File No. 70-8733
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Amendment No. 8
(Post-Effective Amendment No. 5)
to
APPLICATION OR DECLARATION
on
FORM U-1
under
The Public Utility Holding Company Act of 1935
THE SOUTHERN COMPANY SOUTHERN MOBILE ENERGY SERVICES
270 Peachtree Street, N.W. ENERGY, INC. HOLDINGS, INC.
Atlanta, Georgia 30303 900 Ashwood Parkway 900 Ashwood Parkway
Suite 500 Suite 450
SOUTHERN ENERGY Atlanta, Georgia 30338 Atlanta, Georgia 30338
NORTH AMERICA,
INC. SEI HOLDINGS, INC.
900 Ashwood Parkway 900 Ashwood Parkway SEI EUROPE, INC.
Suite 500 Suite 500 900 Ashwood Parkway
Atlanta, Georgia 30338 Atlanta, Georgia 30338 Suite 500
Atlanta, Georgia 30338
SOUTHERN ENERGY INTERNATIONAL, INC.
900 Ashwood Parkway
Suite 500
Atlanta, Georgia 30338
(Name of company or companies filing this statement
and addresses of principal executive offices)
THE SOUTHERN COMPANY
(Name of top registered holding company parent of
each applicant or declarant)
Tommy Chisholm, Secretary Thomas G. Boren, President
The Southern Company SEI Holdings, Inc.
270 Peachtree Street, N.W. 900 Ashwood Parkway
Atlanta, Georgia 30303 Suite 500
Atlanta, Georgia 30338
(Names and addresses of agents for service)
The Commission is requested to mail signed copies of all orders,
notices and communications to:
W.L. Westbrook Thomas G. Boren, President
Financial Vice-President SEI Holdings, Inc.
The Southern Company 900 Ashwood Parkway
270 Peachtree Street, N.W. Suite 500
Atlanta, Georgia 30303 Atlanta, Georgia 30338
John D. McLanahan, Esq.
Troutman Sanders LLP
600 Peachtree Street, N.E.
Suite 5200
Atlanta, Georgia 30308-2216
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INFORMATION REQUIRED
Item 1. Description of Proposed Transaction.
1.1 Background. SEI Holdings, Inc. ("Holdings") is a wholly-owned
non-utility subsidiary of The Southern Company ("Southern"), a registered
holding company under the Act. Through Holdings and other direct and indirect
subsidiaries of Holdings, Southern has acquired and currently holds interests in
"exempt wholesale generators" ("EWGs"), as defined in Section 32, and "foreign
utility companies" ("FUCOs"), as defined in Section 33. By order dated February
2, 1996 (Holding Company Act Release No. 26468) (the "Initial Order") in this
proceeding, Holdings is currently authorized, among other things, to acquire the
securities of one or more special-purpose subsidiaries (called "Intermediate
Subsidiaries") organized exclusively for the purpose of acquiring and holding
one or more EWGs or FUCOs or subsidiaries (called "Energy-Related Companies")
which derive or will derive substantially all of their revenues from the
ownership and/or operation of certain categories of non-utility businesses,
namely: "qualifying facilities" (as defined in the Public Utility Regulatory
Policies Act of 1978, as amended); steam production, conversion and
distribution; and brokering and marketing of electricity and other energy
commodities.1 Holdings is also authorized to acquire and hold certain other
kinds of non-utility subsidiaries.2
______________________
1 The Initial Order, as it pertained to power marketing subsidiaries of
Holdings, was modified by order dated September 26, 1996 (Holding Company Act
No. 26581) in File No. 70-8823. Further, certain aspects of the Initial Order,
as it pertains to "Energy-Related Companies," may be superseded upon the
effectiveness of new Rule 58, 17 C.F.R. P. 250.58.
