-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, Z48+AO/MHHTqZyn9pGHl7977Oe/qmG+HFCabW5+a4ItdDJKYw9DUcAyet5kqbBQo CSxOJ7QhxyyHpwWIlWQE6A== 0000023426-94-000056.txt : 19941101 0000023426-94-000056.hdr.sgml : 19941101 ACCESSION NUMBER: 0000023426-94-000056 CONFORMED SUBMISSION TYPE: POS AMC PUBLIC DOCUMENT COUNT: 4 FILED AS OF DATE: 19941031 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: CONNECTICUT LIGHT & POWER CO CENTRAL INDEX KEY: 0000023426 STANDARD INDUSTRIAL CLASSIFICATION: 4911 IRS NUMBER: 060303850 STATE OF INCORPORATION: CT FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: POS AMC SEC ACT: 1935 Act SEC FILE NUMBER: 070-07543 FILM NUMBER: 94556122 BUSINESS ADDRESS: STREET 1: 707 SELDEN ST CITY: BERLIN STATE: CT ZIP: 06037-1616 BUSINESS PHONE: 2036655000 POS AMC 1 CL&P POST-EFFECTIVE AMENDMENT #1 File No. 70-7543 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 POST-EFFECTIVE AMENDMENT NO. 1 TO FORM U-1 APPLICATION/DECLARATION WITH RESPECT TO CREDIT FACILITY SUBSTITUTION under THE PUBLIC UTILITY HOLDING COMPANY ACT OF 1935 THE CONNECTICUT LIGHT AND POWER COMPANY SELDON STREET BERLIN, CONNECTICUT 06037 (Name of companies filing this statement and address of principal executive office) NORTHEAST UTILITIES (Name of top registered holding company parent of declarant) Robert P. Wax, Esq. Vice President, Secretary and General Counsel Northeast Utilities Service Company P.O. Box 270 Hartford, CT 06141-0270 (Name and address of agent for service) The Commission is requested to mail signed copies of all orders, notices, and communication to David R. McHale Jeffrey C. Miller Manager-Project and Short-Term Finance Assistant General Northeast Utilities Counsel Service Company Northeast Utilities P.O. Box 270 Service Company Hartford, CT 06141-0270 P.O. Box 270 Hartford, CT 06141-0270 I. Description of Proposed Transaction 1. The Connecticut Light and Power Company ("CL&P"), a public utility subsidiary of Northeast Utilities ("NU"), hereby applies under the Public Utility Holding Company Act of 1935 ("Act") for approval of a modification of the order of the Securities and Exchange Commission ("Commission") dated October 24, 1988 (Release No. 35-24734) (the "Order") in this file. 2. In the Order, the Commission approved CL&P's proposed financing of pollution control and/or sewage or solid waste disposal facilities at the Seabrook Station No. 1 nuclear electric generating plant (the "Facilities"). The cost of acquiring, constructing and installing the Facilities was financed by CL&P through its use of the net proceeds from the sale by the Industrial Development Authority of the State of New Hampshire ("IDA") of its pollution control revenue bonds ("Bonds") in the principal amount of $10,000,000. The Bonds were issued pursuant to an Indenture of Trust between the IDA and Baybank Middlesex, as trustee (the "Trustee"), and the proceeds of the issuance of the Bonds were loaned to CL&P pursuant to a Financing Agreement (the "Loan Agreement") between CL&P and the IDA. 3. As set forth in CL&P's Application/Declaration in this file, in order to obtain the benefits of a high quality rating for the Bonds, CL&P's obligations under the Loan Agreement are secured by an irrevocable letter of credit (the "Letter of Credit") in the amount of $10,833,334 issued by Union Bank of Switzerland, New York Branch (the "Bank") in favor of the Trustee. The Letter of Credit secures $10,000,000 of principal amount plus interest in the amount of $833,334 at the maximum rate of 15% per annum for 200 days. The purpose of this filing is to seek authority for CL&P (a) to participate in an amendment to the Reimbursement and Security Agreement dated as of October 1, 1988 between the Company and the Bank ("Agreement") in order (i) to change the expiration date of the Letter of Credit from perpetual to a three-year term ending November 1, 1997 extendible for successive one-year terms thereafter indefinitely with the consent by the Company and the Bank, and (ii) to reduce the annual Letter of Credit fee payable to the Bank and (b) to replace the letter of credit provided by the Bank, as permitted by Section 3.13 of the Loan Agreement, by delivery of a substitute credit facility, consisting of a new letter of credit, and related agreements, to be provided by a substitute bank to be chosen by CL&P ("Substitute Bank"). 4. For corporate, accounting and regulatory reasons, the Bank has approached the Company seeking to eliminate its perpetual obligation to provide the Letter of Credit. The Company is agreeable to revising this obligation to a three-year commitment coupled with an "evergreen" feature whereby, at the request of the Company and with the consent of the Bank, the Letter of Credit can be extended indefinitely for successive one-year terms. The Company believes that were the Bank to not consent to an extension in the future, the Company could obtain a replacement letter of credit on comparable terms without difficultly. 