File No. 70-
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM U-1
APPLICATION/DECLARATION
Under
THE PUBLIC UTILITY HOLDING COMPANY ACT OF 1935
NORTHEAST UTILITIES
174 Brush Hill Avenue
West Springfield, Massachusetts 01089
NU ENTERPRISES, INC.
SELECT ENERGY, INC.
107 Selden Street
Berlin, CT 06037
SELECT ENERGY NEW YORK, INC.
507 Plum Street
Syracuse, New York
(Name of companies filing this statement and address of principal
executive offices)
NORTHEAST UTILITIES
(Name of top registered holding company)
Gregory Butler, Esq.
Senior Vice President, Secretary and General Counsel
Northeast Utilities Service Company
P.O. Box 270
Hartford, Connecticut 06141-0270
(Name of address of agent for service)
The Commission is requested to mail signed copies of all orders, notices
and communications to:
David R. McHale Jeffrey C. Miller
Vice President and Treasurer Assistant General Counsel
Northeast Utilities Service Northeast Utilities Service
Company Company
107 Selden Street 107 Selden Street
Berlin, CT 06037 Berlin, CT 06037
ITEM 1. DESCRIPTION OF PROPOSED TRANSACTIONS
A. Introduction
1. Northeast Utilities ("NU"), a Massachusetts business
trust and registered holding company under the Public
Utility Holding Company Act of 1935, as amended (the "Act"),
NU Enterprises, Inc. ("NUEI"), a wholly-owned non-utility
holding company subsidiary of NU, Select Energy, Inc., a
wholly-owned subsidiary of NUEI ("Select"), and Select
Energy New York, a wholly-owned subsidiary of Select
acquired pursuant to Rule 58 under the Act ("SENY", and
collectively with NU, NUEI and Select, the "Applicants")
request authority:
(A) for NU and NUEI to own Select and SENY as "other
businesses" under Section 9 and 10 of the Act; provided that
the aggregate of all amounts invested or committed to be
invested in Select and SENY for which there is recourse,
directly or indirectly, to NU as of June 30, 2003 will be
deducted from the amount of investments thereafter permitted
to be made by NU pursuant to Rule 58 under the Act (the
"Rule 58 Cap");
(B) for NU and NUEI, from time to time through September
30, 2006 (the "Authorization Period"), to guarantee,
indemnify and otherwise provide credit support (each, a
"Guarantee") up to $750 million (the "Guarantee Limit") in
respect of the debt or obligations of NU's nonutility
subsidiary or affiliate companies (including Select and SENY
and any nonutility subsidiary or affiliate formed or
acquired in accordance with the Act at any time through the
Authorization Period);
(C) for Select and SENY to engage in a broad variety of
energy-related activities generally permissible by the
Commission;
(D) for authority under Rule 53(c), through the Authorization
Period, for NU to utilize the proceeds from the issuance of
equity and debt securities, within the limits specified under
current Commission financing orders (or any order or orders
subsequently issued that extend or renew NU's authorization
under such financing orders), and to issue Guarantees subject
to the Guarantee Limit (in each case in addition to
investments made with existing cash) to finance investments
in exempt wholesale generators, as defined in section 32 of
the Act ("EWGs"), in an aggregate amount of up to $1 billion
("EWG Investment Limit"). The proposed EWG Investment Limit
is equal to approximately 130% of NU's average consolidated
retained earnings for the four quarters ended June 30, 2003
($775 million); and
(E) for authority, to the extent needed, to sell or to
cause any subsidiary to sell or otherwise transfer (i) its
nonutility businesses, (ii) the securities of current
subsidiaries engaged in some or all of these nonutility
businesses or (iii) nonutility investments which do not
involve a subsidiary (i.e. less than 10% voting interest),
in each case to a different subsidiary, and, to the extent
approval is required, authority to acquire the assets of
such businesses, subsidiaries or other then-existing
investment interests.
B. Background - NU and Subsidiaries
1. Northeast Utilities is the parent of a number of
companies comprising the Northeast Utilities system (the
"System") and is not itself an operating company. The System
furnishes franchised retail electric service in Connecticut,
New Hampshire and western Massachusetts through three of
NU's wholly-owned subsidiaries, The Connecticut Light and
Power Company ("CL&P"), Public Service Company of New
Hampshire ("PSNH") and Western Massachusetts Electric
Company ("WMECO" and collectively with CL&P and PSNH, the
"NU Utility Companies"). In addition to their retail
electric service business, the NU Utility Companies together
furnish wholesale electric service to various municipalities
and other utilities throughout the Northeast United States.
In addition, NU owns Holyoke Water Power Company ("HWP"),
a utility for purposes of the Act. HWP owns a 147 megawatt
coal-fired plant in Holyoke, Massachusetts and sells all of
the output of its generation assets indirectly to Select
under a wholesale contract.
2. NU is also the parent of Yankee Energy System, Inc.
("YES"), an exempt gas utility holding company. YES is
primarily engaged in the retail distribution of natural gas
through its wholly-owned subsidiary, Yankee Gas Services
Company ("Yankee Gas"), a Connecticut retail gas
distribution company, and also has several nonutility
subsidiaries.
3. NUEI is a wholly-owned subsidiary of NU. NUEI acts as
the holding company for NU's unregulated businesses. NUEI
has numerous direct and indirect nonutility subsidiaries,
including, along with Select, Northeast Generation Company,
the system's only EWG, Mode 1 Communications, Inc., an
exempt telecommunications company, as defined in section 34
of the Act, Select Energy Services, Inc. (formerly, HEC
Inc.), a nonutility subsidiary whose securities NUEI
acquired pursuant to express Commission authorization (see
Holding Co. Act Release No. 26939, November 12, 1998) and
other "energy-related companies" as defined in Rule 58 under
the Act, such as Northeast Generation Services Company and
E.S. Boulos Company.
