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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.
FORM U-57
NOTIFICATION OF FOREIGN UTILITY COMPANY STATUS
Filed under section 33(a) of the
Public Utility Holding Company Act of 1935, as amended
SISTEMA ELECTRICO NUEVA ESPARTA C.A.
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(Name of foreign utility company)
CMS ENERGY CORPORATION
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(Name of filing company, if filed on behalf of a foreign utility company)
Item 1
The name and address of the entity claiming foreign utility company status is
Sistema Electrico Nueva Esparta C.A. ("SENECA"), Centro Comercial El Angel -
Local 16, Porlamar (6301) Isla de Margarita, Venezuela. SENECA is a Venezuelan
company which owns a concession right for electric distribution and generation
on Venezuela's Margarita Island. SENECA's concession area is approximately 1,150
square kilometers in the Venezuelan State of Nueva Esparta. At December 31, 1997
it had approximately 86,300 customers. SENECA's electrical transmission and
distribution network, including a submarine cable to the Venezuelan mainland, is
approximately 1,040 kilometers long. SENECA owns and operates 13 substations and
9,510 distribution transformers with combined capacity of 509,630 kVA. SENECA
owns 150MW of diesel fired power generation units. CMS Energy Corporation, a
Michigan corporation and an exempt public utility holding company, will own an
interest in SENECA through intervening subsidiaries CMS Enterprises Company and
CMS Electric and Gas Company, each of which are Michigan corporations. CMS
Electric and Gas Company will hold its interest in SENECA through ENELMAR S.A. a
Venezuelan entity. Persons that will own more than a five percent ownership of
the common stock (voting) of SENECA are:
1
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Person Name Percentage Interest
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CMS Electric and Gas Company 63%
SENECA Workers 20%
Government of Venezuela 10%
Item 2
Consumers Energy Company, a Michigan corporation and combination electric and
gas utility, is also a wholly-owned subsidiary of CMS Energy Corporation.
Consumers Energy Company will not pay any portion of the purchase price for the
ownership interests in SENECA.
EXHIBIT A
The certification required under Section 33(a)(2) of the Public Utility
Holding Company Act from the Michigan Public Service Commission (the
"Certification") is attached hereto. The notice required under the Certification
is also attached hereto.
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SIGNATURE
CMS Energy Corporation has duly caused this statement to be signed on
its behalf by the undersigned thereunto duly authorized.
By: /s/ Michael D. Van Hemert
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Name: Michael D. Van Hemert
Title: Assistant General Counsel
Date: December 1, 1998
3
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Exhibit Index
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<TABLE>
<CAPTION>
Exhibit No. Description
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<S> <C>
99A MICHIGAN CERTIFICATION
99B GLOBAL CERTIFICATION
</TABLE>
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EXHIBIT 99.A
S T A T E O F M I C H I G A N
BEFORE THE MICHIGAN PUBLIC SERVICE COMMISSION
* * * * *
In the matter of the application of )
CMS ENERGY CORPORATION, a Michigan )
corporation, for certification pursuant to) Case No. U-11610
Section 33(a)(2) of the Public Utility )
Holding Company Act of 1935 )
- ------------------------------------------)
At the January 28, 1998 meeting of the Michigan Public Service
Commission in Lansing, Michigan.
PRESENT: Hon. John G. Strand, Chairman
Hon. John C. Shea, Commissioner
Hon. David A. Svanda, Commissioner
ORDER
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On December 23, 1997, CMS Energy Corporation (CMS) filed an application
requesting certification pursuant to Section 33(a)(2) of the Public Utility
Holding Company Act of 1935 (PUHCA), 15 USC 79z-5b.
CMS is an international energy corporation. Its principal subsidiary is
Consumers Energy Company (Consumers), a combination electric and gas utility
located entirely in the state of Michigan.
In its application, CMS points out that although the Commission has
issued 15 certifications pursuant to 15 USC 79z-5b in response to CMS
applications, CMS has made investments in only two foreign utilities. CMS
believes that there are additional potential
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U-11610
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investment opportunities in foreign utility companies throughout the world. In
this application, CMS seeks a Commission certification that will permit it to
pursue additional equity investments in foreign utility companies in 1998, not
to exceed $800 million. CMS agrees to provide the Commission with 30 days'
notice of all investments in increments of $100 million. CMS states that the
$800 million will constitute only 8.4% of CMS's 1997 year end assets.
CMS represents that it is exempt from PUHCA. It further represents that
its foreign investment subsidiaries are or will be foreign utility companies
that are exempt from regulation under PUHCA if every state commission having
jurisdiction over the electric or gas rates of an affiliated public utility
company certifies that the state commission has the authority and resources to
protect the utility's ratepayers and that the commission intends to exercise
that authority. CMS therefore requests that the Commission grant that
certification with respect to Consumers.
CMS states that any investments will remain separate from CMS,
Consumers, and any United States based subsidiaries. CMS asserts that the
proposed transaction will not have any effect on Consumers' day-to-day utility
services or rates and will not have a material detrimental effect on the
financial viability, capital structure, or cost of capital of CMS or Consumers.
It says that no utility assets of Consumers or assets of any Consumers
subsidiary will be pledged or encumbered for this investment. It commits that
CMS and its affiliates will not seek recovery of the direct or indirect costs of
the investments from Michigan ratepayers and that the proposed transaction will
have no effect on the tax revenues of Michigan political subdivisions in which
any structure, facility, or equipment of CMS or its subsidiaries is located. CMS
will make
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U-11610
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available books and records reasonably necessary for the Commission to determine
that Michigan ratepayers are not being adversely affected. It acknowledges that
a grant of certification is not approval of any transaction or a finding that
any transaction is reasonable.