5. In conjunction with the changes mentioned above, the Bank is agreeable to revising the annual Letter of Credit fee the Company must pay, from 0.45% of the Letter of Credit amount to the following percentages, depending on the lower of the Company's bond ratings from time to time as determined by Moody's and Standard and Poor's. Applicable Per Moody's S&P Annum LOC Fee Rate A3 or higher A- or higher 0.35% Baa 1 and Baa 2 BBB+ and BBB 0.40% Baa 3 BBB- 0.55% Baa 1 or below BB+ or below 0.70% or no rating from or no rating from either agency either agency 6. At the Company's present bond rating, Moody's Baa1 and S&P BBB+, respectively, the annual LOC fee would change from 0.45% to 0.40%, representing a reduction of $5,417 per annum. 7. If, as has happened with several other banks providing letters of credit to CL&P, the Bank's credit rating were to deteriorate, the marketability of the Bonds and their effective interest cost to CL&P could be negatively impacted. In addition, the Bank itself may choose not to renew its commitment or CL&P may, for a variety of reasons, seek alternative banks. Accordingly, CL&P seeks authority to replace the Bank's letter of credit with a new letter of credit ("Substitute LOC") to be issued by a new bank ("Substitute Bank"). The Substitute LOC would be issued under a new letter of credit and reimbursement agreement ("New LOC Agreement") substantially identical to the Letter of Credit and Reimbursement Agreement dated as of September 1, 1993 among CL&P, Deutsche Bank AG, New York Branch, Issuing Bank and Agent, and various co-agents and participating banks, as approved by the Commission in File No. 70-8088. 8. Furthermore, CL&P seeks authority hereunder to obtain from time to time new letters of credit from the same or different banks and further extensions and modifications of and replacements for the New LOC Agreement with such banks from time to time during the term of the Bonds supported thereby, in accordance with the provisions of the Loan Agreement and provided that (A) the total amount available to be drawn under any such extended, modified, or replacement letter of credit does not exceed $10,833,334, (B) the annual letter of credit costs applicable to any such extension, modification, or replacement do not exceed 1.00% per annum of the total amount available to be drawn under the extended, modified or replacement letter of credit, (C) the New LOC Agreement applicable to any such extension, modification or replacement shall provide (or shall afford CL&P the option to elect) that tender advances bear interest until paid at a rate not to exceed the higher of (1) the prime rate plus 2.00% or (2) the federal funds rate plus 2.00%, (D) such extension, modification, or replacement is otherwise on terms that are substantially similar in all material respects to those applicable to the New LOC Agreement (or previous extensions or modifications thereof or replacements therefore) proposed to be entered into in connection with the replacement of the Bank, the form of which is incorporated herein as Exhibit B.2, and the Pledge Agreement between CL&P and the bank to be named (Exhibit 101.C to Exhibit B.2), and (E) CL&P shall have obtained all necessary approvals applicable to such extension, modification or replacement. The Commission has previously granted CL&P authority to obtain extensions or modifications of, and replacements for, its letters of credit and reimbursement agreements from time to time during the terms of certain of its pollution control revenue bonds by its Supplemental Order of August 24, 1994 in File No. 70-7320. 9. Except in accordance with the Act, neither NU nor any subsidiary thereof ("Companies") (a) has acquired an ownership interest in an exempt wholesale generator ("EWG") or a foreign utility company ("FUCO") as defined in Sections 32 and 33 of the Act, or (b) now is or as a consequence of the transactions proposed herein will become a party to, or has or will as a consequence of the transactions proposed herein have a right under, a service, sales, or construction contract with an exempt wholesale generator or a foreign utility company. None of the proceeds from the transactions proposed herein will be used by the Companies to acquire any securities of, or any interest in, an exempt wholesale generator or a foreign utility company. The NU system is in compliance with Rule 53(a), (b), and (c), as demonstrated by the following determinations: (i) NU's aggregate investment in EWGs and FUCOs (i.e., amounts invested in or committed to be invested in EWGs and FUCOs, for which there is recourse to NU) does not exceed 50% of the NU system's consolidated retained earnings as reported for the four most recent quarterly periods on NU's Form 10-K and 10-Qs. (ii) Encoe Partners (NU's only EWG or FUCO at this time) maintains books and records, and prepares financial statements in accordance with Rule 53(a)(2). Furthermore, NU has undertaken to provide the Commission access to such books and records and financial statements, as it may request. (iii) No employees of the NU system's public utility companies have rendered services to Encoe Partners. (iv) NU has submitted (a) a copy of each Form U-1 and Rule 24 certificates that have been filed with the Commission under Rule 53 and (b) a copy of Item 9 of Form U5S and Exhibits G and H thereof to each state regulator having jurisdiction over the retail rates of the NU system public utility companies. (v) Neither NU nor any NU subsidiary has been subject of a bankruptcy or similar proceeding unless a plan of reorganization has been confirmed in such proceeding. In addition, NU's average consolidated retained earnings for the four most recent quarterly periods has not decreased by 10% or more from the average for the previous four quarterly periods. (vi) In the previous fiscal year, NU did not report operating losses attributable to its investment in Encoe Partners, unless such losses did not exceed 5 percent of NU's consolidated retained earnings. Item 2. Fees, Commissions and Expenses No fees, commissions or expenses have been paid or will be paid or incurred in connection with the proposed transactions, other than (i) the Commission's $2,000 filing fee, and (ii) expenses for legal, financial and other services billed to CL&P at cost by NUSCO, not to exceed $5,000. Item 4. Regulatory Approval No federal or state regulatory authority, other than the Commission under the Act, and the Connecticut Department of Public Utility Control ("DPUC"), has any jurisdiction over the proposed transactions. Item 5. Procedure It is respectfully requested that the Commission enter not later than December 16, 1994 an appropriate order granting and permitting this Post- Effective Amendment to become effective, and subject, if an approving order of the DPUC has not then been issued, to the issuance of such order. No recommended decision by a hearing officer or other responsible officer of the Commission is necessary or required in this matter. The Office of Public Utility Regulation within the Division of Investment Management of the Commission may assist in the preparation of the Commission's decision in this matter. There should be no 30 day waiting period between the issuance and the effective date of any order issued by the Commission in this matter, and it is respectively requested that any such order be made effective immediately upon the entry thereof. Item 6. Exhibits and Financial Statements (a) Exhibits B.1. Draft of Amendment to Reimbursement and Security Agreement between CL&P and the Bank. (Filed herewith as Exhibit 1 to Exhibit D.1) B.2. Substitute LOC Agreement. (Reference is made to Exhibits B-7 and B-8 set forth in Amendment No. 1 made August 12, 1993 in File No. 70-8088.) D.1. Application to DPUC D.2. DPUC Order (to be filed by amendment.) F.1.1. Opinion of Counsel J.1. Proposed Form of Notice under the Act. (b) Financial Statements. Financial statements have not been included because this transaction is not expected to have pro forma effects on the financial statements of CL&P or the NU system consolidated. Item 7. Information as to Environmental Effects This Post-Effective Amendment relates to revising security arrangements for pollution control financing and as such, it is believed that the granting and permitting to become effective of this Post-Effective Amendment will not constitute a major federal action significantly affecting the quality of the human environment. No other federal agency has prepared or is preparing an environmental impact statement with respect to the proposed transaction. SIGNATURES Pursuant to the requirements of the Public Utility Holding Company Act of 1935, the undersigned company has duly caused this statement to be signed on its behalf by the undersigned thereunto duly authorized. THE CONNECTICUT LIGHT AND POWER COMPANY By: /s/Jeffrey C. Miller Title: Assistant General Counsel Dated: October 31, 1994 EX-99.1 2 EXHIBIT D.1 TO CL&P POST-EFF AMEND NO. 1 Exhibit D.1 October 18, 1994 Mr. Robert J. Murphy Executive Secretary Connecticut Department of