4. Select, a Connecticut corporation began active
operation under Rule 58 in 1998. Since that time Select has
engaged in brokering and marketing of energy commodities,
including electricity and natural gas, and sale of energy-
related products and services as permitted under Rule
58(b)(1)(iv) and (v). It engages in a wide variety of
wholesale and retail transactions and is licensed in
approximately 11 states to do energy brokering and
marketing. Select has contracts with major utilities to
provide standard offer service for such utilities'
customers. In connection with electric industry
restructuring and the introduction of competition, Select
has become a major part of NU's business as its revenues
have grown from approximately $29 million in 1998 to
approximately $1.25 billion in 2002. Its projected revenues
for 2003 are approximately $2.5 billion. Select has become a
major participant in energy marketing and brokering in the
Northeast United States. Late in 2001, Select acquired the
securities of Niagara Mohawk Energy Marketing, Inc., an
energy marketing and brokering company in upstate New York,
from Niagara Mohawk Holdings, Inc., pursuant to Rule 58, and
subsequently renamed it Select Energy New York, Inc. As of
June 30, 2003, NU's investment in Select and SENY, including
Guarantees, computed for purposes of Rule 58, aggregated
approximately $735 million of NU's aggregate investment in
Rule 58 companies of $828.3 million. Of that amount,
Guarantees issued for the benefit of Select and SENY made up
approximately $196.8 million and the aggregate amount of
guarantees issued for Rule 58 companies was $215.9 million.
C. Request for Authorization
(i) NU Ownership of Select and SENY pursuant to Section 9 and 10;
Activities of Select and SENY
1. As indicated above, Select and SENY were acquired or
organized and operated pursuant to the provisions of Rule
58. Since 1998, when Select was first organized through the
date hereof, there have been radical changes in the energy
industry, both within NU's service territory and nationally.
2. Mainly as a result of restructuring initiatives in
Connecticut and Massachusetts which resulted in the sale of
most of the generating assets of CL&P and WMECO, Select's
regulated affiliates, the total consolidated capitalization
of NU which was approximately $5.6 billion as of December
31, 1998, was approximately $6.6 billion as of June 30, 2003
(including approximately $1.8 billion in rate reduction
bonds ("RRBs")). RRBs are bonds or notes issued by a special
purpose entity organized by each NU Utility Company pursuant
to state restructuring laws of the state in which the
utility operates (Connecticut, Massachusetts and New
Hampshire). These bonds permit the electric companies to
recover the costs of investments and obligations that cannot
be recouped through market-based rates in a competitive
electricity generation market. These costs are sometimes
known as "transition costs" or "stranded costs." The laws of
the different states permit special purpose entities formed
by electric companies to issue the RRBs which are secured by
the right to receive a portion, which may become all, of the
revenues arising from the transition charge, if doing so
would save money for the electric company's ratepayers. RRBs
are obligations of the special purpose entity and are non-
recourse to the utility which formed the special purpose
entity. This part of NU's capitalization decreases as costs
are recovered. As the energy marketing and brokering
business of Select and SENY grows while the traditional
bases of capitalization in the NU Utility Companies and the
RRBs decrease, the financial constraints of the Rule 58 Cap
could impose significant obstacles to the success of NU's
strategy of increasing its marketing and brokering business.
As of June 30, 2003, NU's investment in Rule 58 companies
aggregated approximately $828.3 million (with investments in
Select and SENY aggregating approximately $735 million)
against a Rule 58 Cap of approximately $1.01 billion. By
seeking to have the ownership of Select and SENY under
section 9 and 10, NU is preserving the current room under
the Rule 58 Cap (approximately $181.8 million) for future
investment in energy-related companies.
3. NU commits that, once an order is received granting
the authorizations sought herein, the aggregate amount
invested in Select and SENY as of June 30, 2003,
approximately $735 million, will continue to count as
investments in energy-related companies for purposes of
computing the available cap investment room under the Rule
58 Cap and will continue to show such amount as investments
in Rule 58 companies on its quarterly filing on Form U-9C-3.
4. Because NU seeks to own Select and SENY outside of
Rule 58, NU also seeks specific authority for Select and
SENY to engage in certain energy services as follows:
(a) (i) the development and commercialization of
electro-technologies related to energy conservation,
storage and conversion, energy efficiency, waste
treatment, greenhouse gas reduction, and similar
innovations, (ii) the ownership, operation, sale,
installation and servicing of refueling, recharging and
conversion equipment and facilities relating to
electric powered vehicles, (iii) the sale of electric
and gas appliances; equipment to promote new
technologies, or new applications for existing
technologies, that use gas or electricity; and
equipment that enables the use of gas or electricity as
an alternate fuel; and the installation and servicing
thereof, (iv) the brokering and marketing of energy
commodities, including but not limited to electricity,
natural or manufactured gas and other combustible
fuels; (v) the production, conversion, sale and
distribution of thermal energy products, such as
process steam, heat, hot water, chilled water, air
conditioning, compressed air and similar products,
alternative fuels; and renewable energy resources; and
the servicing of thermal energy facilities; (vi) the
sale of technical, operational, management, and other
similar kinds of services and expertise, developed in
the course of utility operations in such areas as power
plant and transmission system engineering, development,
design and rehabilitation; construction, maintenance
and operation; fuel procurement, delivery and
management; and environmental licensing, testing and
remediation, (vii) the development, ownership and/or
operation of "qualifying facilities", as defined under
the Public Utility Regulatory Policies Act of 1978, as
amended ("PURPA"), and any integrated thermal, steam
host, or other necessary facility constructed,
developed or acquired primarily to enable the
qualifying facility to satisfy the useful thermal
output requirements of PURPA; (viii) the ownership,
operation and servicing of fuel procurement,
transportation, handling and storage facilities,
scrubbers, and resource recovery and waste water
treatment facilities; (ix) the development and
commercialization of technologies or processes that
utilize coal waste by-products as integral component of
such technology or process; and (x) the rendering of
energy management services and demand-side management
services, in all cases without further Commission
authorization (items i-x above collectively, "Energy
Services");
(b) and a variety of other activities related to its
energy marketing and brokering business, including: (i)
the brokering, marketing and trading of other energy
commodities, including gas and electric transmission
entitlements, weather hedging products, emission
credits and "paper" products in respect of any of the
above, including, but not limited to, hedges, swaps,
forwards, options and the like anywhere in the world,
but request the Commission to reserve jurisdiction on
the provision of such services outside of the United
States, Mexico and Canada, and (ii) the rendering of
energy management services and demand-side management
services anywhere in the world (items i-ii above,
collectively, "Other Activities").
5. Each of the Energy Services are activities enumerated
in Rule 58 and thus are activities functionally related to
the business of being a public utility. Select and SENY also
request authority to engage in the Other Activities. Select
and SENY each represent that it will not make any sales of
energy commodities to customers at retail or otherwise in
any state unless authorized or permitted to do make such
sales under the laws of that state.
