annum
above the daily Federal Funds Effective Rate published by the Federal
Reserve Bank of New York in Report H-15. In addition to this line of
credit, BankBoston has approved an informal money market lending
arrangement for minimum amounts of $500,000, at fixed rates out to sixty
days, that is available to Unitil through July 29, 2000. The unsecured line
of credit and the informal money market lending
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arrangement are each available to Unitil subject to the bank's continued
satisfaction with the financial condition of Unitil and the Subsidiaries
and to no substantive changes in monetary or governmental regulations.
(ii) Fleet Bank - New Hampshire
The $8 million unsecured line of credit is available to Unitil through
June 30, 2000. The interest rate for borrowing under the facility is equal
to (a) the Base Rate (as defined below) or (b) the Money Market Rate (as
defined below), as elected by Unitil. This line is available to Unitil
subject to the bank's continued satisfaction with the financial condition
of Unitil and the Subsidiaries and to no substantive changes in monetary or
governmental regulations.
(iii) Citizens Bank New Hampshire
The $5 million unsecured line of credit is available to Unitil through
August 30, 2000. The interest rate for borrowing under the facility is
equal to the London Interbank Offered Rate ("LIBOR") as in effect on the
date of the loan plus four-tenths of one percent per annum. This line is
available to Unitil subject to the bank's continued satisfaction with the
financial condition of Unitil and the Subsidiaries and to no substantive
changes in monetary or governmental regulations.
The term "Base Rate," as used in the above discussion of Unitil's
short-term borrowing facilities, is synonymous with the prime rate, which is the
interest rate per annum from time to time announced and made effective by a bank
as the Base Rate, or as the case may be, the Base, reference or other similar
rate then designated by it for general commercial lending reference purposes, it
being understood that such rate is a reference rate, not necessarily the lowest,
established from time to time which serves as the basis upon which effective
rates of interest are calculated for loan making reference thereto.
The term "Money Market Rate," as used in the above discussion of Unitil's
short-term borrowing facilities, is the overnight or term money market
facilities interest rate per annum which is communicated to Unitil by a bank.
Money Market Rates are offered by certain banks at a given point in time
and will vary depending on a number of factors including: the availability of
bank funds, the bank's internal cost of funding, the creditworthiness of the
borrower, the term of the loan, the size of the loan and the degree of
competition among banks in a market. The Money Market Rate offered by a bank is
normally a lower rate with more favorable terms and conditions than it Base
Rate. Under its short-term bank borrowing facilities, Unitil borrows at Money
Market Rates when such rates are available and more favorable than Base Rates.
Any borrowings at Money Market Rates, under current facilities proposed below,
do not and will not exceed the Base Rate for unsecured loans by the same bank.
Unitil proposes to issue short-term notes pursuant to both formal and
informal lines of credit with lending institutions. Unitil's current borrowing
agreements, described above and
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attached as Exhibits B-2, B-3 and B-4 are typical of the forms of short-term
notes proposed to be used by Unitil. Short-term unsecured promissory notes will
be issued by Unitil to a particular lending institution prior to the first
borrowing under that promissory note. Borrowings will be evidenced on a "grid"
schedule, in the form attached to each promissory note and will be recorded the
day that the request for borrowing is made. The bank holding the respective
promissory notes will maintain the record of borrowings and repayments without
the necessity of issuing additional notes. Unitil anticipates that the
promissory notes used may vary from the forms described above to reflect
customary terms or particular lending practices and policies of different
lending institutions, but otherwise will be substantially similar.
Unitil's present and proposed short-term borrowing arrangements provide,
and will provide, for borrowings at the so-called "Base Rate" or "prime rate"
and are subject to prepayment at the borrower's option. The borrowing rate shall
change as the base rate changes. In addition, short-term notes may provide
informal borrowings at sub-prime rate or Money Market Rate which may be made
available under each credit line arrangement. Money Market Rates are fixed
rates. Under Unitil's current short-term borrowing arrangements, Money Market
Rate borrowings are not subject to prepayment. Money Market Rate borrowings
under the proposed facilities may or may not be subject to prepayment.
Borrowings under the proposed credit agreements will not exceed the shorter
of the term of the particular line of credit or nine months. Short-term notes
issued on a transactional basis, will be dated as of the date of issue, will
have a maximum term of nine months and will bear interest at the Base or Money
Market Rate, described above.