2 Specifically, one subsidiary of Holdings, Southern Energy North America, Inc.
(formerly Southern Electric Wholesale Generators, Inc.) ("Domestic Holdings" in
the Initial Order) is the umbrella company for Holdings' domestic operations,
and another subsidiary, Southern Energy International, Inc. (formerly SEI Newco
1, Inc.) ("Foreign Holdings" in the Initial Order) is the umbrella company for
2
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By supplemental order dated July 17, 1996 (Holding Company Act Release
No. 26543) in this proceeding (the "Supplemental Order"), Holdings and its
subsidiaries were authorized to pay dividends to their parent companies from
time to time through June 30, 1997, out of capital and unearned surplus
(including revaluation reserve) to the extent permitted by applicable law. The
Commission reserved jurisdiction over the payment of dividends out of capital or
unearned surplus by subsidiaries of Holdings that are Energy-Related Companies
which derive substantially all of their revenues from brokering or marketing of
energy and by other categories of Energy-Related Companies that Holdings may be
authorized to acquire by subsequent rule.3
The Supplemental Order also granted Southern, Holdings, Southern Energy
and Mobile Energy Services Holdings, Inc. ("Mobile Energy"), also a wholly-owned
subsidiary of Southern, an extension through June 30, 1997, in which to
consummate certain other proposed transactions relating to (i) the transfer of
Southern Energy's common stock to Holdings, (ii) the transfer of the stock of
certain subsidiaries of Southern Energy to other direct or indirect subsidiaries
of Holdings, and (iii) the issuance by Mobile Energy to Southern of one or more
series of preferred stock and the contribution thereof by Southern to Holdings.
Although the transactions described in (i) and (ii), above, have been
consummated or are expected to be consummated prior to June 30, 1997, MESH has
__________________
Holdings' international operations. Holdings was also authorized to acquire from
Southern the shares of Southern Energy, Inc. (formerly Southern Electric
International, Inc.) ("Southern Energy"), and to acquire the securities of one
or more direct or indirect subsidiaries (called "Special Purpose Subsidiaries")
organized to engage in any of those activities or businesses in which Southern
Energy has previously been authorized to engage.
3 At the time the Supplemental Order was issued, the Commission was considering
a rule proposal, recently adopted as Rule 58, that conditionally exempts the
acquisition of securities of certain categories of "energy-related" companies.
Also pending was an application filed by Holdings to restate its authority with
respect to investments in power and energy brokering and marketing subsidiaries,
which was approved by order dated September 26, 1996 (Holding Company Act
Release No. 26581).
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nor yet issued any shares of preferred stock, and, for various business reasons,
may not be in a position to do so prior to June 30, 1997.
1.2 Proposed Modification to Supplemental Order. Holdings now requests
a modification of and an extension to the Supplemental Order which would permit
Holdings and each current and future subsidiary of Holdings to pay dividends
with respect to the securities of such companies, from time to time through June
30, 2000, out of capital or unearned surplus (including revaluation reserve), to
the extent permitted under applicable law. Holdings requests that the Commission
reserve jurisdiction over the payment of dividends out of capital or unearned
surplus by any current or future subsidiary company of Holdings that derives any
material part of its revenues from the sale of goods, services, electricity or
natural gas to any of Southern's five domestic electric utility subsidiaries4 or
to Southern Company Services, Inc.
The applicants also respectfully request a further extension through
June 30, 1998 to consummate the proposals relating to Mobile Energy's preferred
stock. In all other respects, these transactions will be carried out in
accordance with the terms and conditions contained in the Initial Order and the
Supplemental Order.
Item 2. Fees, Commissions and Expenses.
The additional fees, commissions and expenses to be paid or incurred in
connection with this Post-Effective Amendment are estimated not to exceed
$2,000.
_________________
4 These include Alabama Power Company, Georgia Power Company, Gulf Power
Company, Mississippi Power Company, and Savannah Electric and Power Company.
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Item 3. Applicable Statutory Provisions.