6. As industry restructuring in Connecticut,
Massachusetts, New Hampshire and other states has evolved,
many utilities, including the NU Utility Companies have
divested most, if not all of their respective generation
assets (other than PSNH which has divested its nuclear
generation assets but has not yet divested itself of its non-
nuclear generation assets), and many energy systems,
including NU, increased their focus on the marketing and
brokering of energy and related services. As indicated by
the increasing revenues of Select, energy marketing and
brokering activities have become an integral part of NU's
business and its strategy for competing in the restructured
energy industry.
7. Since it adopted Rule 58 the Commission has authorized
other registered holding company systems, (1) to market
energy management services and consulting services outside
the United States anywhere in the world and (2) to engage in
energy commodity marketing and brokering in Canada and
Mexico. (See, e.g. FirstEnergy Corp., Holding Co. Act
Release No. 27694, (June 30, 2003); Cinergy, Holding Co. Act
Release No. 27506 (March 21, 2002)).
8. The authorization sought herein for NU to own Select
and SENY outside the constraints of Rule 58, and for NU and
NUEI to provide credit support to its competitive affiliates
up to the Guarantee Limit (as described below) will enable
Select and NU's other competitive businesses to maintain and
grow their operations as appropriate and necessary to
continue to compete with other energy marketing companies.
No authorization is sought herein for off-balance sheet
financing nor is Select or SENY currently involved in such
financing. Select and SENY neither own nor deal in assets
off balance sheet, and neither exercises control over any
assets that are not fully disclosed.
(ii) Extension and Increase in Guarantee Authority
9. By Commission Order, NU and NUEI are authorized to issue guarantees
and similar forms of credit support or enhancements for the benefit of
NUEI and NUEI's nonutility subsidiaries (including Select and SENY) in
an aggregate amount not to exceed $500 million through June 30, 2004
(Holding Co. Act Release No. 27730, September 30, 2003, the "2003
Order"). The Applicants seek an order herein which would supersede
and replace the authorization granted in the 2003 Order, as
supplemented by any supplemental orders, with an order increasing the
amount of Guarantees which may be issued by NU to the proposed
Guarantee Limit of $750 million (not taking into account obligations
exempt under Rule 45), and also broadening the class of beneficiaries
of such Guaranties to include not just its subsidiaries, as set forth
in the 2003 Order, but also to include nonutility subsidiaries and
affiliate companies, including those nonutility subsidiaries and
affiliates formed or acquired during the Authorization Period
(collectively, the "Nonutility Subsidiaries").
10. Guarantees may take the form of NU or NUEI agreeing to
guarantee, undertake reimbursement obligations or assume
liabilities or other obligations with respect to or act as
surety on, bonds, letters of credit, evidences of
indebtedness, equity commitments, performance and other
obligations undertaken by Select and the other Nonutility
Subsidiaries. Guarantees have become a necessary component
of the energy marketing and brokering business. NU has
provided Guarantees for obligations of Nonutility
Subsidiaries in an aggregate amount of approximately $215.9
million as of June 30, 2003. Such amount can increase or
decrease significantly as a result of the volatility of
energy market prices on which the value of many of the
Guarantees is based. In addition, as the energy marketing
and brokering industry continues to evolve, counterparties
to transactions are more and more likely to require some
form of guaranty from the parent of the marketer or broker.
For example, when the standard offer load of CL&P went out
to bid in 1998 (50% of which was awarded to Select), the
Connecticut Department of Public Utility Control (the
"DPUC") did not generally require that bidders provide
guarantees. This standard offer contract expires at the end
of 2003. As a result of the degradation of the
creditworthiness of many energy trading companies over the
past few years, the Applicants expect that, when the
standard offer service goes out to bid this fall, the DPUC
will require all bidders to provide some sort of guarantee
or assurance of their obligations. If Select is to bid on
this standard offer load NU expects that it will be required
to issue a guarantee.
11. As NU's nonutility operations continue to expand, NU
projects that the need to provide Guarantees will soon
likely exceed $500 million. NU has not had to make any
payment or otherwise perform under any Guarantee it has
issued since it began issuing guarantees for the benefit of
its Nonutility Subsidiaries in 1998, nor have any of the
Nonutility Subsidiaries defaulted on any obligations
requiring NU to perform under a Guarantee. Thus, NU does not
believe that the requested increase from $500 million to $750
million will expose it or the NU Utility Companies to improper risks.
12. Certain of the Guarantees may be in support of
obligations that are not capable of exact quantification. NU
will in these cases determine the exposure under a Guaranty
for purposes of measuring compliance with the Guaranty Limit
by standard industry methods, including estimation of
exposure based on loss experience or projected potential
payment amounts. NU and NUEI represent that the terms and
conditions of Guarantees will be established through arm's-
length negotiations with counterparties based upon current
market conditions. NU and NUEI further undertake that any
Guarantee they issue will be without recourse to any NU
Utility Company. Further, any Guarantees of EWG/FUCO
projects will also be subject to the provisions of Rule 53
and 54, and any Guarantees of energy-related companies
formed under Rule 58 under the Act will also be subject to
the aggregate investment limitation of Rule 58. Any
Guarantees issued for the benefit of Select or SENY will not
be subject to the Rule 58 Cap but will be calculated for purposes
of the Guarantee Limit.
(iii) Increase in EWG Investments
13. NU seeks authorization to invest in EWGs an aggregate
amount of up to $1 billion (inclusive of the current
investment of $449 million in NGC, NU's only EWG). This
amount is in excess of the "safe harbor" provisions of Rule
53(a) (50% of the average consolidated retained earnings for
the previous four quarters). Rule 53(c) provides that, in
connection with a proposal to issue and sell securities to
finance an investment in any EWG, or to guarantee the
securities of any EWG, a registered holding company that is
unable to satisfy the "safe harbor" requirements of
paragraph (a) of rule 53 must "affirmatively demonstrate"
that the proposal: (A) will not have a substantial adverse
impact upon the financial integrity of the registered
holding company system; and (B) will not have an adverse
impact on any utility subsidiary of the registered holding
company, or its customers, or on the ability of State
commissions to protect such subsidiary or customers.
14. In an order issued by the Commission dated March 7,
2000 (the "Rule 53 Order"), the Commission authorized the
investment by NU in EWGs in an amount in excess of the 50%
safe harbor limit set forth in Rule 53 (Holding Co. Act
Release No. 27148). The Commission determined that NU's
financing of its investment in NGC, in an amount not to
exceed $481 million or 83% of its "average consolidated
retained earnings" would not have either of the adverse
effects set forth in Rule 53(c). NU now seeks an increase in
the aggregate amount which NU may invest (as defined in Rule
53), either directly or through its affiliates or
subsidiaries, up to $1.0 billion dollars during the
Authorization Period. The ownership of additional
generation, on satisfactory terms, is important to support
NUEI's energy trading and marketing business. Presently, NU
anticipates that any additional EWGs acquired would be
located in the areas in which these energy services are
provided, mainly in the New England ISO, the PJM and the New
York ISO areas.