Unitil requests authority to secure both formal and informal credit lines
with a number of lending institutions. Formal credit lines under the proposed
facilities may be subject to compensating balances and/or fee requirements.
Compensating balance requirements will not exceed 5% of the committed credit
line amount, and fees will not exceed 50 basis points times the total line of
credit. Unitil may change its credit line arrangements and obtain additional
formal or informal credit lines over time. The continued availability of such
credit lines is subject to the continued review of the lending institutions.
Unitil requests authority to renew and extend current short-term borrowings
under the existing and proposed facilities as such borrowings mature and/or
secure credit lines with other lending institutions under similar conditions, to
refund such short-term borrowings with other, similar short-term borrowings, to
repay such short-term borrowings or to increase their amount from time to time
up to an aggregate amount of $25 million, the maximum limit approved by the
Unitil Board of Directors (see Exhibit B-6). Unitil requests that the authority
to undertake new short-term borrowing be granted through June 30, 2003.
Unitil expects to use the proceeds derived from short-term bank borrowings
authorized by this Commission pursuant to this application/declaration for: (i)
loans or advances to Subsidiaries through the Pooling Agreement, (ii) payment of
indebtedness, (iii) short-term cash needs which may arise due to payment timing
differences, and (iv) other general purposes.
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B. Short-Term Borrowing by Fitchburg - Pooling Agreement and Other
Fitchburg requests that it be authorized by the Commission to incur
short-term borrowings from any source, including the Money Pool, in an aggregate
principal amount at any one time outstanding not to exceed $20 million, which is
the maximum limit approved by its Board of Directors (see Exhibit B-5) and to
increase the amount it is authorized to have outstanding at any time under such
arrangements to $20 million, as described herein.
It is anticipated that most short-term borrowings by Fitchburg will be made
pursuant to the Pooling Agreement. However, the Fitchburg board resolutions do
not prohibit Fitchburg from short-term borrowing outside of the Pooling
Agreement. Accordingly, Fitchburg seeks Commission authorization for short-term
borrowings up to $20 million through the Pooling Agreement and through direct
borrowings from commercial banks.
Fitchburg will use the proceeds from its short-term borrowing primarily to
meet working capital requirements and provide interim financing for its utility
construction expenditures. In addition to construction and other physical
improvements, the funds will be used for permitted debt and preferred stock
sinking fund redemptions.
Any short-term borrowing from commercial banks undertaken by Fitchburg will
be under terms and conditions substantially similar to the terms and conditions
of the current short-term borrowing agreements between Unitil and its commercial
banks described above in Section A. Fitchburg proposes to issue short-term notes
pursuant to both formal and informal lines of credit with lending institutions.
Short-term promissory notes are expected to be issued to a particular lending
institution prior to the first borrowing under that promissory note from that
lender. Borrowings will be evidenced on a so called "grid" schedule, in the form
attached to each promissory note and will be recorded the day that the request
for borrowing is made. The bank holding the respective promissory notes will
maintain the record of borrowings and repayments without the necessity of
issuing additional notes. Fitchburg anticipates that the promissory notes used
may vary from the forms described above to reflect customary terms or particular
lending practices and policies of different lending institutions, but otherwise
will be substantially similar.
Short-term borrowing arrangements will provide for borrowings at the
so-called "Base Rate" or "prime rate" and will be subject to prepayment at the
borrower's option. In addition, short-term notes may provide informal borrowings
at alternate Base Rates, sub-prime rates or Money Market Rates which are to be
made available under the line of credit arrangements. Money Market Rates are
fixed rate loans and may or may not be subject to prepayment. Any borrowing at
Money Market Rates will be at a rate not to exceed the prime rate for unsecured
loans by the same bank.
Borrowings under credit agreements with commercial banks will not exceed
the shorter of the term of the particular line of credit or nine months.
Short-term notes issued on a transactional basis will be dated as of the date of
issue, will have a maximum term of nine months and will bear interest at the
Base or Money Market Rate described above.
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Fitchburg requests authority to secure both formal and informal credit
lines with a number of lending institutions. Formal credit lines may be subject
to compensating balances and/or fee requirements. Compensating balance
requirements will not exceed 5% of the committed credit line amount, and fees
will not to exceed 50 basis points times the total line of credit. The
Subsidiaries may change their credit line arrangements and obtain additional
formal or informal credit lines over time.
