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Exhibit D-1
UNITED STATES OF AMERICA
BEFORE THE
FEDERAL ENERGY REGULATORY COMMISSION
)
Edison Sault Electric Company ) Docket No. EC00-___-000
)
APPLICATION OF EDISON SAULT ELECTRIC COMPANY
FOR AUTHORIZATION TO TRANSFER JURISDICTIONAL
TRANSMISSION ASSETS PURSUANT TO SECTION 203
OF THE FEDERAL POWER ACT
Donald Sawruk Julie B. Greenisen
President Antoine P. Cobb
Edison Sault Electric Company Melissa L. Pignatelli
725 East Portage Avenue Troutman Sanders LLP
Sault Ste. Marie, MI 49783 1300 I Street, N.W.
(906) 632-2271 Suite 500 East
Washington, D.C. 20005-3314
(202) 274-2950 (telephone)
(202) 274-2994 (facsimile)
Dated: August 28, 2000
Washington, D.C.
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UNITED STATES OF AMERICA
BEFORE THE
FEDERAL ENERGY REGULATORY COMMISSION
)
Edison Sault Electric Company ) Docket No. EC00-___-000
)
APPLICATION OF EDISON SAULT ELECTRIC COMPANY
FOR AUTHORIZATION TO TRANSFER JURISDICTIONAL
TRANSMISSION ASSETS PURSUANT TO SECTION 203
OF THE FEDERAL POWER ACT
Pursuant to Section 203 of the Federal Power Act ("FPA")/1/ and Part
33 of the regulations of the Federal Energy Regulatory Commission ("FERC" or
"Commission"),/2/ Edison Sault Electric Company ("Edison Sault") hereby tenders
for filing the original and five copies of this application ("Application") for
authorization to transfer ownership and operational control of its FERC-
jurisdictional transmission assets ("Divestiture Transaction") to American
Transmission Company LLC ("ATCLLC")./3/ ATCLLC is a Wisconsin limited liability
company created pursuant to the State of Wisconsin's "Reliability 2000"
legislation/4/ for the purpose of owning and operating the high voltage
transmission system in Wisconsin. The assets that Edison Sault proposes to
transfer to ATCLLC comprise the integrated, high-voltage (50kV and above)
transmission system that Edison Sault currently owns and operates (the "Edison
Sault Transmission System"). Pursuant to the Divestiture Transaction: (1) Edison
Sault will divest its 100 percent interest in the Edison Sault Transmission
System through the transfer of those assets
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/1/ 16 U.S.C. (S) 824b (1994).
/2/ 18 C.F.R. (S) 33.1 et seq. (1999).
/3/ Edison Sault also seeks, to the extent necessary, authority to assign to
ATCLLC all tariffs, contracts, books, and other records necessary to effectuate
the Divestiture Transaction.
/4/ 1999 Wisconsin Act 9 ("Act 9"); Wis. Stats. (S) 196.485(3m).
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to ATCLLC; and (2) ATCLLC will acquire operational control over the Edison Sault
Transmission System.
Act 9 requires ATCLLC to apply for all necessary approvals under state
or federal law to begin operations on or before January 1, 2001./5/ Accordingly,
Edison Sault hereby requests that the Commission review and approve the
Divestiture Transaction on or before November 15, 2000, in order to accommodate
closing the transfer in advance of the statutorily-required operations date of
January 1, 2001.
As shown below, the proposed transfer of the Edison Sault Transmission
System to ATCLLC is consistent with the public interest and should be approved.
I. BACKGROUND.
Initially, six other entities are transferring assets to ATCLLC. In
addition to Edison Sault, the following entities will transfer assets to ATCLLC
by January 1, 2001: Wisconsin Electric Power Company ("WEPCO"), Wisconsin Power
& Light Company ("WPL"), Wisconsin Public Service Corp. ("WPS"), South Beloit
Water, Gas and Electric Company ("SBWGE"), Madison Gas & Electric Company
("MGE"), and Wisconsin Public Power Inc. ("WPPI") (collectively, the
"Participating Entities"). WEPCO and WPL have already received authorization to
transfer their jurisdictional facilities to ATCLLC. See Wisconsin Electric
Power Co., 90 FERC (P) 61,346 (2000); Wisconsin Power & Light Co., 90 FERC (P)
61,347 (2000). SBWGE's Section 203 application to transfer its jurisdictional
facilities to ATCLLC, which was filed in Docket No. EC00-120-000 on August 3,
2000, is presently pending
____________________________________
/5/ Wis. Stats. (S) 196.485(3m)(a)1.
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before the Commission. Finally, MGE and WPS are concurrently filing a joint
Section 203 application to transfer their jurisdictional assets to ATCLLC.
Through this Application, Edison Sault will join with the six other
Participating Entities in forming ATCLLC. ATCLLC will be structured as a for-
profit transmission company, and will own and control the contributed
transmission systems in Eastern Wisconsin (i.e., that part of Wisconsin that is
within the Mid-American Interconnected Network, Inc. ("MAIN")), and in certain
portions of Illinois and the Upper Peninsula of Michigan. Except for WPPI, all
of the Participating Entities are investor-owned utilities, and will receive
equity ownership interests in ATCLLC in proportion to the net book value of the
transmission facilities that they contribute. Because WPPI does not own any
transmission facilities, it will contribute cash to ATCLLC and will receive an
equity ownership interest in ATCLLC approximately/6/ in proportion to the cash
it contributes./7/
On July 31, 2000, ATCLLC filed an application for acceptance of its
open access transmission tariff. ATCLLC's application and the transmission
rates contained therein are premised, in part, on the Commission's approval of
Edison Sault's proposed transfer of facilities as outlined in this Section 203
application. ATCLLC's application is pending before the Commission in Docket
No. ER00-3316-000.
____________________
/6/ To account for tax adjustments, WPPI's ownership interest will be slightly
less than the proportionate amount of cash it contributes to ATCLLC.
/7/ WPPI is a municipal joint action agency organized pursuant to Wis. Stats.
(S) 66.073. WPPI provides bulk power, energy, and other services to its thirty
municipal member-owners. These members are located within the service
territories of the four large investor-owned utilities in Wisconsin: Northern
States Power Company-Wisconsin ("NSP-Wisconsin"), WEPCO, WPS and WPL. Each
member of WPPI is a Wisconsin municipality that operates its own municipal
electric utility and distributes electricity at retail to the residences,
businesses, and industries in and around its municipality. WPPI supplies the
bulk power and energy requirements of its municipal members from generation
resources owned by WPPI and through purchased power contracts. WPPI owns no
transmission facilities.