15. The proposed EWG Investment Limit represents
approximately 130% of NU's average consolidated retained
earnings for the four quarterly periods ending June 30,
2003. As discussed below in Item 3, the proposed EWG
Investment Limit of $1 billion (A) will not have a
substantial adverse impact upon the financial integrity of
the registered holding company system; and (B) will not have
an adverse impact on any utility subsidiary of the
registered holding company, or its customers, or on the
ability of State commissions to protect such subsidiary or
customers.
(a) EWG Investment Review Procedures
16. NUEI has instituted a formal process for review and
approval of investments by the NUEI companies in EWGs. All
EWGs are subject to a stringent review process to ensure the
alignment of the EWG with the strategic objectives of NU
and the NUEI companies, to demonstrate its economic
viability, and to identify and develop strategies to
mitigate known potential risks.
17. Once a potential investment in an EWG has been
identified, NUEI, or one of its subsidiary companies, will
make a preliminary determination as to whether or not such
EWG investment is consistent with the strategic initiatives
and risk/reward profiles of both NU and NUEI.
18. If an EWG is deemed consistent with these objectives, a
special team ("Investment Team") is formed, comprised of
appropriate marketing and sales, financial, environmental,
engineering, and legal personnel supplemented by outside
resources and expertise such as finance, accounting and
legal. The Investment Team is responsible for the
development of an initial business case ("Initial Business
Case") for the EWG. At minimum, the Initial Business Case
will address:
a) Description of the EWG
b) Preliminary market assessment
c) Technical analysis
d) Initial financial analysis
e) Critical success factors
f) Risks and mitigation strategies
g) Estimated costs (i.e., acquisition costs)
h) Exit strategies
19. Upon completion, the Investment Team presents the
Initial Business Case to NUEI or the appropriate NUEI
subsidiary management for review and a determination if the
EWG is consistent with strategic objectives, and given
identified risks, provides the estimated potential value to
merit further review and thorough detailed due diligence.
20. If the Initial Business Case is approved, the
Investment Team then performs detailed due diligence and a
detailed risk assessment to evaluate the EWG, using
advisors, engineers, environmental consultants, accountants,
tax advisors, attorneys and investment bankers, as
appropriate. The Initial Business Case is then updated to
create a final Business Case ("Final Business Case"). The
Final Business Case is a comprehensive identification and
analysis of the strategic, market, operational and financial
components of the EWG.
21. The detailed economic and risk assessment analysis of
an EWG includes the following components:
Economic Viability of the EWG - Analysis of the economic
viability of the EWG including (as appropriate to the size
of investment) an assessment of the overall industry
environment in which the EWG will operate, the ability of
the EWG to produce electricity at or below long-run marginal
costs in the area in which it is located, and the
creditworthiness of potential power purchasers and other
project counterparties.
Risk Assessment - Evaluation of potential risks and
mitigation strategies for the EWG including:
Political and Regulatory Risk - Analysis of political
and regulatory risks through a review of legislative,
regulatory, permitting, environmental and legal risks
associated with the EWG.
Operating Risk - Due diligence review of operating
assumptions related to the EWG including an analysis of fuel
supply and environmental impacts by personnel with
experience in the technology being evaluated, supplemented
by the use of outside technical consultants, as appropriate.
The analysis takes into consideration mitigation of
operating risks through equipment warranties as well as
business interruption and other forms of insurance.
Operating Risk can further be mitigated through the use of
an experienced operations and management team such as
Northeast Generation Company, an NUEI subsidiary.
Construction Risk - To the extent applicable, a
construction risk due diligence review is performed.
Mitigation measures for any construction risks identified
can include a combination of fixed-price contracts,
milestones and performance guarantees (i.e., guaranteed
efficiencies, capacities and completion dates), backed by
appropriate levels of liquidated damages and insurance
(i.e., start-up coverage as part of builder's risk
coverage). The creditworthiness and history of the
construction contractor is an important consideration in
this regard. Payment and performance bonds can also
provide additional security.
Commercial Risks - In a competitive market, prices are
determined by the economic laws of supply and demand.
Accordingly, NUEI subsidiaries regularly monitor the markets
in which they operate. NUEI seeks to ensure that the EWG
will be capable of producing electricity at competitive
prices in a non-regulated environment. NUEI or appropriate
NUEI subsidiary personnel also assess the underlying
economic parameters in specific markets to assure that there
will be sufficient demand for the output of the EWG.
Financial Risks - NUEI, or its applicable subsidiary,
will seek to mitigate the financial risks associated with an
EWG in various ways including:
- Requiring sufficient quality in project contracts,
creditworthy customers and merchant market participation
that will allow a project to secure the maximum amount of
permanent debt financing for the EWG that is available at a
reasonable cost.
- If non-recourse debt is chosen, debt for the EWG
will be secured solely by its assets, contracts and
revenues, and creditors will have no ability to seek
repayment upon default from NUEI or NU. This method of
financing ensures that NU's exposure to the EWG will be
limited to the amount of its equity commitment, and that the
NU Utility Companies would bear no risk of an EWG's failure
or financial
distress.
- Project debt will be carefully structured to meet
or match the characteristics of a particular EWG. NUEI seeks
to obtain future financing of EWGs with non-recourse debt to
the extent practicable.
Interest Rate Risks - Potential variability of interest
rates is a specific financing risk. This risk can be
mitigated by two strategies, hedging and diversifying.
Hedging techniques that NU and NUEI companies may utilize
would limit the impact that rising interest rates have on
floating debt instruments. Diversification implies that
liabilities will be spread among short- and long-term debt
instruments, as well as fixed and floating interest
obligations.
Legal Risks - Active participation by legal counsel in
contract development and review of investments is used to
mitigate legal risks. Such legal reviews address regulatory
and permitting risks, environmental risks, the adequacy and
enforceability of guarantees and other contractual
undertakings of third parties, the status of title to the
property and equipment, and the obligations inherent in
financing arrangements.
22. Upon completion of the Final Business Case, a summary
of the findings as well as recommendation on whether, and if
so, how to proceed, is presented to NUEI or the applicable
subsidiary's management for approval. Depending on the
magnitude of the EWG investment, approval of NU's senior
management and NU's Board of Trustees may also be necessary.
