0000950172-01-500958.txt : 20011018
0000950172-01-500958.hdr.sgml : 20011018
ACCESSION NUMBER: 0000950172-01-500958
CONFORMED SUBMISSION TYPE: U-1/A
PUBLIC DOCUMENT COUNT: 1
FILED AS OF DATE: 20011010
FILER:
COMPANY DATA:
COMPANY CONFORMED NAME: CONECTIV
CENTRAL INDEX KEY: 0001029590
STANDARD INDUSTRIAL CLASSIFICATION: ELECTRIC & OTHER SERVICES COMBINED [4931]
IRS NUMBER: 510377417
STATE OF INCORPORATION: DE
FISCAL YEAR END: 1231
FILING VALUES:
FORM TYPE: U-1/A
SEC ACT: 1935 Act
SEC FILE NUMBER: 070-09607
FILM NUMBER: 1756042
BUSINESS ADDRESS:
STREET 1: 800 KING ST
STREET 2: P O BOX 231
CITY: WILMINGTON
STATE: DE
ZIP: 19899
BUSINESS PHONE: 3024293114
MAIL ADDRESS:
STREET 1: 800 KING ST
STREET 2: P O BOX 231
CITY: WILMINGTON
STATE: DE
ZIP: 19899
U-1/A
1
was260387.txt
AMENDMENT #2
As filed with the Securities and Exchange Commission on October 10, 2001
File No. 070-09607
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
-----------------------------------------
POST-EFFECTIVE AMENDMENT NO. 2
TO FORM U-1
APPLICATION/DECLARATION
UNDER
THE PUBLIC UTILITY HOLDING COMPANY ACT OF 1935
----------------------------------------------------
Conectiv
Delmarva Power & Light Company
Atlantic City Electric Company
800 King Street
Wilmington, DE 19899
(Name of companies filing this statement and
addresses of principal executive offices)
------------------------------------------------------------------
Conectiv
(address above)
(Name of top registered holding company parent of declarant)
----------------------------------
Philip S. Reese
Treasurer
Conectiv
(address above)
(Name and addresses of agents for service)
----------------------------------
The Commission also is requested to send copies of any
communications in connection with this matter to:
John N. Estes III Peter F. Clark
Judith A. Center General Counsel
William C. Weeden Randall V. Griffin
Skadden, Arps, Slate, Meagher & Flom LLP Senior Counsel
1440 New York Avenue, NW Conectiv
Washington, D.C. 20005 (address above)
In its order dated December 28, 2000 ("Order"), the
Commission authorized Conectiv and its subsidiaries, Delmarva Power & Light
Company ("DPL") and Atlantic City Electric Company ("ACE," together with DPL
and Conectiv, "Applicants") to engage in various transactions (collectively,
the "Transaction") relating to the sale of interests in the Peach Bottom
Atomic Power Station Units 2 and 3 ("Peach Bottom"). Conectiv et al., Holding
Co. Act Release No. 27324 (Dec. 28, 2001). In the Order, the Commission
authorized the Applicants to complete ACE's portion of the Transaction no
later than the end of the second quarter of 2001. However, the Applicants were
unable to complete that portion of the transaction by the date specified. They
therefore respectfully request further authority to complete ACE's portion of
the Transaction by no later than December 31, 2001.
There have been no material changes in the facts or
representations set forth in the Form U-1 Application/Declaration on which the
Order was based. The Applicants respectfully request the Commission to issue
as soon as possible an order authorizing Applicants to complete ACE's portion
of the transaction as requested in this post-effective amendment.
Discussion of Rules 53 and 54
Rule 54 promulgated under the Act states that in determining
whether to approve the issue or sale of a security by a registered holding
company for purposes other than the acquisition of an Exempt Wholesale
Generator ("EWG") or a Foreign Utility Company ("FUCO"), or other transactions
by such registered holding company or its subsidiaries other than with respect
to EWGs or FUCOs, the Commission shall not consider the effect of the
capitalization or earnings of any subsidiary which is an EWG or a FUCO upon
the registered holding company system if Rules 53(a), (b), or (c) are
satisfied. As demonstrated below, such rules are satisfied.
Conectiv meets all of the conditions of Rule 53 under the
Act, except for Rule 53(a)(1). By Order dated August 17, 2000, Holding Company
Release No. 35-27213 (the "August 17 Order"), the Commission authorized
Conectiv to invest up to $350 million ("EWG Project Limit") in EWGs. Conectiv
has no investments in FUCOs and does not propose to make any investments in
FUCOs. Conectiv is currently in compliance with the EWG Project Limit, in that
its current aggregate investment in EWGs as of June 30, 2001 equals $156.3
million. Conectiv's EWG investments have not negatively impacted Conectiv's
financial health. Conectiv's consolidated retained earnings grew from ($31.6)
million on June 30, 2000 to $178.5 million on June 30, 2001.
Conectiv will inform the Commission of its investments in
EWGs on an ongoing basis by filing with the Commission, as required by the
August 17 Order, quarterly certificates containing extensive information
specified in the August 17 Order concerning those investments. With respect to
the other requirements of Rule 53:
(i) Conectiv maintains books and records to identify investments
in, and earnings from, each EWG and FUCO in which it
directly or indirectly holds an interest. (A) For each
United States EWG in which Conectiv directly or indirectly
holds an interest:
(1) the books and records for such EWG will be
kept in conformity with United States
generally accepted accounting principles
("GAAP");
(2) the financial statements will be prepared
in accordance with GAAP; and
(3) Conectiv directly or through its
subsidiaries undertakes to provide the
Commission access to such books and
records and financial statements as the
Commission may request.