Pursuant to the requirements of Rule 24 under the Act, Unitil and its
Subsidiaries have filed a quarterly report on short-term borrowings and money
pool transactions as required by the Commission's order approving short-term
borrowings and the Unitil Money Pool. Pro Forma Balance Sheets and Income
Statements for Unitil and Fitchburg giving effect to requested maximum
borrowings are attached.
C. Pooling Agreement
All the Applicants currently participate in the Money Pool pursuant to the
Pooling Agreement among Unitil and the Money Pool Participants. The Pooling
Agreement allows Unitil and the Money Pool Participants to invest their surplus
funds and the Money Pool Participants to obtain advances (i.e., borrow funds)
from the System's Money Pool.4 Unitil Service administers the Money Pool for
Unitil and the other Money Pool Participants on an "at cost basis". This
arrangement is used to: (i) provide the Money Pool Participants with funds
supplied internally by Unitil and the Money Pool Participants (i.e., surplus
funds) and from external sources (i.e., bank borrowings), as described below;
and (ii) invest surplus funds of Unitil and the Money Pool Participants in
various short-term money market instruments. Any issuance of debt securities
under the Money Pool shall have a maximum term of nine months.
The Money Pool offers several advantages to Unitil and the Money Pool
Participants, including: lower overall short-term borrowing costs; a mechanism
for each Money Pool Participant to earn a higher return on interest from surplus
funds; and a decreased reliance on external funding sources. Lower borrowing
costs are derived from the elimination of the additional banking fees that would
be required if each Money Pool Participant had to maintain its own lines of
credit and borrow on its own, and from reduction in the short-term cost of money
when Unitil borrows, in the aggregate, on behalf of the Money Pool Participants,
as opposed to each Money Pool Participant borrowing on its own. In addition, the
Money Pool provides a mechanism for each Money Pool Participant to earn
short-term interest on surplus funds that are loaned to other Money Pool
Participants, at a rate normally charged by Unitil's lead bank instead of at the
prevailing short-term investment rate. In addition to commercial paper, Unitil
may invest surplus funds in various institutional money market funds (as defined
by the Investment Company Act of 1940) or comparable interest bearing
instruments which seek to obtain a high level of current income while preserving
principal and liquidity. Overall, the Money Pool arrangement
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4 Unitil may incur short-term borrowings up to an aggregate amount of $25
million outstanding at any time as authorized by its Board of Directors which
may be loaned or advanced to the Money Pool Participants through the Pooling
Agreement. Fitchburg may borrow up to an aggregate amount of $20 million
outstanding at any time as authorized by its Board of Directors.
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allows Unitil and the Money Pool Participants to effectively maximize the use of
internally generated funds and, thereby, decrease the reliance on external
funding sources.
In connection with the continued use of the Money Pool by Unitil and the
Money Pool Participants through June 30, 2003, Fitchburg seeks approval to make
loans to the other Money Pool Participants and incur borrowings from the other
Applicants, and the other Applicants seek approval to make loans to Fitchburg.
ITEM 2. FEES, COMMISSIONS AND EXPENSES
The fees, commissions and expenses of the Applicants expected to be paid or
incurred, directly or indirectly, in connection with the transactions described
above are estimated as follows:
Legal fees .......................................... $5,000
Miscellaneous .......................................... $3,000
Total .......................................... $8,000
ITEM 3. APPLICABLE STATUTORY PROVISIONS
Sections 6(b), 7, 9(a), 10 and 12(b) of the Act, and Rules 43, 45 and
52 thereunder, are directly applicable to this Application-Declaration.
ITEM 4. REGULATORY APPROVALS
The Money Pool has already been approved by the Massachusetts Department of
Public Utilities with respect to Fitchburg and the New Hampshire Public
Utilities Commission with respect to Unitil, Concord, Exeter and Unitil Power.
No state or federal agency other than the Commission has jurisdiction with
respect to any of the proposed transactions other than as described in this
item.