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Edison Sault notes that neither it nor ATCLLC proposes that ATCLLC, by
itself, will qualify as a Commission-approved Regional Transmission Organization
("RTO") under Order No. 2000./8/ ATCLLC and its member utilities, including
Edison Sault, will satisfy Order No. 2000 RTO requirements by joining the
Midwest Independent Transmission System Operator, Inc. ("Midwest ISO") and
transferring operational control of the ATCLLC transmission assets to the
Midwest ISO as soon as the Midwest ISO begins operations./9/ Edison Sault notes
that on December 29, 1999, in Docket No. EC98-24, WEPCO notified the Commission
that the Edison Sault Transmission System would join the pool of facilities to
be operated by the Midwest ISO when the Midwest ISO commences operations on
November 1, 2001. It is Edison Sault's understanding that the Midwest ISO
intends to qualify itself as an RTO.
Currently, Edison Sault has only one transmission customer, Cloverland
Electric Cooperative ("Cloverland"). Cloverland takes service under a pre-Order
No. 888/10/ transmission agreement - the Transmission Coordination Agreement
("TCA"). Cloverland has the ability to transfer its transmission assets to
ATCLLC and become a participating entity in ATCLLC. In fact, Edison Sault
understands that Cloverland is actively considering this option at this time.
However, because Cloverland has not yet made the decision to transfer its assets
to ATCLLC, Edison Sault proposes in this application to assign the TCA to
ATCLLC, such that Cloverland
_____________________
/8/ Regional Transmission Organizations, Order No. 2000, 65 Fed. Reg. 809, FERC
Stats. & Regs. (Regulations Preambles) (P) 31,089, order on reh'g, Order No.
2000-A, 65 Fed. Reg. 12088, FERC Stats. & Regs. (Regulations Preambles) (P)
31,092 (2000).
/9/ See Wis. Stats. (S) 196.485(3m)(a)1.d. and e.
/10/ See Promoting Wholesale Competition Through Open Access Non-Discriminatory
Transmission Services by Public Utilities; Recovery of Stranded Costs by Public
Utilities and Transmitting Utilities, Order No. 888, FERC Stats. & Regs.
(Regulations Preambles) (P) 31,036 (1996), order on reh'g, Order No. 888-A, III
FERC Stats. & Regs. (P) 31,048 (1997), order on reh'g, Order No. 888-B, 81 FERC
(P) 61,248 (1997), order on reh'g, Order No. 888-
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will have the ability to continue to receive transmission service as provided in
the TCA, with ATCLLC taking over Edison Sault's rights and responsibilities
under the contract. By transferring the TCA to ATCLLC, Cloverland will be able
to continue to receive service as originally contemplated under the agreement.
As demonstrated below, the Divestiture Transaction fully satisfies the
standards set forth in Order No. 592,/11/ and is consistent with the public
interest. Moreover, the Commission has already authorized as consistent with
the public interest similar transactions by WEPCO/12/ and by WPL./12/ In
addition, as discussed in Section VI.A.2, Edison Sault plans to take appropriate
steps to ensure that its only transmission customer - Cloverland - is not harmed
by the Divestiture Transaction. Edison Sault therefore respectfully requests
that the Commission approve this Application without an evidentiary hearing by
November 15, 2000.
________________________________________________________________________________
C, 82 FERC (P) 61,046 (1998).
/11/ Inquiry Concerning the Commission's Merger Policy Under the Federal Power
Act: Policy Statement, FERC Stats & Regs. (Regulations Preambles) (P) 31,044
(1996), order on reconsideration, Order No. 592-A, 79 FERC (P) 61,321 (1997)
("Merger Policy Statement"). The Commission recently issued a Notice of Proposed
Rulemaking that sets forth specific filing requirements and revisions to the
Part 33 filing requirements consistent with the Merger Policy Statement. See
Revised Filing Requirements Under Part 33 of the Commission's Regulations, IV
FERC Stats. & Regs. (P) 32,528 (1998) ("Merger Filing NOPR"). Although these
proposed regulations have not gone into effect, Edison Sault has attempted to
conform this filing to the principles articulated in the Merger Filing NOPR to
the extent practical.
/12/ Wisconsin Electric Power Company, 90 FERC (P) 61,346 (2000). When WEPCO
requested Section 203 approval of the Divestiture Transaction, the details of
the transaction were not yet finalized. Nonetheless, in Wisconsin Electric, the
Commission granted Section 203 approval to WEPCO for the transfer of its
transmission and related assets to a transmission company which would be a
member of the Midwest Independent Transmission System Operator, Inc. ("Midwest
ISO"). This application of WEPCO's affiliate Edison Sault will serve as notice
to the Commission of the form of corporate transfer that will also be utilized
by WEPCO to effectuate the transaction approved by the Commission in Wisconsin
Electric. Pursuant to the same transaction form utilized by the other
Participating Entities, WEPCO will transfer to ATCLLC its transmission assets,
as well as all related tariffs, contracts, books, records, and accounts
necessary to effectuate the transfer.
/13/ Wisconsin Power & Light Company, 90 FERC (P) 61,347 (2000).
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II. DESCRIPTION OF APPLICANT.
A. EDISON SAULT AND ITS RELEVANT AFFILIATES.
1. Wisconsin Energy Corporation.
Edison Sault is a wholly owned subsidiary of Wisconsin Energy
Corporation ("Wisconsin Energy"). Wisconsin Energy is a public utility holding
company exempt from registration under Section 3(a)(1) of the Public Utility
Holding Company Act of 1935, 15 U.S.C. (S) 79c(a)(1) ("PUHCA"). Wisconsin
Energy does not directly own, operate, or control any facilities used for the
generation, transmission, or distribution of electric energy in interstate
commerce. Wisconsin Energy has five subsidiaries, described below, which own
FPA-jurisdictional facilities.
2. Edison Sault Electric Company.
Edison Sault is a direct, wholly owned subsidiary of Wisconsin Energy.