(iv) Internal Corporate Reorganizations
23. NU currently engages, directly or indirectly through
its Nonutility Subsidiaries, in certain non-utility
businesses. NU seeks authority to engage in internal
corporate reorganizations to better organize its Nonutility
Subsidiaries and investments. No authority is sought under
this heading to make new investments or to change the
organization for the Utility Subsidiaries. "Utility
Subsidiary" for the purposes of this section means the NU
Utility Companies and Yankee Gas.
24. NU requests authority, to the extent needed ,
to sell or to cause any subsidiary to sell or otherwise
transfer (i) such nonutility businesses, (ii) the securities
of current subsidiaries engaged in some or all of these
nonutility businesses or (iii) nonutility investments which
do not involve a subsidiary (i.e. less than 10% voting
interest), in each case to a different subsidiary, and, to
the extent approval is required, NU requests, on behalf of
the subsidiaries, authority to acquire the assets of such
businesses, subsidiaries or other then-existing investment
interests. Alternatively, transfers of such securities or
assets may be effected by share exchanges, share
distributions or dividends followed by contribution of such
securities or assets to the receiving entity. In the
future, following its direct or indirect acquisition of the
securities of new Nonutility Subsidiaries, NU may determine
to transfer such securities or the assets of such Nonutility
Subsidiaries to other subsidiaries as described in this
section. NU may also liquidate or merge Nonutility
Subsidiaries.
25. Such internal transactions would be undertaken in
order to eliminate corporate complexities, to combine
related business segments for staffing and management
purposes, to eliminate administrative costs, to achieve tax
savings, or for other ordinary and necessary business
purposes. NU requests authority to engage in such
transactions, to the extent that they are not exempt under
the Act and rules thereunder, through the Authorization
Period.
26. The transactions proposed under this heading will
not involve the sale, transfer or other disposition of any
utility assets of any Utility Subsidiary to any other
person. The transactions proposed under this heading will
also not involve any change in the corporate ownership of,
or involve any restructuring of, the Utility Subsidiaries.
27. The Commission has given approval for such general
corporate reorganizations in prior cases.
ITEM 2 FEES, COMMISSION AND EXPENSES
1. The fees, commissions and expenses of the Applicants
expected to be paid or incurred, directly or indirectly, in
connection with the transactions described above (other than
costs of additional investments in EWGs) are estimated as
follows:
Northeast Utilities Service Company (Legal, Financial,
Accounting and Other Services):
Not in excess of $25,000
ITEM 3. APPLICABLE STATUTORY PROVISIONS
1. Sections 6(a) and 7 of the Act and Rule 45 thereunder
are applicable to the issuance and sale of NU securities
(including Guarantees). Sections 9(a) and 10 of the Act are
applicable to NU's request for ownership of the securities
of Select and SENY. Sections 32 and Rule 53 are applicable
to the proposed increase in the EWG Investment Limit. To the
extent that the proposed transactions are considered by the
Commission to require authorization, exemption or approval
under any section of the Act or the rules and regulations
other than those set forth above, request for such
authorization, exemption or approval is hereby made.
2. Rule 53(c) provides that, in connection with a proposal
to issue and sell securities to finance an investment in any
EWG, or to guarantee the securities of any EWG, a registered
holding company that is unable to satisfy the requirements
of paragraph (a) of rule 53 must "affirmatively demonstrate"
that the proposal: (A) will not have a substantial adverse
impact upon the financial integrity of the registered
holding company system; and (B) will not have an adverse
impact on any utility subsidiary of the registered holding
company, or its customers, or on the ability of State
commissions to protect such subsidiary or customers.
3. In the past, the Commission has routinely issued orders
under Rule 53(c) permitting other registered holding
companies to finance investments in EWGs and FUCOs in
amounts up to 100% of "average consolidated retained
earnings." More recently, the Commission has
authorized "aggregate investment" limits that are well
above 100% of "consolidated retained earnings." In the more
recent cases, the Commission concluded that the proposed
"aggregate investment" level, although exceeding the 50%
limit in Rule 53(a), was nevertheless a reasonable
commitment of capital for a company the size of the
applicant, based on various pro forma financial ratios. In
reaching this conclusion, the Commission measured the
proposed investment level as a percentage of consolidated
capitalization, consolidated net utility plant, total
consolidated capitalization and the total market value of
the applicant's common stock.
4. As shown below, an EWG Investment Limit for NU of $1
billion favorably compares with the EWG investment limits
authorized for other companies by the Commission and meets
both prongs of Rule 53(c); such investment "(A) will not
have a substantial adverse impact upon the financial
integrity of the registered holding company system; and (B)
will not have an adverse impact on any utility subsidiary of
the registered holding company, or its customers, or on the
ability of State commissions to protect such subsidiary or
customers."
A. Impact Upon the Financial Integrity of the Registered
Holding Company System.
5. The lack of any "substantial adverse impact" on
NU's financial integrity as a result of increased levels of
investments in EWGs can be demonstrated in several ways,
including an analysis of historic trends in NU's
consolidated capitalization ratios and retained earnings and
the market view of NU's securities. Consideration of these
and other relevant factors supports the conclusion that the
issuance of securities and Guarantees by NU to finance
investments in EWGs exceeding the 50% "consolidated retained
earnings" limitation in Rule 53(a)(1) up to $1 billion in
the aggregate will not have any "substantial adverse impact"
on the financial integrity of the NU system.
(i) Other EWG Investments.
6. In 2001, NU made an investment in NGC, an EWG, in the
amount of $469 million, or approximately 78% of its then
current average consolidated retained earnings. NU's
investment has been reduced to approximately $448 million,
or approximately 57.8% of its average consolidated retained
earnings as of June 30, 2003. NGC has consistently
contributed positively to earnings of NU on a consolidated
basis. Specifically, since its acquisition in 2000, NGC has
contributed approximately $119.8 million in aggregate
earnings through June 30, 2003. NGC has been profitable for
each quarter since its acquisition. NGC made a positive
contribution to earnings by contributing $135.4 million in
revenues in the 12-month period ending June 30, 2003 and net
income of $34.6 million for the same period.
(ii) Size of the Investment.