ITEM 5. PROCEDURE
It is requested that the Commission issue and publish no later than April
7, 2000, the requisite notice under Rule 23 with respect to the filing of this
Application-Declaration, such notice to specify a date not later than May 2,
2000 as the date after which an order granting and permitting this
Application-Declaration to become effective may be entered by the Commission and
that the Commission enter not later than May 3, 2000, an appropriate order
granting and permitting this Application-Declaration to become effective.
No recommended decision by a hearing officer or other responsible officer
of the Commission is necessary or required in this matter. The Division of
Investment Management of the Commission may assist in the preparation of the
Commission's decision in this matter. There should be no thirty-day waiting
period between the issuance and effective date of any order issued
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by the Commission in this matter, and it is respectfully requested that any such
order be made effective immediately upon the entry thereof.
ITEM 6. EXHIBITS AND FINANCIAL STATEMENTS
a) Exhibits
Exhibit No. Description of Exhibit
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B-1 Cash Pooling and Loan Agreement, as amended (Filed with the
Commission as Exhibit A-1 to Form U-1 File No. 70-8623 and
incorporated by reference herein).
B-2 Line of Credit and Promissory Note from BankBoston
(Previously Filed).
B-3 Line of Credit and Promissory Note from Fleet Bank - New
Hampshire (Previously Filed).
B-4 Line of Credit and Promissory Note from Citizens Bank New
Hampshire (Previously Filed).
B-5 Resolutions of Fitchburg Board of Directors (Filed with the
Commission as Exhibit A-4 to Form U-1 File No. 70-8066 and
incorporated by reference herein).
B-6 Resolutions of Unitil Board of Directors authorizing
short-term borrowing limits (Filed as Exhibit B-6 to Form
U-1 File No. 70-9053 and incorporated by reference herein).
D-1 New Hampshire Public Utilities Commission Order No. 18,416
(Filed with the Commission as Exhibit D-3 to Form U-1 File
No. 70-8066 and incorporated by reference herein).
D-2 New Hampshire Public Utilities Commission Order No. 17,373
(Filed with the Commission as Exhibit D-4 to Form U-1 File
No. 70-8066 and incorporated by reference herein).
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D-3 Massachusetts Department of Public Utilities Commission
Order No. MDPU 89-66 (Filed with the Commission as Exhibit
D-5 to Form U-1 File No. 70-8066 and incorporated by
reference herein).
F-1 Opinion of Counsel (To be filed by Amendment).
F-2 "Past Tense" Opinion of Counsel (To be filed by Amendment).
G-1 Financial Data Schedule (Previously Filed).
H-1 Proposed Form of Notice (Previously Filed).
b) Financial Statements
No. Description of Financial Statement
FS-1 Unitil Corporation and Subsidiary Companies Consolidated
Actual and Pro Forma Balance Sheets and Statement of
Earnings, September 30, 1999 (Previously Filed).
FS-2 Unitil Corporation and Subsidiary Companies Consolidated
Actual Balance Sheets and Statement of Earnings, September
30, 1999 (Filed with the Commission with Unitil's 10-Q for
the period ended September 30, 1999 and incorporated by
reference herein).
FS-3 Unitil Corporation (Company Only) Actual and Pro Forma
Balance Sheets and Statement of Earnings, September 30, 1999
(Previously Filed).
FS-4 Fitchburg Actual and Pro Forma Balance Sheet and Statement
of Earnings, September 30, 1999 (Previously Filed).
FS-5 Concord Electric Company Balance Sheet and Statement of
Earnings, September 30, 1999 (Previously Filed).
FS-6 Exeter & Hampton Electric Company Balance Sheet and
Statement of Earnings, September 30, 1999 (Previously
Filed).
ITEM 7. INFORMATION AS TO ENVIRONMENTAL EFFECTS
None of the matters that are the subject of this Application-Declaration
involve a "major federal action" nor do they "significantly affect the quality
of the human environment" as those terms are used in Section 102(2)(C) of the
National Environmental Policy Act. None of the proposed transactions that are
the subject of this Application-Declaration will result in changes in the
operation of the Applicants that will have an impact on the environment. The
Applicants are not aware of any federal agency which has prepared or is
preparing an environmental impact statement with respect to the transactions
proposed herein.
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.
Dated: April 7, 2000
UNITIL CORPORATION
By: /s/ Mark H. Collin
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Name: Mark H. Collin
Title: Treasurer
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