After a review of the application, the Commission finds that it is
appropriate to certify that as to $800 million in foreign investments in 1998,
it has the authority and resources under Michigan law to protect Michigan's
utility ratepayers and that it lends to exercise that authority. The Commission
also finds that ex parte approval is appropriate. The Commission grants the
requested certification while reserving the right to prospectively revoke it, as
PUHCA permits, and on condition that CMS and Consumers not seek to recover from
Michigan ratepayers any direct or indirect costs of the investment in foreign
utilities. Furthermore, the granting of the certification is not approval or
endorsement of any transaction. Finally, each time CMS and its affiliates have
cumulatively invested another $50 million or more in foreign utility
investments, CMS shall provide the Commission with written notice within 30
days.
The Commission FINDS that:
a. Jurisdiction is pursuant to 1909 PA 106, as amended, MCL
460.551 et seq.; MSA 22.151 et seq.; 1919 PA 419, as amended,
MCL 460.51 et seq.; MSA 22.1 et seq.; 1939 PA 3, as amended,
MCL 460.1 et seq.; MSA 22.13(1) et seq.; 1969 PA 306, as
amended, MCL 24.201 et seq.; MSA 3.560(101) et seq.; 15 USC
79z-5b; and the Commission's Rules of Practice and Procedure,
as amended, 1992 AACS, R 460.17101 et seq.
b. With respect to the amount and type of transactions described in
CMS's
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U-11610
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application, the Commission has the authority and resources to
protect ratepayers subject to its jurisdiction and intends to
exercise that authority.
c. Ex parte approval is appropriate.
THEREFORE, IT IS ORDERED that:
A. The certification requested by CMS Energy Corporation pursuant to
15 USC 79z-5b is granted. With respect to the amount and type of
transactions described in the application, the Commission has the
authority and resources to protect ratepayers subject to its
jurisdiction and intends to exercise that authority.
B. Each time CMS Energy Corporation and its affiliates have
cumulatively invested another $50 million or more in foreign
utility investments, CMS Energy Corporation shall provide the
Commission with written notice within 30 days.
The Commission reserves jurisdiction and may issue further orders as
necessary.
Any party desiring to appeal this order must do so in the appropriate
court within 30 days after issuance and notice of this order, pursuant to MCL
462.26; MSA 22.45.
MICHIGAN PUBLIC SERVICE COMMISSION
(S E A L) /s/ John G. Strand
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Chairman
By its action on January 28, 1998 /s/ John C. Shea
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Commissioner
/s/ Dorothy Wideman /s/ David A. Svanda
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Its Executive Secretary Commissioner
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U-11610
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[CMS ENERGY LETTERHEAD]
EXHIBIT 99.B
VIA FEDERAL EXPRESS
November 17, 1998
Ms. Dorothy Wideman
Executive Secretary
Michigan Public Service Commission
6546 Mercantile Way
P.O. Box 30221
Lansing, Michigan 48909
RE: CASE NO. U-11610
(GLOBAL CERTIFICATION FOR FOREIGN UTILITY INVESTMENT)
Dear Ms. Wideman:
The purpose of this letter is to provide notice to the Michigan Public
Service Commission (the "Commission") that CMS Energy Corporation ("CMS
Energy"), through its affiliate CMS Electric and Gas Company and various
companies owned by CMS Electric and Gas Company, has made an equity investment
of approximately $56.7 million in Sistema Electrico de Nueva Esparta (SENECA),
an integrated electric distribution facility serving over 90,000 customers on
Venezuela's Margarita Island. Included in the acquisition are 150 megawatts of
diesel-fueled electric generating capacity and a submarine cable connecting the
utility to the Venezuelan mainland. A CMS Energy led consortium acquired a 70
percent ownership interest in SENECA for approximately $63 million. CMS Energy
has a 90 percent interest in the consortium. The remaining 10 percent is owned
by two Venezuelan companies, Casa Paris S.A. and Consultores Occidentales S.A.
The transaction closed on October 19, 1998.
This letter will also provide notice that CMS Energy through its affiliates
has been from time to time during 1998 acquiring on the open market common stock
of Compania Forca e luz Cataguezes - Leopoldina ("Cataguezes") a Brazilian
electric distribution company. CMS Energy acquired an interest in Cataguazes in
January 1998 pursuant to the Commission's November 7, 1997 order in Case No.
U-11559. Total purchases of Cataguezes common stock on the open market
subsequent to CMS Energy's January investment amount to approximately $19.2
million. Further, CMS Energy through its affiliates has also acquired on the
open market shares of the capital stock of Empresa Energetica de Sergipe S.A.
("Sergipe") a Brazilian electric distribution company. CMS
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acquired an interest in Sergipe in January 1998 pursuant to the Commission's
December 12, 1997 order in Case No. U-11593. Total purchases of Sergipe capital
stock on the open market subsequent to CMS Energy's January investment amount to
approximately $11 million.
This notice is provided pursuant to the Commission's ex parte Order issued
on January 28, 1998 in Case NO. U-11610 (the "Order") that allows CMS Energy to
make up to $800 million in foreign utility investments in 1998. The Order
requires CMS Energy to provide written notice to the Commission when it and its
affiliates have cumulatively invested another $50 million or more in foreign
utility investments. Such notice shall be provided within 30 days of the
investment.
Should you have any questions regarding the above referenced investment or
this notice, please do not hesitate to contact the undersigned at the number
referred to above.
Very truly yours,
/s/ Robert C. Shrosbree
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Robert C. Shrosbree
RCS/sw