Edison Sault is a public utility operating company that owns electric
generation, transmission, and distribution facilities located in the State of
Michigan. Edison Sault provides retail electric service to approximately 22,000
customers located on Michigan's Eastern Upper Peninsula. Edison Sault's retail
operations are subject to the jurisdiction of the Michigan Public Service
Commission ("MPSC"). Edison Sault also transmits and sells electric energy at
wholesale subject to the Commission's jurisdiction under Part II of the FPA. In
addition to its generating assets, Edison Sault owns approximately 340 miles of
transmission facilities with ratings from 69 to 138 kilovolts ("kV"). These
facilities are interconnected with WEPCO, Upper Peninsula Power Company,
Consumers Energy Company and Cloverland. Edison Sault is a member of the
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East Central Area Reliability Council and, on December 29, 1999, filed with this
Commission its request to become a member of Midwest ISO./14/
3. Wisconsin Electric Power Company.
WEPCO is a public utility operating company that owns electric
generation, transmission, and distribution facilities, as well as natural gas
distribution facilities. These facilities are located in the States of
Wisconsin and Michigan. WEPCO provides retail electric service to approximately
one million customers and retail natural gas service to approximately 400,000
customers located throughout portions of southeastern, central and northern
Wisconsin and the Upper Peninsula of Michigan. WEPCO also sells steam service
to about 450 customers in Milwaukee County. WEPCO's retail operations are
subject to the jurisdiction of the Public Service Commission of Wisconsin
("PSCW"), and the MPSC. WEPCO also transmits and sells electric energy at
wholesale subject to the Commission's jurisdiction under Part II of the FPA.
In addition to its generating assets, WEPCO owns approximately 2,870
miles of transmission facilities with ratings from 69 to 345kV. These
facilities are interconnected with the following entities: Edison Sault,
Commonwealth Edison Company, MGE, Marquette Board of Public Utilities, NSP-
Wisconsin, Upper Peninsula Power Company, WPL, WPPI, and WPS. WEPCO is a member
of MAIN and is a participant in the Midwest ISO.
4. Wisvest Corporation.
Wisvest Corporation ("Wisvest") is a wholly owned subsidiary of
Wisconsin Energy. Through its own wholly owned subsidiary, Wisvest-Connecticut,
L.L.C. ("Wisvest-Connecticut"), Wisvest owns an indirect 100 percent interest in
certain generating facilities
_____________________
/14/ Letter from Dale A. Landgren to Secretary David P. Boergers, Dated December
29, 1999 (Docket No. EC98-24).
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formerly owned by United Illuminating Company./15/ The Commission has authorized
Wisvest-Connecticut to engage in sales of electric energy at wholesale and sales
of ancillary services at market-based rates within the energy market
administered by ISO-New England, Inc./16/ Wisvest-Connecticut is an "exempt
wholesale generator" as defined in Section 32 of PUHCA.
5. Minergy Corporation.
Minergy Corp. ("Minergy") is a wholly owned subsidiary of Wisconsin
Energy engaged in the business of marketing technologies designed to convert
high-volume industrial and municipal waste into value-added products. Through a
wholly owned subsidiary, Minergy Neenah, L.L.C. ("Minergy Neenah"), Minergy owns
an indirect 100 percent interest in a facility that recycles paper mill sludge
into glass aggregate and steam. A portion of the steam is sold to a paper mill
for processing and the remainder is used to generate electric energy. The
Commission has authorized Minergy Neenah to engage in sales of electric energy
at wholesale at market-based rates./17/ Minergy Neenah is an "exempt wholesale
generator" as defined in Section 32 of PUHCA.
6. Griffin Power Marketing, L.L.C.
Griffin Power Marketing, L.L.C. ("Griffin Power") is an indirect
wholly owned subsidiary of Wisconsin Energy engaged in the business of brokering
and marketing electric energy and power, natural gas, and other energy services
at wholesale and retail throughout
____________________
/15/ See United Illuminating Co., 86 FERC (P) 62,162 (1999).
/16/ See Wisvest-Connecticut, L.L.C., 86 FERC (P) 61,133 (1999).
/17/ Minergy Neenah, L.L.C., Docket No. ER99-3125-000.
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North America. The Commission authorized Griffin Power to make wholesale sales
of power and at market-based rates in Docket No. ER97-4168-000./18/
III. DESCRIPTION OF AMERICAN TRANSMISSION COMPANY LLC AND ATC MANAGEMENT INC.
A. AMERICAN TRANSMISSION COMPANY LLC.
As noted above, ATCLLC is a Wisconsin limited liability company
created by specific legislative mandate through Act 9. While beginning as an
affiliated transmission company wholly owned by the Participating Entities,
ATCLLC has the capability to evolve into a publicly owned, for-profit, multi-
state transmission company. This could be accomplished through a public stock
offering that would reduce the percentage of ATCLLC's equity that its member
utilities own. ATCLLC also will be able to increase its membership and expand
the scope of its operations by adapting its structure as necessary to encourage
other transmission owners within the region to transfer ownership or operational
control of their facilities to ATCLLC.
The original owners of ATCLLC have agreed not to sell their equity
interests in ATCLLC for a period of three years following the initial day of
operations (January 1, 2001). A participant may, however, offer all or a
portion of its interest to the other participants at ATCLLC's then existing net
book value./19/ Each participant will have the right to purchase the
_______________________
/18/ See Griffin Power Marketing, L.L.C., 81 FERC (P) 61,133 (1997).
/19/ Any participant, however, may transfer its interest to a 100%-owned
affiliate at any time. WPPI will be permitted, if it chooses, to transfer its
interest to another entity owned by its members. Transfers of ownership by
operation of law, such as merger or consolidation, or in connection with the
sale of all or substantially all of the assets of the participant, are also
permitted.
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offered interest to the extent of its pro rata interest. Any participant can
increase the percentage of its ownership if the other participants elect not to
purchase their share of the offered interest.
Act 9 imposes certain ownership and governance requirements on
transmission companies. In accordance with Act 9, ATC Management Inc., the
corporate manager of ATCLLC (see III.B. below) will have no less than 5 and no
more than 14 managers or directors (which may be modified by an unanimous vote
of the managers or directors)./20/ Also as provided in Act 9, at least 4
managers or directors will be independent, i.e., "not directors, employees or
independent contractors of a person engaged in the production, sale, marketing,
transmission or distribution of electricity or natural gas or of an affiliate of
such a person."/21/ Certain statutory restrictions are also placed on the number
of managers or directors that each company can appoint for the ten-year period
after start-up. Act 9 states that each of the following may appoint one manager
or director for a one-year term: (1) each non-transmission utility security
holder that owns ten percent or more of the outstanding voting securities of the
transmission company; (2) each group of non-transmission utility security
holders that, as a group, owns ten percent or more of the outstanding voting
securities; (3) each electric utility, transmission dependent utility and retail
electric cooperative that holds at least five percent equity interest; and (4)
each transmission utility security holder./22/
ATCLLC may not sell or merge its assets with another person unless
they are sold, transferred, or merged on "an integrated basis" and in a manner
that ensures that the
___________________________
/20/ Wis. Stats. (S) 196.485(3m)(c)1.