7. In the more recent of the Commission orders granting
relief from the 50% test for EWG investments, the Commission
concluded that the proposed "aggregate investment" level,
although exceeding the 50% limit in Rule 53(a), was
nevertheless a reasonable commitment of capital for a
company the size of the applicant, based on various pro
forma financial ratios. In reaching this conclusion, the
Commission measured the proposed investment level as a
percentage of consolidated capitalization, consolidated net
utility plant, total consolidated capitalization and the
total market value of the applicant's common stock. The
requested $1.0 billion aggregate investment in EWGs would
represent an acceptable commitment of NU's consolidated
capitalization for a company of its size based on such
financial ratios. As of June 30, 2003, the proposed
aggregate investment of up to $1.0 billion would equal
approximately 15.2% of NU's consolidated capitalization
(including $1.8 billion of RRBs), 20.1% of NU's consolidated
net utility plant, 9.4% of NU's total consolidated assets,
and 47.6% of the market value of NU's outstanding common
shares.
8. The following chart illustrates how NU's ratios set
forth above compare to the ratios of the following companies
using the same measurements when they received Commission
orders relieving them from the Rule 53(a)(1) safe harbor
requirements with respect to investments in EWGs and FUCOs:
EWG-FUCO Investment Authorization
As a Percentage of
----------------------------
Consolidated Consolidated Consolidated Market Value
Company Capitalization Net Utility Total Assets of outstanding
Plant Common Stock
----------- -------------- ----------- ------------ --------------
GPU (Nov. 1997) 24.9% 34.2% 19.4% 49.8%
AEP (April 1998) 16.0% 13.8% 9.8% 18.5%
National Grid 46.6% N/A 33.0% 7.8%
(March 2000)
Entergy 18.6% 17.4% 11.7% 43.8%
(June 2000)
Exelon 18.9% 23.3% 11.1% 28.2%
(Dec. 2000)
Cinergy 49.1% 50.5% 27.3% 60.1%
(May 2001)
FirstEnergy 25.0% 35.7% 12.8% 58.8%
(Oct. 2001)
Dominion 25.0% 36.0% 18.0% 39.0%
Resources
(Dec. 2001)
Allegheny 21.0% 19.0% 14.0% 30.0%
Energy
(December 2001)
Xcel Energy
(March 2002) 11.0% 21.8% 8.6% 25.6%
Progress Energy
(July 2002) 24% 37% 19.0% 41.0%
KeySpan 28.6% 48.0% 18.5% 45.0%
(December 2002)
Overall Average 25.7% 30.6% 16.9% 37.8%
NU ($1.0 15.2% 20.2% 10.6% 47.6%
billion
aggregate
proposed
investment;
includes
current
$448 million)
9. This comparison demonstrates that the ratio of NU's
request for an aggregate EWG investment authority of up to
$1.0 billion in each of the above categories falls within
the previously approved range for consolidated
capitalization, net utility plant, total assets and market
values of stock.
(iii) Consolidated Capitalization and Interest Coverage Ratios.
10. NU's senior unsecured debt is currently rated BBB- by
S&P and Baa1 by Moody's, and its consolidated capitalization
ratio as of June 30, 2002 was 34.6% common and preferred
equity and 65.4% debt (including approximately $1.8 billion
in RRBs). When RRBs are not included as debt of NU
consolidated (or included in the capitalization), the ratio
becomes 47.4% common and preferred equity and 52.6% debt.
11. NU commits that it will, at all times during the
Authorization Period, maintain common equity of at least 30%
of its consolidated capitalization (including the RRBs as
debt) as reflected in the most recent Form 10-K or Form 10-Q
filed with the Commission, adjusted to reflect changes in
capitalization since the balance sheet date therein.
(iv) Credit ratings.
12. NU has a corporate investment grade credit rating of
Baa1 from Moody's and BBB+ from Standard and Poor's. It has
received a senior unsecured debt rating of Baa1 and BBB
from Moody's and Standard and Poor's, respectively and BBB
from Fitch.
(v) Retained Earnings Growth.
13. Over the past two years, NU's consolidated retained
earnings have grown. For the year ended December 31, 2000,
NU's consolidated retained earnings were $495.9 million. By
the end of 2001, they had grown by 37% to $678.5 million. By
December 31, 2002, they had grown an additional 12.8% to
765.6. As of June 30, 2003, NU's consolidated retained
earnings were $798.8 million.
B. Impact on NU Utility Companies, Customers, and on the
Ability of State Commissions to Protect such
Subsidiaries or Customers.
1. NU's request to increase its "aggregate investment" in
EWGs to $1 billion in the aggregate will not have an
"adverse impact" on the NU Utility Companies or their
customers, or on the ability of the public service
commissions in Massachusetts, Connecticut and New Hampshire
(collectively, the "State Commissions") to protect the NU
Utility Companies or such customers.
2. The conclusion that neither the NU Utility Companies
nor its customers will be adversely impacted by increased
levels of investment is well-supported by (i) the insulation
of the NU Utility Companies and their customers from
potential direct adverse effects of investments in EWGs;
(ii) analyses of the NU Utility Companies financial
integrity (including ability of CL&P, WMECO and PSNH to
issue senior securities); and (iii) the proven effectiveness
of the State Commissions in protecting ratepayers in their
respective states from any adverse impact.
(i) Insulation from Risk.
3. All of NU's direct or indirect investments in EWGs are
and will be segregated from the NU Utility Companies. None
of the NU Utility Companies will provide financing for,
extend credit to, or sell or pledge its assets directly or
indirectly to any EWG in which NU owns any interest. NU
further commits not to seek recovery in the retail rates of
any Utility Subsidiary for any failed investment in, or
inadequate returns from, an EWG investment.
4. Moreover, to the extent that there may be indirect
impacts on the NU Utility Companies from NU's investments in
EWGs through effects on NU's capital costs, the State
Commissions have the authority and the mechanism to prevent
any adverse effects on the cost of capital due to
investments in EWGs from being passed on to ratepayers.
5. NU has complied and will continue to comply with the
requirements of Rule 53(a)(3) regarding the limitation on
the use of the NU Utility Companies' employees in connection
with providing services to EWGs. Increased levels of
investment in EWGs are not anticipated to have any impact on
utilization of the NU Utility Companies' employees. The NU
Utility Companies have not and will not increase staffing
levels to support the operations of EWGs. There is not
expected to be any significant need for the NU Utility
Companies' personnel to support NU's investments in EWGs.