(B) For each FUCO or foreign EWG which is a majority-owned
subsidiary of Conectiv:
(1) the books and records for such subsidiary
will be kept in accordance with GAAP;
(2) the financial statements for such
subsidiary will be prepared in accordance
with GAAP; and
(3) Conectiv directly or through its
subsidiaries undertakes to provide the
Commission access to such books and
records and financial statements, or
copies thereof in English, as the
Commission may request.
(C) For each FUCO or foreign EWG in which Conectiv owns
50% or less of the voting securities, Conectiv
directly or through its subsidiaries will proceed
in good faith, to the extent reasonable under the
circumstances, to cause:
(1) such entity to maintain books and records
in accordance with GAAP;
(2) the financial statements of such entity to
be prepared in accordance with GAAP; and
(3) access by the Commission to such books and
records and financial statements (or
copies thereof) in English as the
Commission may request and, in any event,
will provide the Commission on request
copies of such materials as are made
available to Conectiv and its
subsidiaries. If and to the extent that
such entity's books, records or financial
statements are not maintained in
accordance with GAAP, Conectiv will, upon
request of the Commission, describe and
quantify each material variation therefrom
as and to the extent required by
subparagraphs (a) (2) (iii) (A) and (a)
(2) (iii) (B) of Rule 53.
(ii) No more than 2% of Conectiv's domestic public utility
subsidiary employees will render any services, directly or
indirectly, to any EWG or FUCO in which Conectiv directly or
indirectly holds an interest.
(iii) Conectiv, in connection with any Form U-1 seeking approval
of EWG or FUCO financing, will submit copies of such Form
U-1 and every certificate filed pursuant to Rule 24 with
every federal, state or local regulator having jurisdiction
over the retail rates of the public utility companies in the
Conectiv holding company system. In addition, Conectiv will
submit to each such commission copies of any amendments to
any Form U-1 seeking approval of EWG or FUCO financing and
any Rule 24 certificates required thereunder, as well as a
copy of Item 9 of Conectiv's Form U5S and Exhibits H and I
thereof (commencing with the Form U5S to be filed for the
calendar year in which the authorization therein requested
is granted).
(iv) None of the provisions of paragraph (b) of Rule 53 render
paragraph (a) of that Rule unavailable for a transaction
requiring Commission approval for the issuance and sale of a
security by Conectiv for purposes other than the acquisition
of an EWG or FUCO or other transactions by Conectiv or its
subsidiaries other than with respect to EWGs or FUCOs.
(A) Neither Conectiv nor any subsidiary of Conectiv
having a book value exceeding 10% of Conectiv's
consolidated retained earnings is the subject of
any pending bankruptcy or similar proceeding.
(B) Conectiv's average consolidated retained earnings
for the four most recent quarterly periods ($79.3
million) represented an increase of $52.5 million
(or 196%) in the average consolidated retained
earnings from the previous four quarterly periods
($26.8 million).
(C) Conectiv did not incur operating losses from direct
or indirect investments in EWGs and FUCOs in 2000
in excess of 5% of Conectiv's December 31, 2000
consolidated retained earnings.
As described above, Conectiv meets all the conditions of Rule 53(a), except
for clause (1). With respect to clause (1), the Commission determined in the
August 17 Order that Conectiv's financing of investments in EWGs in an amount
up to the EWG Project Limit would not have either of the adverse effects set
forth in Rule 53(c). As noted above, Conectiv has no investments in FUCOs and
has no plans to make any such investments.
The August 17 Order was predicated, in part, upon the
assessment of Conectiv's overall financial condition which took into account,
among other factors, Conectiv's consolidated capitalization ratio and the
recent growth trend in Conectiv's retained earnings. As noted in the August 17
Order, at December 31, 1999, Conectiv's common equity as a percentage of total
capitalization ("Common Equity Ratio") was 26.3% due to certain restructuring
charges. As also noted in the August 17 Order, Conectiv expects that the sale
of certain generating assets, including the Peach Bottom assets, and the use
of the proceeds therefrom to retire outstanding debt and preferred equity,
will return its common Equity Ratio to above 30%. Applicants also noted in
connection with the August 17 Order that ACE's Common Equity Ratio will fall
from 37% at December 31, 1999 to 23% due to its issuance of transition bonds
but that they estimate that ACE's Common Equity Ratio will return to a level
higher than 30% by December 31, 2004 as this debt is amortized. Applicants
also noted that DPL's Common Equity Ratio will fall from 36% at December 31,
1999 to approximately 26% as a result of an intrasystem transfer of certain
assets, as mandated by state regulatory initiatives, but that planned sales of
generation assets to non-affiliates, and the use of the proceeds therefrom to
retire outstanding debt and preferred equity, will cause DPL's Common Equity
Ratio to return to above 30%. Since the date of the August 17 Order there have
been no adverse changes that would alter the premises underlying the August 17
Order.
Accordingly, since the date of the August 17 Order, the
capitalization and earnings attributable to Conectiv's investments in EWGs
have not had any adverse impact on Conectiv's financial integrity.
SIGNATURE
Pursuant to the requirements of the Act, the undersigned
companies have duly caused this amended Application/Declaration to be signed
on its behalf by the undersigned hereunto duly authorized.
Dated: October 10, 2001
Conectiv
/s/ Philip S. Reese
-----------------------------
By: /s/ Philip S. Reese
Title: Treasurer
Delmarva Power & Light Company
/s/ Philip S. Reese
-----------------------------
By: /s/ Philip S. Reese
Title: Treasurer
Atlantic City Electric Company
/s/ Philip S. Reese
-----------------------------
By: /s/ Philip S. Reese
Title: Treasurer