/21/ Wis. Stats. (S) 196.485(3m)(c)2.
/22/ Wis. Stats. (S) 196.485(3m)(c)3. "Transmission utility security holder"
means "a person that is a security holder of a transmission company, is an
investor-owned transmission utility in the transmission area and has contributed
its transmission facilities to the transmission company." Wis. Stats.
196.485(1)j.
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transmission facilities in Eastern Wisconsin are planned, operated, maintained,
and controlled as a single transmission system./23/ ATCLLC does not seek to
qualify as an independent system operator ("ISO") or RTO. As noted above,
ATCLLC will satisfy Order No. 2000 RTO requirements by joining the Midwest ISO.
As ordained by Act 9, key provisions relating to the structure and
operation of ATCLLC include:
. A requirement to contract back with contributing transmission
owners for operating and maintenance services for at least three
years. Non-supervisory utility employees will have certain job
rights after the three years;/24/
. A requirement to join the Midwest ISO and apply to operate as a
single rate zone under the Midwest ISO tariff for at least six
years;/25/
. A prohibition against bypassing distribution systems and against
providing service to retail customers;/26/
. A prohibition against owning generation or participating in the
wholesale power market (with specific exceptions for procuring or
reselling ancillary services, redispatch or control area
functions);/27/ and
. A requirement that the governing board will consist of
representatives of member entities, and that independent members
will be elected by shareholder vote./28/
The affairs of ATCLLC will be governed by an LLC Operating Agreement,
which will be executed by all of the Participating Entities and any other
utilities that contribute transmission assets or cash to ATCLLC. The LLC
Operating Agreement will also establish the
_______________________________________
/23/ Wis. Stats. (S) 196.485(3m)(a)2.a.
/24/ Wis. Stats. (S) 196.485(3m)(a)1.b.
/25/ Wis. Stats. (S) 196.485(3m)(a)1.d.-f.
/26/ Wis. Stats. (S) 196.485(3m)(a)2.b.
/27/ Wis. Stats. (S) 196.485(3m)(a)2.c.
/28/ Wis. Stats. (S) 196.485(3m)(c).
11
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respective ownership shares of the members, their contribution obligations and
their interest in distributions. As discussed above, the LLC Operating
Agreement will also place certain restrictions on the transfer of members'
interests. Finally, the LLC Operating Agreement will specify that ATC
Management Inc. (also referred to as the "Corporate Manager" or "CM") will
manage the day-to-day operations of ATCLLC.
B. ATC MANAGEMENT INC.
ATC Management Inc. will manage ATCLLC. The CM was organized as a
corporation under Wisconsin law on June 12, 2000. The CM will be a member of
ATCLLC and will be owned by the Participating Entities. All ATCLLC decisions
will be effected through and undertaken by the CM. The CM will employ all
personnel necessary to operate the ATCLLC./29/ All of the CM's costs and
expenses will be treated as ATCLLC expenses.
Prior to its initial date of operation (January 1, 2001), the CM will
amend its articles of incorporation in accordance with the Amended and Restated
Articles of Incorporation, which will provide for two classes of shares: Class
A shares, which will initially be held in substantially the same proportion that
interests are held in ATCLLC, and Class B shares, one of which will be held by
each Wisconsin member of ATCLLC. The Bylaws of the CM establish the right of
the Class B shareholders to elect the Board of Directors of the CM until a
public offering, at which time a majority of the Board would be elected by the
Class A shares held by the public. Until that time, the CM and the Class B
shareholders will enter into shareholders agreements setting forth the
procedures by which those shareholders will elect directors in accordance with
Act 9.
_____________________
/29/ Mr. Jose M. Delgado has been appointed as the Chief Executive Officer of
the CM.
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The diagram below shows the relationship between ATCLLC and the
corporate manager. It also shows the manner in which utilities may transfer
assets or cash in exchange for membership interests in the LLC and the CM.
OWNERSHIP DIAGRAM
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[OWNERSHIP DIAGRAM APPEARS HERE]
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IV. OVERVIEW OF THE PROPOSED DIVESTITURE TRANSACTION.
Edison Sault will transfer the Edison Sault Transmission System to
ATCLLC in exchange for an equity interest in ATCLLC. The Edison Sault
Transmission System will be valued at its "Contribution Value," which generally
is defined as original cost less accumulated depreciation, as adjusted for
deferred taxes, excess deferred taxes and deferred investment tax credits.
Thus, the Edison Sault Transmission System will be valued at its net book
value,/30/ and Edison Sault will contribute along with the Edison Sault
Transmission System, the associated deferred tax reserves and investment tax
credits.
As noted above, the Edison Sault Transmission System consists of
Edison Sault's FERC-jurisdictional transmission assets. Generally, this includes
all of Edison Sault's transmission facilities rated at 50kV and above, including
specifically the following assets:
. Transmission lines (including towers, poles, and conductors);
. Transformers with voltage ratings of 50kV and above;
. Lines providing connections to generation sources and step-up
(plant) substations;
. Radial taps from the transmission system up to, but not including,
the facilities that establish the final connection to distribution
facilities or retail customers;
. Mobile capacitor banks with voltage ratings of 50kV and above;
. Substations that exclusively provide a transmission function;/31/
. Voltage control devices and power flow control devices directly
connected to the transmission system; and
. Certain equipment spares for transmission facilities.
________________________
/30/ Transmission facilities contributed to ATCLLC must be "valued at net book
value determined on the basis of the regulated books of account at the time of
the transfer." Wis. Stats. (S) 196.485(5)(b)7.
/31/ For substations and other facilities that provide both a transmission and
distribution function, Edison Sault will enter into an agreement allowing ATCLLC
to use the transmission portion of the facility.
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The individual physical FERC-jurisdictional Transmission Assets that are the
subject of this filing are listed in Attachment 1 hereto.
Edison Sault will also transfer to ATCLLC related tariffs, contracts,
books, and records. It is presently contemplated that Edison Sault and ATCLLC
will enter into an Asset Contribution Agreement, which will specify the
conveyance documents whereby the underlying real estate and personal property
will be conveyed or assigned to ATCLLC./32/
Act 9 requires that ATCLLC and the contributing utilities structure
the transfer to avoid or minimize material adverse tax consequences to the
public utility affiliate/33/ and, to the extent practicable, ensure that the
structure of the transfer satisfies the requirements of the Internal Revenue
Service for a tax-free transfer. To meet these requirements, Edison Sault may
choose to transfer the Edison Sault Transmission System to ATCLLC by first
transferring the assets to an affiliated company that will ultimately transfer
the Edison Sault Transmission System to ATCLLC.