6. NU and its subsidiaries will comply with the
requirements of Rule 53(a)(3) regarding the limitation on
the use of the NU Utility Companies' employees in connection
with providing services to EWGs. It is contemplated that
project development, management and home office support
functions for the projects will be largely performed by NU
through its subsidiary companies, and by outside consultants
(e.g., engineers, investment advisors, accountants and
attorneys) engaged by NU. NU also will comply with Rule
53(a)(4) regarding the provision of EWG related information
to every federal, state and local regulator having
jurisdiction over the retail rates, as applicable, of the NU
Utility Companies. In addition, NU and its subsidiaries will
comply with all other requirements of Rule 53(a) including
the requirements of 53(a)(2) regarding the preparation and
making available of books and records and financial
statements regarding EWGs.
7. Finally, NU has complied and will continue to comply
with the other conditions of Rule 53(a) providing specific
protections to customers of the NU Utility Companies and its
state commissions, in particular, the requirements of Rule
53(a)(2) regarding the preparation and making available of
books and records and financial reports regarding EWGs and
FUCOs, and the requirements of Rule 53(a)(4) regarding
filing of copies of applications and reports with other
regulatory commissions.
(ii) Credit Ratings.
8. Each of the NU Utility Companies (and Yankee Gas) has
investment grade long-term debt and/or corporate credit
ratings from Moody's, Standard and Poor's and Fitch. The
ratings are as follows:
Standard and
Moody's Poor's Fitch
------- ----------- --------
CL&P
Corporate A3 BBB+ N/R*
Senior Secured A2 A- A-
Senior Unsecured A3 BBB BBB+
Preferred Stock Baa2 BBB- BBB
WMECO
Corporate A3 BBB+ N/R
Senior Unsecured A3 BBB+ BBB+
PSNH
Corporate Baa1 BBB+ N/R
Senior Secured A3 BBB+ BBB+
Yankee Gas
Corporate Baa1 BBB+ N/R
*N/R = Not rated
(iii) Debt/Equity Ratios.
9. In the application/declaration filed by NU and the NU
Utility Companies seeking authorization for it and the NU
Utility Companies to issue short-term debt, NU and the NU
Utility Companies committed that, except in the case of CL&P
and PSNH, NU and the NU Utility Companies would, at all
times during the Authorization Period, maintain common
equity of at least 30% of its consolidated capitalization
(common equity, preferred stock, long-term debt and short-
term debt) as reflected in the most recent Form 10-K or Form
10-Q filed with the Commission, adjusted to reflect changes
in capitalization since the balance sheet date therein. In
the case of CL&P and PSNH, the Commission noted, in Holding
Co. Act Release No. 27147 (March 7, 2000), that both
companies, along with others at that time, would be below
the of 30% ratio when their respective RRBs were included in
the calculation of capitalization. The Commission found that
the effect of being below the 30% test as a result of the
issuance of the RRBs was mitigated because of the
exceptional circumstance of the state's restructuring
legislation, as follows: (1) that CL&P, PSNH and WMECO have
investment grade ratings of BBB-or better; (2) that CL&P,
PSNH and WMECO's financial integrity would not be impaired
by the proposed transaction; (3) that CL&P, PSNH and WMECO
have and will continue to have, adequate cash and access to
working capital facilities to meet and support their normal
business operations; and (4) that the proposed transaction
would be in the public's interest because both investors and
consumers will benefit. NU represents that such factors
continue to be present and will continue through the
Authorization Period. When the impact of RRBs is not
included, each of the NU Utility Companies is well above the
30% threshold. NU commits that it shall and shall cause the
NU Utility Companies to continue to adhere to these
debt/equity ratio requirements if the EWG Investment Limit
is modified as requested herein. The debt (including short-
term debt) as a percentage of each of the NU Utility
Companies' consolidated capitalization, as of June 30, 2003,
is as follows:
Debt/Equity Ratio
(including RRBs as debt)
Debt Equity
------- --------
CL&P 71.2% 28.8%
WMECO 66.8% 33.2%
PSNH 74.0% 26.0%
Debt/Equity Ratio
(does not include RRBs as
debt or in capitalization)
Debt Equity
--------- ---------
CL&P 50.7% 48.3%
WMECO 53.4% 46.6%
PSNH 58.2% 41.8%
(iv) Ability to Fund Operations.
10. Investments in EWGs will not have any negative impact
on the ability of the NU Utility Companies to fund
operations and growth. The NU Utility Companies currently
have financial facilities in place that are adequate to
support their operations. The expectation of continued
strong credit ratings by the NU Utility Companies should
allow them to continue to access the capital markets to
finance their operations and growth.
(v) State Utility Oversight.
11. NU believes that the state utility commission that
regulate the NU Utility Companies are able to protect
utility customers within their respective states.
12. In addition, NU will provide the information required
by Form U5S to permit the Commission to monitor the effect
of NU's EWG investments on NU's financial condition.
13. Finally, none of the three conditions described in Rule
53 (b) exist. Specifically, (1) there has been no bankruptcy
of any NU Subsidiaries; (2) NU's average consolidated
retained earnings for the previous four quarters has not
decreased by 10% from the average for the four quarters
preceding that period; and (3) in the past fiscal year, NU
has not reported operating losses attributable to its direct
or indirect investments in EWGs which exceeded 5% of its
consolidated retained earnings. NU commits to file a post-
effective amendment to this application should any of the
foregoing events occur during the Authorization Period.
C. Quarterly Reporting.
1. To assist the Commission in monitoring the impact of a
higher level of "aggregate investment" in EWGs than is
permitted under Rule 53(a), NU proposes to report on a
quarterly basis in this file the following additional
information:
(i) a computation in accordance with rule 53(a) (as
modified by the Commission's order in this proceeding) of
NU's aggregate investment in EWGs;
(ii) A computation in accordance with rule 53(a)
setting forth NU's "aggregate investment" in EWGs as a
percentage of the following: (i) total consolidated
capitalization; (ii) net utility plant; (iii) total
consolidated assets; and (iv) aggregate market value of NU's
common equity, all as of the end of the quarter.
(iii) consolidated capitalization ratios of NU, CL&P,
WMECO and PSNH as of the end of that quarter, with
consolidated debt to include all short-term debt and non-
recourse debt of the EWG;
(iv) analysis of the growth in consolidated retained
earnings which segregates total earnings growth of NGC from
that attributable to other subsidiaries of NU; and
(v) a statement of revenues and net income for the
EWG for the twelve months ending as of the end of that quarter.
ITEM 4. REGULATORY APPROVAL
1. The proposed transactions are not subject to the
jurisdiction of any state or federal commission other than
this Commission.