Section 12(c) of the Act and Rule 46 thereunder are applicable to the
proposed payment of dividends out of capital or unearned surplus. Sections 6, 7,
9, 10, and 12(f) of the Act are applicable to the proposed transactions relating
to Mobile Energy's preferred stock. The proposed transactions are also subject
to Rule 54.
Rule 54 Analysis: Rule 54 provides that, in determining whether to
approve a proposed transaction by a registered holding company or subsidiary
thereof other than with respect to an EWG or FUCO, the Commission shall not
consider the effect of the capitalization or earnings of any subsidiary that is
an EWG or FUCO upon the registered holding company system if the requirements of
Rule 53(a), (b) and (c) are satisfied.
Currently, Southern satisfies all of the criteria of Rule 53(a), except
for clause (1). At January 31, 1997, Southern's "aggregate investment" in all
EWGs and FUCOs was approximately $2.524 billion, or about 68.8% of Southern's
"consolidated retained earnings" for the four consecutive quarters ended
December 31, 1996 ($3.671 billion). With respect to Rule 53(a)(1), however, the
Commission has determined that Southern's financing of investments in EWGs and
FUCOs in an amount greater than the amount that would otherwise be allowed by
Rule 53(a)(1), but not greater than 100% of Southern's "consolidated retained
earnings," would not have either of the adverse impacts set forth in Rule 53(c).
See The Southern Company, Holding Company Act Release Nos. 26501 and 26646,
dated April 1, 1996 and January 15, 1997, respectively.
Southern has complied and will continue to comply with the other
requirements of Rule 53(a) regarding the maintenance of books and records, use
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of employees of domestic utility subsidiaries to render services to associate
EWGs and FUCOs, and submission of certain filings under the Act with the
appropriate retail rate regulatory commissions. Further, none of the
circumstances described in Rule 53(b) that would render Rule 53(a) inapplicable
has occurred or exists.
Furthermore, even if the effect of the capitalization and earnings of
EWGs and FUCOs in which Southern has an ownership interest upon the Southern
holding company system are considered, there is no basis for the Commission to
withhold or deny approval for the proposal made in this Post-Effective
Amendment. The action requested in the instant filing (viz. extension of
authorization periods for payment of dividends out of capital and unearned
surplus by certain non-utility subsidiaries and for completion of certain parts
of the internal reorganization of Holdings) would not, by itself, or even
considered in conjunction with the effect of the capitalization and earnings of
Southern's EWGs and FUCOs, have a substantial adverse impact on the financial
integrity of the Southern system, or an adverse impact on Southern's
public-utility subsidiaries, their customers, or the ability of state
commissions to protect such public-utility customers. On the contrary, approval
of the applicants' proposal regarding dividend payments would have a modest
beneficial effect on the Southern system, because it will enable Holdings and
its subsidiaries to pay dividends out of distributable cash generated by EWGs
and FUCOs and certain other categories of non-utility subsidiaries, which
Southern, in turn, could use to reduce outstanding bank borrowings and/or to
fund operations of other subsidiary operations.
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Item 4. Regulatory Approval.
No state commission, and no federal commission other than this
Commission, has jurisdiction over the transaction proposed herein.
Item 5. Procedure.
The applicants request that the Commission's order be issued as soon as
the rules allow, and that there be no thirty-day waiting period between the
issuance of the Commission's order and the date on which it is to become
effective. The applicants hereby waive a recommended decision by a hearing
officer or other responsible officer of the Commission and hereby consent that
the Division of Investment Management may assist in the preparation of the
Commission's decision and/or order in the matter unless such Division opposes
the matters covered hereby.
Item 6. Exhibits and Financial Statements.
(a) Exhibits:
G - Form of Federal Register Notice.
(b) Financial Statements:
Not applicable.
Item 7. Information as to Environmental Effects.
(a) In light of the nature of the proposed transactions, as described
in Item 1 hereof, the Commission's action in this matter will not constitute any
major federal action significantly affecting the quality of the human
environment.