V. COMMISSION'S PART 33 FILING REQUIREMENTS.
A. APPLICANT'S NAME AND PRINCIPAL PLACE OF BUSINESS.
Edison Sault Electric Company is a Michigan corporation with its
principal place of business at 725 East Portage Avenue, Sault Ste. Marie, MI
49783.
__________________
/32/ Act 9 requires the transfer of certain transmission-related "land rights"
(i.e., rights of way, easements, and fee ownership) to ATCLLC. Wis. Stats. (S)
196.485(5)(c). Edison Sault will transfer to ATCLLC the rights of way
associated with the Edison Sault Transmission System.
/33/ Wis. Stats. (S) 196.485(5)(b)(2)(a) and (b).
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B. NAMES AND ADDRESSES OF THE PERSONS AUTHORIZED TO RECEIVE NOTICES AND
COMMUNICATIONS WITH RESPECT TO THE APPLICATION.
Edison Sault respectfully requests that notices, correspondence, and
other communications concerning this Application be directed to the following
persons:
Antoine P. Cobb
Troutman Sanders LLP
1300 I Street, N.W., Suite 500 East
Washington, D.C. 20005-3314
(202) 274-2950 (telephone)
(202) 274-2994 (facsimile)
Donald Sawruk, President
Edison Sault Electric Company
725 East Portage Avenue
Sault Ste. Marie, MI 49783
(906) 632-2271
C. DESIGNATION OF TERRITORIES SERVED, BY COUNTIES AND STATES.
Edison Sault respectfully requests waiver of the Commission's
requirement in 18 C.F.R. (S) 33.2(c) that it designate territories served. In
the recent Merger NOPR Filing, the Commission proposed to streamline applicants'
filing responsibilities and "eliminate ... unnecessary or inapplicable
information requirements." See IV FERC Stats. & Regs. (Proposed Regulations)
(P) 32,528 at 33,364. No franchises will be transferred as part of the
Divestiture Transaction and, thus, Edison Sault's service territory will not
change. Accordingly, Edison Sault respectfully submits that good cause exists
to grant this request for waiver.
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D. DESCRIPTION OF JURISDICTIONAL FACILITIES.
Edison Sault owns facilities for the production, transmission, and
distribution of electric energy and power. Edison Sault also owns books and
records and has on file with the Commission agreements, rate schedules, and
tariffs pursuant to which it provides transmission service at wholesale. The
individual physical FERC-jurisdictional Transmission Assets that are the subject
of this filing (listed in Attachment 1 hereto) generally consist of the
following:
. Transmission lines (including towers, poles and conductors);
. Transformers with voltage ratings of 50kV and above;
. Lines providing connections to generation sources and step-up (plant)
substations;
. Radial taps that are 50kV or above (up to, but not including, the
facilities that establish the final circuit connection to
distribution facilities for retail customers);
. Mobile capacitor banks with voltage ratings of 50kV and above;
. Substations that exclusively provide a transmission function;
. Associated voltage control devices and power flow control devices
directly connected to the transmission system; and
. Certain equipment spares for transmission facilities.
E. DESCRIPTION OF TRANSACTION AND STATEMENT AS TO CONSIDERATION.
For a detailed description of the transaction and statement as to
consideration, refer to the discussion in Section IV. The consideration for the
Divestiture Transaction will be an amount equal to the net book value of the
Edison Sault Transmission System, as adjusted for deferred taxes, excess
deferred taxes and deferred investment tax credits, taken as an equity ownership
interest in ATCLLC.
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F. DESCRIPTION OF THE FACILITIES TO BE DISPOSED OF, CONSOLIDATED OR
MERGED.
As noted above in Section V.D, the facilities that Edison Sault will
transfer to ATCLLC include the facilities listed in Attachment 1 hereto. The
assets to be transferred also include general and intangible plant assets
associated with Edison Sault's transmission operations, including certain plant
materials, inventory, and operating supplies. These assets include not only
real property, plant assets, and equipment constituting the Edison Sault
Transmission System, but also certain vehicles and other motor-operated
equipment, tools, computers, software, testing equipment, communications
equipment, furniture, and certain other personal property used by Edison Sault
in performing the transmission function. In addition, the Edison Sault
Transmission System includes all tariffs, service agreements, books, and records
that will be necessary for ATCLLC to provide transmission service under the
terms and conditions of the ATCLLC open access transmission tariff.
G. STATEMENT OF THE COST OF THE FACILITIES INVOLVED IN THE TRANSACTION.
Edison Sault respectfully requests waiver of the Commission's
requirement in 18 C.F.R. (S) 33.2(g). As noted above, the "purchase price" for
the Edison Sault Transmission System is equal to the Contribution Value of the
facilities (i.e., the net book value), as adjusted for deferred taxes, excess
deferred taxes, and deferred investment tax credits.
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H. STATEMENT AS TO THE EFFECT OF THE SALE OR TRANSFER UPON ANY CONTRACT
FOR THE PURCHASE, SALE OR INTERCHANGE OF ELECTRIC ENERGY.
As discussed in Section I, supra, the Divestiture Transaction will not
have a detrimental effect on Edison Sault's only transmission customer
(Cloverland), which can continue to receive service as provided under the TCA
from ATCLLC. As discussed herein, Edison Sault will take network integration
transmission service from ATCLLC under the ATCLLC OATT necessary to serve its
load.
I. STATEMENT AS TO THE OTHER REQUIRED REGULATORY APPROVALS.
The following are the other regulatory approvals required in
conjunction with the transfer of jurisdictional assets described in this
Application.
. Edison Sault will require an order from the Commission under
Section 205 of the FPA accepting for filing an Interconnection
Agreement to be negotiated between Edison Sault and ATCLLC;
. Edison Sault will require an order from the Commission to assign,
to amend, or to terminate the Transmission Coordination Agreement
with Cloverland;
. Edison Sault may require approvals from the Securities and Exchange
Commission; and
. Within six (6) months following the filing of this Application,
Edison Sault must file an application for an order from the MPSC
approving the proposed accounting treatment of the Divestiture
Transaction.
J. FACTS SHOWING THAT THE PROPOSED TRANSACTIONS WILL BE CONSISTENT WITH
THE PUBLIC INTEREST.