ITEM 5. PROCEDURE
1. NU requests that the Commission issue an order as soon
as practicable after the expiration of the applicable public
notice period granting and permitting this Application-
Declaration to become effective.
2. NU waives a recommended decision by a hearing officer
or other responsible officer of the Commission; consents
that the Staff of the Division of Investment Management may
assist in the preparation of the Commission's order; and
requests that there be no waiting period between the
issuance of the Commission's order and its effectiveness.
3. NU hereby undertakes to include in its quarterly
reports on Form U-9C-3 a description of all energy-related
activities conducted outside the United States pursuant to
the authorization requested in this application.
ITEM 6. EXHIBITS AND FINANCIAL STATEMENTS
(a) Exhibits
F Preliminary opinion of counsel*
H Form of notice
(b) Financial Statements
1.1 Northeast Utilities Consolidated Balance Sheets
(unaudited), actual and pro forma, as of June 30, 2003, and
Consolidated Statements of Income, actual and pro forma,
and Statement of Retained Earnings, for the 12 months ended
June 30, 2003 and Statement of Capitalization as of June 30,
2003.
1.2 Northeast Utilities Parent Balance Sheets,
actual and pro forma, as of June 30, 2003, and Statements
of Income, actual and pro forma, and Statement of Retained
Earnings, for the 12 months ended June 30, 2003 and
Statement of Capitalization as of June 30, 2003.
1.3 NU Enterprises, Inc. Consolidated Balance
Sheets (unaudited), actual and pro forma, as of June 30,
2003, and Consolidated Statements of Income, actual and pro
forma, and Statement of Retained Earnings, for the 12 months
ended June 30, 2003 and Statement of Capitalization as of
June 30, 2003.
Item 7. Information as to Environmental Effects
(a) 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.
*To be filed by amendment.
SIGNATURE
Pursuant to the requirements of the Public Utility
Holding Company Act of 1935, the undersigned company has
duly caused this amended Form U-1 to be signed on its behalf
by the officer indicated below.
Northeast Utilities
NU Enterprises, Inc.
Select Energy, Inc.
Select Energy New York, Inc.
By: /s/ David R. McHale
Name: David R. McHale
Title: Vice President and Treasurer
of Northeast Utilities Service Company
as Agent for the above named companies.
Dated: October 14, 2003
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On January 25, 2002, the Applicants filed an
application/declaration on Form U-1 in File No. 70-10045
seeking similar authorizations from the Commission, though
not on identical terms and not including the request for
authorizations for additional investments in EWG.
Simultaneously with the filing of this Application, the
Applicants will file a letter withdrawing the
application/declaration, as amended, in File 70-10045.
The sale of securities, assets or an interest in other
business to an associate company may, in some cases, be
exempt pursuant to Rule 43(b).
FirstEnergy Corp., Holding Co. Act Release No. 27694
(June 30, 2003); SCANA Corporation, Holding Co. Act Release
No. 27649 (February 12, 2003); Exelon Corporation, Holding
Co. Act Release No. 27545 (June 27, 2002); Energy East,
Inc., Holding Co. Act Release No. 27228 (Dec. 12, 2000);
PowerGen, plc, Holding Co. Act Release No. 27291 (Dec. 6,
2000); NiSource, Inc., Holding Co. Act Release No. 27265
(Nov. 1, 2000); Entergy Corp., Holding Co. Act Release No.
27039 (June 22, 1999).
See The Southern Company, Holding Co. Act Release No.
26501 (Apr. 1, 1996); Central and South West Corporation,
Holding Co. Act Release No. 26653 (Jan. 24, 1997); GPU,
Inc., Holding Co. Act Release No. 26779 (Nov. 17, 1997);
Cinergy Corporation, Holding Co. Act Release No. 26848 (Mar.
23, 1998); American Electric Power Company, Inc., Holding
Co. Act Release No. 26864 (Apr. 27, 1998); New Century
Energies, Inc., Holding Co. Act Release No. 26892 (Feb. 26,
1999); and Entergy Corporation, Holding Co. Act Release No.
27184 (Mar. 15, 2000).
See Exelon Corporation, Holding Co. Act Release No.
27296 (Dec. 8, 2000); FirstEnergy Corp., Holding Co. Act
Release No. 27459 (Oct. 29, 2001); Dominion Resources, Inc.,
Holding Co. Act Release No. 27485 (Dec. 28, 2001); Allegheny
Energy, Inc., Holding Co. Act Release No. 27486 (Dec. 31,
2001); Progress Energy, Inc., Holding Co. Act Release No. 35-
27551, (July 17, 2002); FirstEnergy Corp., Holding Co. Act
Release No. 35-27694 (June 30, 2003); Xcel Energy, Inc.,
Holding Co. Act Release No. 35-27494, (March 7, 2002); and
KeySpan Corp., Holding Co. Act Release No. 35-27612,
(December 6, 2002).
GPU, Inc., Holding Co. Act Release No. 26779 (Nov. 17,
1997); American Electric Power Company, Inc., Holding Co.
Act Release No. 26864 (Apr. 27, 1998); National Grid, plc.,
Holding Co. Act Release 35 No. 27154 (Mar. 15, 2000);
Entergy Corporation, Holding Co. Act Release No. 35-27184
(June 13, 2000); Exelon Corporation, Holding Co. Act Release
No. 27296 (Dec. 8, 2000); Cinergy Corp., Holding Co. Act
Release No. 27400 (May 18, 2001); FirstEnergy Corp., Holding
Co. Act Release No. 27459 (Oct. 29, 2001); Dominion
Resources, Inc., Holding Co. Act Release No. 27485 (Dec. 28,
2001); Allegheny Energy, Inc., Holding Co. Act Release No.
27486 (Dec. 31, 2001); Xcel Energy, Inc., Holding Co. Act
Release No. 35-27494, (March 7, 2002); Progress Energy, Inc.
Holding Co. Act Release No. 35-27551, (July 17, 2002); and
KeySpan Corp., Holding Co. Act Release No. 35-27612,
(December 6, 2002).
The Massachusetts Department of Telecommunications and
Energy ("MDTE") regulates WMECO, the New Hampshire Public
Utility Commission ("NHPUC") regulates PSNH and the
Connecticut Department of Public Utility Control regulates
CL&P. NU has requested letters from the MDTE, the NHPUC and
the DPUC assuring the Commission that they could adequately
protect the customers of the respective NU Utility Companies
operating in their jurisdictions with respect to NU's
proposed investment in EWGs in an amount up to an aggregate
of $1 billion.
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