Public Utility Control One Central Park Plaza New Britain, CT 06051 Re: Application of The Connecticut Light and Power Company for Modification of Decision with Respect to Approval of Financing for Pollution Control and/or Sewage or Solid Waste Disposal Facilities Docket No. 88-09-01 Dear Mr. Murphy: Enclosed herewith for filing are the original and twenty-two (22) copies of an Application of The Connecticut Light and Power Company (the "Company") for approval by the Connecticut Department of Public Utility Control (the "Department") of a proposed modification of the Decision rendered by the Department in the above-referenced docket. Pursuant to this Application, the Company is seeking authority (i) to change the expiration date of the letter of credit issued to support the pollution control bonds from perpetual to a three-year term ending November 1, 1997, extendible for successive one-year terms thereafter indefinitely with the consent of the Company and the bank, (ii) to reduce the reimbursement fee payable to the bank and (iii) to obtain approval for any further changes in the present letter of credit and replacement of the present and future letters of credit during the term of the bonds supported thereby. Final approval of the Application by the Department is respectfully requested by November 30, 1994. No other orders of regulatory bodies other than the Securities and Exchange Commission under the Public Utility Holding Company Act of 1935 are required in this matter. Please acknowledge receipt of the enclosed Application by stamping the enclosed copy of this letter, and returning it to me with our messenger. Sincerely, /s/Jeffrey C. Miller, Esq. Assistant General Counsel Enclosures cc: (w/encs.) David McHale Kelly Maitland Jane P. Seidl STATE OF CONNECTICUT DEPARTMENT OF PUBLIC UTILITY CONTROL APPLICATION OF THE CONNECTICUT LIGHT AND POWER COMPANY FOR MODIFICATION OF DECISION WITH RESPECT TO APPROVAL OF FINANCING FOR POLLUTION CONTROL AND/OR SEWAGE OR SOLID WASTE DISPOSAL FACILITIES DOCKET NO. 88-09-01 I. Description of Proposed Modification 1. The Connecticut Light and Power Company ("CL&P"), a public service company within the meaning of Section 16-1 of the General Statutes of Connecticut, Revision of 1958, as amended (the "Connecticut General Statutes"), hereby applies to the Department of Public Utility Control (the "Department") pursuant to Section 16-43 of the Connecticut General Statutes for approval of a modification of the Department's decision dated October 19, 1988 (the "Decision") in Docket No. 88-09-01. "Application of The Connecticut Light and Power Company for Approval To Finance Pollution Control and/or Sewage or Solid Waste Disposal Facilities" (the "Application"). Pursuant to Order No. 1 of the Decision, prior approval of the Department is required for any material modifications of the terms and conditions under which the Bonds (as hereinafter defined) were issued and sold. 2. In the Decision, the Department approved CL&P's proposed financing of pollution control and/or sewage or solid waste disposal facilities at the Seabrook Station No. 1 nuclear electric generating plant (the "Facilities"). The cost of acquiring, constructing and installing the Facilities was financed by CL&P through its use of the net proceeds from the sale by the Industrial Development Authority of the State of New Hampshire ("IDA") of its pollution control revenue bonds ("Bonds") in the principal amount of $10,000,000. The Bonds were issued pursuant to an Indenture of Trust between the IDA and Baybank Middlesex, as trustee (the "Trustee"), and the proceeds of the issuance of the Bonds were loaned to CL&P pursuant to a Financing Agreement (the "Loan Agreement") between CL&P and the IDA. 3. As set forth in the Application, in order to obtain the benefits of a high quality rating for the Bonds, CL&P's obligations under the Loan Agreement are secured by an irrevocable letter of credit (the "Letter of Credit") in the amount of $10,833,334 issued by Union Bank of Switzerland, New York Branch (the "Bank") in favor of the Trustee. The purpose of this application for modification of the Decision is to seek authority for CL&P (a) to participate in an amendment to the Reimbursement and Security Agreement dated as of October 1, 1988 between the Company and the Bank ("Agreement") in order (i) to change the expiration date of the Letter of Credit from perpetual to a three-year term ending November 1, 1997 extendible for successive one-year terms thereafter indefinitely with the consent by the Company and the Bank, and (ii) to reduce the annual Letter of Credit fee payable to the Bank and (b) to replace the letter of credit provided by the Bank, as permitted by Section 3.13 of the Loan Agreement, by delivery of a substitute credit facility, consisting of a new letter of credit, and related agreements, to be provided by a substitute bank to be chosen by CL&P ("Substitute Bank"). 