See Section VI below.
K. BRIEF STATEMENT OF FRANCHISES HELD.
See Section V.C. above.
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L. FORM OF NOTICE.
A form of notice suitable for publication in the Federal Register is
attached to the transmittal letter accompanying this Application. In addition,
an electronic version of this notice on a 3.5-inch computer diskette in
WordPerfect format is enclosed with this filing.
VI. THE DIVESTITURE TRANSACTION IS CONSISTENT WITH THE PUBLIC INTEREST.
The Divestiture Transaction is consistent with the public interest and
therefore should be approved under Section 203 of the FPA./34/ As a general
matter, when reviewing corporate transactions under Section 203 of the FPA, the
Commission has undertaken a public interest evaluation pursuant to the three-
pronged test set forth in the Merger Policy Statement./35/ Under this test, the
Commission examines the proposed transaction's effect on competition, on rates,
and on regulation. Id.
The proposed transaction satisfies the public interest requirements
set forth in the Commission's Merger Policy Statement, as it: (i) will have a
beneficial effect on competition in the electric generation industry and no
adverse impact whatsoever on the regulated transmission
_______________________
/34/ Section 203(a) of the FPA, 16 U.S.C. (S) 824b, states:
No public utility shall sell, lease, or otherwise dispose of ...
its facilities subject to the jurisdiction of the Commission ...
or by any means whatsoever, directly or indirectly merge or
consolidate such facilities or any part hereof with those of any
other person, or purchase, acquire, or take any security of any
other public utility, without first having secured an order of
the Commission authorizing to do so ... After notice and
opportunity for hearing, if the Commission finds that the
proposed disposition, consolidation, acquisition, or control will
be consistent with the public interest it shall approve the same.
/35/ FERC Stats. & Regs. (Regulations Preambles) at 30,116-125. Cambridge
Electric Light Company, et al., 85 FERC (P) 61,217 (1998); New England Power
Company, et al., 82 FERC (P) 61,179 (1998), on reh'g, 83 FERC (P) 61,275 (1998);
Boston Edison Company, 82 FERC (P) 61,311 (1998); Long Island Lighting Company,
82 FERC (P) 61,129 (1998).
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industry; (ii) will have a beneficial or neutral impact on rates; and (iii) will
have no negative
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impact on regulation at either the state or federal level. Moreover, the
proposed transaction furthers the policies reflected in Order Nos. 888 and 889,
and provides a vehicle for Edison Sault (and the other Participating Entities)
to meet the requirements of Order No. 2000.
A. THE TRANSACTION MEETS THE REQUIREMENTS OF THE COMMISSION'S MERGER
POLICY STATEMENT.
As noted above, the Merger Policy Statement, sets forth the regulatory
framework for evaluating proposed transactions under Section 203 of the FPA./36/
Specifically, the Commission examines three factors in analyzing whether a
proposed transaction is consistent with the public interest: (1) the effect on
competition; (2) the effects on rates; and (3) the effect on regulation.
Consideration of these factors, as applied to the facts set forth in the instant
Application, demonstrates that the Divestiture Transaction is consistent with
the public interest and, therefore, the Divestiture Transaction should be
approved by the Commission.
1. Competition Will be Unaffected or Enhanced.
In the recent Merger Filing NOPR, the Commission noted that its
"competitive concerns in any type of merger involving jurisdictional electric
utilities is whether the merger will result in higher prices or reduced output
in electricity markets."/37/ To evaluate this concern, the Merger Policy
Statement sets forth specific questions which parties are required to address in
order to determine if a proposed transaction is "consistent with the public
interest." The fundamental inquiry is: does the merger substantially reduce the
alternatives available to buyers of a product or service, relative to those
existing prior to the merger and will reduction in the alternatives reduce
substantially the degree of competition in the market?
______________________
/36/ See FERC Stats. & Regs. (Regulations Preambles) at 30,116-125.
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The Commission requires that merging parties submit a competitive
screen analysis in answering this question. Because the proposed Divestiture
Transaction does not involve the merger of public utilities, and will not have
any adverse effect on competition in the markets for generation and transmission
services, Edison Sault has not submitted a competitive screen analysis as
described in Appendix A of the Merger Policy Statement. Specifically, there is
no need for a competitive screen analysis because there will be no new
generation market "overlaps" or consolidations resulting from the Divestiture
Transaction. In fact, just the opposite will occur. Because Edison Sault is
going beyond the requirements of Order No. 888 by engaging in a corporate
unbundling transaction, and intends that ATCLLC will transfer operation and
control of the divested transmission facilities to the Midwest ISO (consistent
with requirements of Order No. 2000), generation markets should become less
concentrated. The increase in non-discriminatory transmission access and
availability resulting from the Divestiture Transaction should expand the
geographic scope of relevant generation markets, providing greater sources of
supply.
Furthermore, the Divestiture Transaction does not itself involve any
disposition of generating assets. Therefore, the transaction can have no
negative competitive impact on the generation market, as generation market
shares remain unchanged.
With respect to transmission, ATCLLC will be subject to FERC oversight
regarding transmission rates and the obligation to provide non-discriminatory,
open-access transmission service. Given the greater separation between the
generation and transmission functions, and the lack of any change in generation
market shares, the Divestiture Transaction
________________________________________________________________________________
/37/ Merger Filing NOPR, IV FERC Stats. & Regs. (P) 32,528 at 33,365.
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will have a neutral or beneficial effect on competition and, therefore, should
be approved by the Commission.
2. The Divestiture Transaction Will Have No Adverse Effect on Rates.
Under the Merger Policy Statement, the Commission must determine that
FPA Section 203 applicants' wholesale power and transmission customers will be
protected from adverse rate impacts attributable to a proposed transaction./38/
In this case, no such adverse effects will result from the Divestiture
Transaction.
Although Edison Sault does not have any current OATT customers,
applicable rates for transmission service on those facilities should remain the
same or decline. The rates charged for generation-based ancillary services by
Edison Sault under the WEC Operating Companies' OATT will remain unchanged.
Since ATCLLC's rates for generation-based ancillary services will simply reflect
a pass-through of such costs, and since it will be free to purchase ancillary
services from other suppliers where technically feasible, rates for these
ancillary services will remain the same or decline. In addition, transmission
customers will benefit from ATCLLC's transmission-only business focus from both
a tariff administration and system-planning standpoint.