(b) No other federal agency has prepared or is preparing an
environmental impact statement with regard to the proposed transactions.
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SIGNATURE
Pursuant to the requirements of the Public Utility Holding Company Act
of 1935, each of the undersigned companies has duly caused this statement to be
signed on its behalf by the undersigned thereunto duly authorized.
Dated: February 20, 1997
THE SOUTHERN COMPANY
By: /s/Tommy Chisholm
Tommy Chisholm
Secretary
MOBILE ENERGY SERVICES HOLDINGS, INC.
By: /s/Tommy Chisholm
Tommy Chisholm
Secretary
SOUTHERN ENERGY, INC.
By: /s/Tommy Chisholm
Tommy Chisholm
Vice President and Secretary
SEI HOLDINGS, INC.
By: /s/Tommy Chisholm
Tommy Chisholm
Secretary
(Signatures Continued on Next Page)
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SOUTHERN ENERGY NORTH AMERICA, INC.
By: /s/Tommy Chisholm
Tommy Chisholm
Secretary
SEI EUROPE, INC.
By: /s/Tommy Chisholm
Tommy Chisholm
Secretary
SOUTHERN ENERGY INTERNATIONAL, INC.
By: /s/Tommy Chisholm
Tommy Chisholm
Secretary
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EXHIBIT G
FORM OF FEDERAL REGISTER NOTICE
The Southern Company ("Southern"), a registered holding company,
Atlanta, Georgia, SEI Holdings, Inc. ("Holdings"), a wholly-owned non-utility
subsidiary of Southern, Mobile Energy Services Holdings, Inc. ("Mobile Energy"),
a wholly-owned subsidiary of Southern and a holding company within the meaning
of Section 2(a)(7) of the Act, and certain other direct or indirect subsidiaries
of Southern and Holdings, have filed a post-effective amendment to an
application-declaration pursuant to Sections 6, 7, 9(a), 10, 12(c) and 12(f) of
the Act and Rules 46 and 54 thereunder in which they request certain
modifications to the terms of an order issued February 2, 1996 (HCAR No. 26468)
(the "February 1996 Order") and a supplemental order issued July 17, 1996 (HCAR
No. 26543) (the "Supplemental Order") in this proceeding.
Holdings directly and indirectly holds Southern's interests in various
"exempt wholesale generators" and "foreign utility companies. Under the February
1996 Order, Holdings was authorized to acquire, directly or indirectly,
interests in certain other non-utility subsidiaries (called "Energy-Related
Companies") that derive or will derive substantially all of their revenues from
enumerated non-utility activities, and Mobile Energy was authorized to issue and
sell and Holdings to acquire from time to time through December 31, 1996, one or
more series of preferred stock.
The Supplemental Order extended until not later than June 30, 1997, the
date by which Mobile Energy may issue and Holdings acquire the preferred stock,
and also authorized Holdings and its subsidiaries (with certain restrictions) to
pay dividends to their parent companies from time to time through June 30, 1997,
out of capital and unearned surplus (including revaluation reserve), to the
extent permitted under applicable law.
Holdings and Mobile Energy state that the preferred stock transactions
have not been consummated and may not be consummated prior to June 30, 1997.
Accordingly, they now request that the Commission extend until June 30, 1998,
the date by which Mobile Energy may issue and Holdings acquire such preferred
stock. In addition, the applicants request a modification of and extension to
their current authority to pay dividends out of capital and unearned surplus.
Specifically, Holdings, on its own behalf and on behalf of each of its current
and future subsidiaries, requests authority to pay dividends out of capital and
unearned surplus (including revaluation reserve) to their parent companies from
time to time through June 30, 2000, to the extent permitted under applicable
law; provided, however, that the Commission is requested to reserve jurisdiction
over any such dividend payments by any subsidiary of Holdings that derives any
material part of its revenues from the sale of goods, services, electricity or
natural gas to any of Southern's five domestic electric utility subsidiaries or
to Southern Company Services, Inc.