4. For corporate, accounting and regulatory reasons, the Bank has approached the Company seeking to eliminate its perpetual obligation to provide the Letter of Credit. The Company is agreeable to revising this obligation to a three-year commitment coupled with an "evergreen" feature whereby, at the request of the Company and with the consent of the Bank, the Letter of Credit can be extended indefinitely for successive one-year terms. The Company believes that were the Bank to not consent to an extension in the future, the Company could obtain a replacement letter of credit on comparable terms without difficultly. 5. In conjunction with the changes mentioned above, the Bank is agreeable to revising the annual Letter of Credit fee the Company must pay, from 0.45% of the Letter of Credit amount to the following percentages, depending on the lower of the Company's bond ratings from time to time as determined by Moody's and Standard and Poor's. Applicable Per Moody's S&P Annum LOC Fee Rate A3 or higher A- or higher 0.35% Baa 1 and Baa 2 BBB+ and BBB 0.40% Baa 3 BBB- 0.55% Baa 1 or below BB+ or below 0.70% or no rating from or no rating from either agency either agency 6. At the Company's present bond rating, Moody's Baa1 and S&P BBB+, respectively, the annual LOC fee would change from 0.45% to 0.40%, representing a reduction of $5,417 per annum. 7. If, as has happened with several other banks providing letters of credit to CL&P, the Bank's credit rating were to deteriorate, the marketability of the Bonds and their effective interest cost to CL&P could be negatively impacted. In addition, the Bank itself may choose not to renew its commitment or CL&P may, for a variety of reasons, seek alternative banks. Accordingly, CL&P seeks authority to replace the Bank's letter of credit with a new letter of credit ("Substitute LOC") to be issued by a new bank ("Substitute Bank"). The Substitute LOC would be issued under a new letter of credit and reimbursement agreement ("New LOC Agreement") substantially identical to the Letter of Credit and Reimbursement Agreement dated as of September 1, 1993 among CL&P, Deutsche Bank AG, New York Branch, Issuing Bank and Agent, and various co-agents and participating banks, as approved by the Department in Docket No. 93-06-23. 8. Furthermore, CL&P seeks authority hereunder to obtain from time to time new letters of credit from the same or different banks and further extensions and modifications of and replacements for the New LOC Agreement with such banks from time to time during the term of the Bonds supported thereby, in accordance with the provisions of the Loan Agreement and provided that (A) the total amount available to be drawn under any such extended, modified, or replacement letter of credit does not exceed $10,833,334, (B) the annual letter of credit costs applicable to any such extension, modification, or replacement do not exceed 1.00% per annum of the total amount available to be drawn under the extended, modified or replacement letter of credit, (C) the New LOC Agreement applicable to any such extension, modification or replacement shall provide (or shall afford CL&P the option to elect) that tender advances bear interest until paid at a rate not to exceed the higher of (1) the prime rate plus 2.00% or (2) the federal funds rate plus 2.00%, (D) such extension, modification, or replacement is otherwise on terms that are substantially similar in all material respects to those applicable to the New LOC Agreement (or previous extensions or modifications thereof or replacements therefore) proposed to be entered into in connection with the replacement of the Bank, the form of which is attached hereto as Exhibit 2, and the Pledge Agreement between CL&P and the bank to be named (Exhibit B to Exhibit 2), and (E) CL&P shall have obtained all necessary approvals applicable to such extension, modification or replacement. The Department has previously granted CL&P authority to obtain extensions or modifications of, and replacements for, its letters of credit and reimbursement agreements from time to time during the terms of certain of its pollution control revenue bonds by its Decision of August 10, 1994 in Docket No. 86-11-10. II. Additional Information The following additional information is supplied as part of this Application: A. The exact legal name of the applicant and its principal place of business: The Connecticut Light and Power Company 107 Selden Street