As discussed above, Edison Sault does have one transmission customer -
Cloverland - who takes service under a pre-Order 888 contract, the TCA. The TCA
provides for the coordinated use of Cloverland's and Edison Sault's transmission
facilities (40kV and above) that are situated "within or immediately adjacent to
the Counties of Luce, Mackinac, Schoolcraft
---------------
/34/ See FERC Stats. & Regs. (Regulations Preambles) at 30,123.
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and Chippewa in the Upper Peninsula of the State of Michigan ..."/39/ The TCA
refers to the joint pool of Cloverland and Edison Sault facilities in or
immediately adjacent to the identified counties as the Coordinated Transmission
System. The purpose of the TCA is stated in section 2.01 of the agreement as
follows:
The Coordinated Transmission System shall provide the transmission
service needs of both parties, and is established in order to obtain the
benefits of coordinated development of transmission service requirements of
both parties and to make unnecessary the construction of duplicating
facilities by either party. For such purposes, each party shall coordinate
its planning for construction of additional Transmission Facilities with
the other party and shall utilize the Coordinated Transmission System so
far as is practical to deliver its power and energy requirements in
accordance with the provisions of this Agreement.
Under the TCA, Cloverland and Edison Sault coordinate the day-to-day
interconnected operations of their respective transmission systems, annually
prepare a five-year load forecast, and plan for the operation of the Coordinated
Transmission System. In addition, the contract requires that each party
contribute annually to the operations and maintenance of the Coordinated
Transmission System, and to the construction of additional facilities if needed.
The financial responsibility of the parties for the Coordinated Transmission
System is determined based on the parties' relative peak loads,/40/ multiplied
by the aggregate dollar investment in the Coordinated Transmission System.
Because Edison Sault is seeking to transfer all of its transmission
facilities that are part of the Coordinated Transmission System under the TCA,
Edison Sault believes that the assignment of the TCA to ATCLLC is an appropriate
option. Cloverland and ATCLLC can coordinate their operations of the
Coordinated Transmission System, and the financial
-------------------
/39/ TCA Preamble. A copy of the TCA is included in Exhibit H.
/40/ Peak load is defined in the TCA to be the amount of demand that each
transmission provider supplies from the Coordinated Transmission System.
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responsibility of Cloverland and ATCLLC for the Coordinated Transmission System
can be determined in the same fashion - based on the parties' relative peak
loads. Edison Sault notes that, at least initially, it will maintain accounting
and property records relative to the administration of the TCA until such time
as ATCLLC is capable of maintaining this data.
3. There Will be No Adverse Effect On Regulation.
Under the Merger Policy Statement, the Commission requires parties to
evaluate the effect on regulation of a merger or other proposed transaction,
both at the federal and state level. The Commission has indicated that it may
set a Section 203 application for hearing if: (1) the merged entity would be
part of a registered holding company and the applicants do not commit to abide
by the Commission's policies on the pricing of non-power goods and services
between affiliates; or (2) the affected state commissions do not have authority
to act on the transactions./41/ Neither of these concerns is raised by this
Application, and the Divestiture Transaction will not adversely affect federal
and state regulation.
The Divestiture Transaction will not have any adverse impact on
federal regulation. First, Edison Sault, the contributor of the assets, will
continue to be fully subject to Commission regulation with respect to all
wholesale sales provided to its existing customers. Second, the transfer of the
Edison Sault Transmission System to ATCLLC will not result in the formation of a
registered holding company, but ATCLLC will be a public utility fully subject to
the jurisdiction of the Commission. Accordingly, there should be no concern
over the Commission's ability to regulate effectively, nor any Ohio Power
concerns as a result of the Divestiture Transaction.
---------------
/41/ See FERC Stats. & Regs. (Regulations Preambles) (P) at 30,124-125.
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Furthermore, with regard to "affected state commissions," the Merger
Policy Statement reflects the Commission's concerns that state regulators should
not be divested of the authority to act on mergers of traditional vertically
integrated utilities with captive retail (as well as wholesale) customers. The
Divestiture Transaction does not involve a merger of vertically integrated
utilities. Upon consummation of the Divestiture Transaction, Edison Sault will
continue to be fully subject to the jurisdiction of MPSC with respect to retail
rates charged by Edison Sault, either as provider of electricity or as a
provider of electric delivery services for unbundled retail electricity
sales./42/
B. THE DIVESTITURE TRANSACTION IS CONSISTENT WITH THE RTO FINAL RULE, AND
ADVANCES COMMISSION POLICY SUPPORTING FUNCTIONAL UNBUNDLING
ARTICULATED IN ORDER NOS. 888 AND 889.
1. Order No. 2000.
Edison Sault believes that its transfer of assets to ATCLLC is
consistent with Order No. 2000, because it will facilitate greater separation of
generation and transmission ownership, and will allow Edison Sault to meet all
of the RTO criteria set out in Order No. 2000 through its membership in the
Midwest ISO. Edison Sault clarifies that, currently, it is not intended that
ATCLLC will necessarily meet all of the requirements of Order No. 2000, nor will
ATCLLC individually seek to be constituted as an RTO. Both Edison Sault and
ATCLLC will meet the requirements of Order No. 2000 through membership in the
Midwest ISO. Accordingly, Edison Sault does not believe it is necessary that the
Commission condition
--------------
/42/ While the MPSC may lose jurisdiction over the transmission component of
Edison Sault's retail sales, that component will continue to be subject to
regulatory scrutiny at FERC, and thus will not fall into any regulatory gap.
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approval of this Section 203 application on ATCLLC itself meeting the
requirements of Order No. 2000.
2. Order No. 888.
In Order No. 888, the Commission determined that functional unbundling
of wholesale generation and transmission services is necessary to implement non-
discriminatory open access transmission service. In doing so, the Commission
stopped short of mandating corporate unbundling, which could include the
establishment of a separate corporate affiliate to manage a utility's
transmission assets. The Commission concluded that "functional unbundling of
wholesale services is necessary to implement non-discriminatory open access
transmission and ... corporate unbundling should not now be required."/43/
ATCLLC's acquisition and operation of the Edison Sault Transmission
System will exceed the functional unbundling requirements of Order No. 888 and
bring with it greater corporate and organizational separation of transmission
from generation. ATCLLC will be responsible for providing all open access
transmission and ancillary services under the ATCLLC OATT. Edison Sault will
remain responsible for obtaining transmission service in order to serve its
retail load. Thus, upon consummation of the Divestiture Transaction, Edison
Sault will become a network transmission customer of ATCLLC and will be required
to secure transmission service from ATCLLC in the same manner as unaffiliated
network transmission customers.
Moreover, the Divestiture Transaction allows for an even greater
separation of Edison Sault's wholesale merchant employees from its transmission
system operations personnel
--------------
/43/ FERC Stats. & Regs. (Regulations Preambles) at 31,654.
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than is required under Order Nos. 888 and 889. Edison Sault will no longer
operate transmission facilities, and ATCLLC's transmission operations will be
managed by a corporate manager (ATC Management Inc.), which will have its own
board of directors.
ATCLLC will not be engaged in the electric power generation business,
and it will contract with Edison Sault and others on the open market to provide
ancillary services on a least-cost basis. ATCLLC will not own local
distribution facilities, and it will arrange for use of local distribution only
to the extent required to provide transmission services to wholesale customers
served at voltages below 50kV (generally) under the ATCLLC OATT. ATCLLC will
focus solely on efficiently and effectively operating and maintaining, and where
necessary expanding, its transmission system, and will be well suited to respond
quickly to customer needs.
In sum, Edison Sault, by transferring all of its transmission
facilities to a separate company and by agreeing to take transmission and
ancillary services under that company's OATT, goes well beyond the Commission's
comparability and functional unbundling requirements set forth in Order Nos. 888
and 889.
VII. REQUEST FOR WAIVER OF CERTAIN FILING REQUIREMENTS UNDER PART 33 OF THE
COMMISSION'S REGULATIONS.
The Commission has granted waiver of certain filing requirements of
Part 33 of its regulations in similar situations, including WEPCO and WPL's
recent applications for authority to transfer their assets to ATCLLC in Docket
Nos. EC00-45-000 and EC00-33-000, respectively. Likewise, the Commission has
not applied its Part 33 requirements to transfers of operational control of
transmission facilities to an ISO despite the literal applicability of Section
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203. See Atlantic City Elec. Co., 76 FERC (P) 61,306 (1996)./44/ Thus, the
Commission has focused on the practical question of whether the applicants have
provided sufficient information to evaluate the proposed disposition. The
information contained in this application provides the Commission with
sufficient information to evaluate Edison Sault's proposal to transfer the
Edison Sault Transmission System to ATCLLC. Accordingly, to the extent deemed
necessary, Edison Sault requests waiver of the Part 33 filing requirements.
VIII. LIST OF EXHIBITS REQUIRED BY PART 33 OF THE COMMISSION'S REGULATIONS, 18
C.F.R. (S) 33.3.
Edison Sault has attached the following exhibits in accordance with
the Part 33 filing requirements, or hereby requests waiver of certain
requirements as follows:
Exhibit A. Copies of All Resolutions of Directors.
As discussed in Section VII above, Edison Sault requests waiver of
this requirement.
Exhibit B. Statement of Intercorporate Relationships.
As discussed in Section VII above, Edison Sault requests waiver of
this requirement.
Exhibit C. Statements A and B, Actual and Pro Forma Balance Sheets and
Plant Schedules.
Attached hereto are copies of the relevant comparative balance sheets
for Edison Sault for the year ending December 31, 1999. To the extent that Part
33 requires additional data, Edison Sault requests waiver of this requirement as
discussed in Section VII above.
--------------
/44/ As noted in the January 15, 1998, filing under Section 203 of the FPA
submitted by the Midwest ISO public utilities in Docket No. EC98-24-000, the
Commission generally has not applied the filing requirements set forth at 18
C.F. R. (S)(S) 33.2 and 33.3 to the transfers of facilities pursuant to the
establishment of an ISO.
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Exhibit D. Statement of All Known Contingent Liabilities Except Minor
Items.
As discussed in Section VII above, Edison Sault requests waiver of
this requirement. In addition, Edison Sault notes that in the Merger Filing
NOPR, the Commission proposed to streamline applicants' filing responsibilities
by, inter alia, eliminating the current Exhibit D filing requirement. See FERC
Stats. & Regs. (P) 32,528 at 33,364. This requirement is somewhat redundant, in
that information with respect to known contingent liabilities is filed in Edison
Sault's FERC Form 1 and, thus, the Commission already has such information in
its files. Accordingly, Edison Sault submits that good cause exists to grant
this request for waiver.
Exhibit E. Statement C, Actual and Pro Forma Income Statements.
Attached hereto are copies of Edison Sault's income statement as
reported in its FERC Form 1 for the year ending December 31, 1999. To the
extent that Part 33 requires additional data, Edison Sault requests waiver of
this requirement as discussed in Section VII above.
Exhibit F. Analysis of Retained Earnings.
Attached hereto are copies of Edison Sault's retained earnings
statement as reported in its FERC Form 1 for the year ending December 31, 1999.
To the extent that Part 33 requires additional data, Edison Sault requests
waiver of this requirement as discussed in Section VII above.
Exhibit G. Copies of All Applications Filed with any Other Federal and
State Regulatory Body in Connection with the Proposed
Transaction and Certified Copies of Each Order Relating
Thereto.
As discussed in Section VII above, Edison Sault requests waiver of
this requirement.
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Exhibit H. Copies of All Contracts with Respect to the Transaction.
Attached hereto as Exhibit H are copies of the Asset Contribution
Agreement, the Shareholders Agreement, the Operating Agreement of American
Transmission Company LLC, and the TCA between Cloverland and Edison Sault. A
complete set of the contracts applicable to this transaction was filed with the
Commission on August 24, 2000, in Docket No. EC00-120-000, as Attachment H to
the section 203 application of SBWGE.
Exhibit I. Maps of Property Being Conveyed, Interconnections, and
Principal Cities Served.
A map of the Edison Sault Transmission System is attached hereto as
Exhibit I. To the extent additional information is required, Edison Sault
requests waiver of this requirement as discussed in Section VII above.
IX. CONCLUSION.
Edison Sault respectfully requests that the Commission expeditiously
authorize the Divestiture Transaction under the terms and conditions set forth
in this Application. In addition, Edison Sault respectfully requests that the
Commission approve the transfer under Section 203 of the FPA by no later than
November 15, 2000. As this Application shows, the Divestiture Transaction is
consistent with the public interest and further facilitates the increasing
efforts to restructure and bring robust competition to the Nation's electric
utility industry.
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Respectfully submitted,
_______________________________
Julie B. Greenisen
Antoine P. Cobb
Melissa L. Pignatelli
Troutman Sanders LLP
1300 I Street, N.W., Suite 500 East
Washington, D.C. 20005-3314
(202) 274-2950 (telephone)
(202) 274-2994 (facsimile)
Attorneys for Edison Sault Electric Company
Dated: August 28, 2000
33