Berlin, Connecticut 06037 CL&P is a corporation specially chartered by the General Assembly of the State of Connecticut. B. The name, title, address and telephone number of the attorney and other person to whom correspondence or communications in regard to this application are to be addressed: Mr. David R. McHale Manager - Project and Short-Term Finance Northeast Utilities Service Company P.O. Box 270 Hartford, Connecticut 06141-0270 Telephone: 665-5601 and Jeffrey C. Miller Assistant General Counsel Northeast Utilities Service Company P.O. Box 270 Hartford, Connecticut 06141-0270 Telephone: 665-3532 C. A concise and explicit statement of facts on which the Department is expected to rely in granting this application: 1. The Bank has offered the Company a meaningful fee reduction if the Company will agree to limit the Bank's obligation to furnish the Letter of Credit to three years, with a continuing 1-year evergreen extension right if both parties agree. Because the Bank's own credit rating remains very high, AAA, the Company continues to enjoy a lower interest rate on the Bonds because of the Letter of Credit and has no desire to replace the Bank at the present time. Similar transactions entered into at this time would be secured with letters of credit issued for a specific term, not perpetual, and the Bank has offered a new annual fee structure which is comparable to and competitive with fees that would be charged by competing banks today. 2. CL&P is also seeking the same kind of flexibility previously granted in the Department's Decision dated August 10, 1994 in Docket No. 86- 11-10 to obtain new letters of credit to support long-term pollution control financings. Since the Bank herein can choose not to extend its commitment beyond a three-year term, CL&P needs the latitude to effect new arrangements within the parameters stated above to seek alternatives if the Bank cannot recommit or does so on uneconomic terms. CL&P agrees to seek competitive choices from letter of credit providers if such a course of action is necessary. D. Explanation of any unusual circumstances involved in this application: The Department's attention is directed to the fact that the modifications proposed hereunder must be approved by the Securities and Exchange Commission (the "SEC") under the Public Utility Holding Company Act of 1935 and that such approval may not be granted until the SEC has received a certified copy of the Decision of this Department. Final approval of this application by the Department is therefore respectfully requested on or before November 30, 1994. III. Exhibits CL&P is filing herewith (or, as indicated, will file by amendment) the exhibits listed in Appendix I hereto. This Application and Appendix I set forth all exhibits required to be filed by CL&P and which CL&P deems necessary or desirable to support the granting of this application. CL&P, however, hereby reserves the right to file such additional testimony and exhibits as it may consider to be necessary or desirable. IV. Requests for Approval CL&P respectfully requests the Department's approval, pursuant to Section 16-43 of the General Statutes of Connecticut, of the transactions described herein. Dated this 18th day of October, 1994. Respectfully submitted, THE CONNECTICUT LIGHT AND POWER COMPANY By /s/Jeffrey C. Miller Assistant General Counsel Northeast Utilities Service Company Its Attorney APPLICATION OF THE CONNECTICUT LIGHT AND POWER COMPANY FOR MODIFICATION OF DECISION WITH RESPECT TO APPROVAL OF FINANCING FOR POLLUTION CONTROL AND/OR SEWAGE OR FACILITIES APPENDIX I - EXHIBITS 1. Draft of Amendment to Reimbursement and Security Agreement between CL&P and the Bank. 2. Substitute LOC Agreement. (Reference is made to Exhibits 5 and 6 set forth in Appendix I to filing made August 6, 1993 in Docket No. 93-06- 23.) 3 Resolutions of Board of Directors of The Connecticut Light and Power Company. (To be filed by amendment.) 4. Estimated Expenses of the Proposed Amendment. (To be filed by amendment.) Exhibit 1 AMENDMENT TO REIMBURSEMENT AND SECURITY AGREEMENT AMENDMENT dated as of July , 1994 between The Connecticut Light and Power Company (the "Company") and Union Bank of Switzerland, New York Branch (the "Bank"). WHEREAS, the parties hereto have entered into a Reimbursement and Security Agreement dated as of October 1, 1988 ([as heretofore amended,] the "Agreement"); and WHEREAS, the parties hereto wish to amend the Agreement in the manner specified below; NOW, THEREFORE, the parties hereto hereby agree as follows: Section 1. Definitions: Interpretation. Each term used herein has the meaning set forth in the Agreement unless otherwise defined herein. References to "hereof", "hereunder" and this "Agreement" and all similar references contained in the Agreement shall during the effectiveness of this Amendment refer to the Agreement as amended hereby. Except as expressly set forth herein, this Amendment shall not amend or waive any provision of the Agreement, and all such provisions are hereby ratified and confirmed in all respects. Section 2. Amendment of the Agreement. (a) Section 1(a) of this Agreement is amended by inserting therein, immediately after the definition of "Adjusted Capitalization", the following new definition: "Applicable LC Fee Rate" means, at any time, the rate per annum set forth below corresponding to the ratings then assigned by Moody's Investors Service Inc. ("Moody's") and Standard & Poors Corporation ("S&P") to the Company's first mortgage bonds (or other senior secured debt) not supported by letters of credit or other credit enhancement facilities, the Applicable LC Fee Rate to change as when such ratings change: Moody's S&P Applicable LC Fee Rate A3 or higher A- or higher 0.35% per annum Baa1 and Baa2 BBB+ and BBB 0.40% per annum Baa3 BBB- 0.55% per annum Ba1 or below BB+ or below 0.70% per annum For purposes of the foregoing, (i) in the event of a split rating, the lower rating shall govern, and (ii) in the event that there is no such rating from either Moody's or S&P, the Applicable LC Fee Rate shall be 0.70% per annum. (b) Section 3(b) of the Agreement is hereby amended by replacing the words "45/100 of 1% per annum" in the clause (ii) thereof with the words "the Applicable LC Fee Rate times". Section 3. Counterparts. This Amendment may be signed in any number of counterparts, each of which shall be an original, with the same effect as if all signatures thereon were upon the same instrument. Section 4. Effectiveness. This Amendment shall become effective as of the date hereof when each party shall have received a counterpart hereof duly executed by the other party. SECTION 5. Governing Law. THIS AMENDMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK (WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES). IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly executed and delivered by their respective officers thereunto duly authorized as of the date first above written. The Connecticut Light and Power Company By Title: Union Bank of Switzerland New York Branch By Title: By Title: , 1994 Ref: Irrevocable Letter of Credit no. 84179 Chemical Bank, as agent for the trustee under Indenture of Trust dated as of October 1, 1988 Dear Sirs: Subject to your approval hereof as requested below, this letter amends our Irrevocable Letter of Credit No. 84179, dated October 27, 1988 and issued in your favor. The first full paragraph on page 4 of the referenced Letter of Credit is hereby amended to read in full as follows: This Letter of Credit shall expire at our close of business at our aforesaid address on the earlier to occur of (i) the Expiration Date (or if the same is not a Business Day, the first Business Day following the Expiration Date) or (ii) the date on which we receive from the Trustee a certificate in form of Annex F hereto. This Letter of Credit shall be promptly surrendered to us by you upon such expiration. The Expiration Date shall be July 1, 1997; provided that, unless this Letter of Credit shall have previously expired, if the Company so requests by Irrevocable written notice to the Bank not more than 90 nor less than 60 days prior to July 1 in any year, the Bank may, in its sole and absolute discretion, elect to extend the Expiration Date by an additional period of one year. Any such extension may be effected only be a written instrument signed by the Bank and specifying the new Expiration Date. If the Bank fails to respond to any such request of the Company, the Bank shall be deemed conclusively to have elected not to consent to such request. Please signify your consent to the foregoing amendment by signing a copy of this letter in the space provided below and returning it to us, whereupon the referenced Letter of Credit shall be amended as set forth above, effective as of the date of this letter. Very truly yours, UNION BANK OF SWITZERLAND NEW YORK BRANCH By By Accepted and agreed to: Chemical Bank, as agent for the trustee under the Indenture of Trust referred to above By EX-5 3 EXHIBIT F.1.1 TO CL&P POST-EFF AMEND NO. 1 Exhibit F.1.1 File No. 70-7543 October 28, 1994 Securities and Exchange Commission 450 Fifth Street, N.W. Washington, D.C. 20549 Re: File No. 70-7543 Application/Declaration by the Connecticut Light and Power Company with Respect to Credit Facility Substitution Ladies and Gentlemen: I am Assistant General Counsel of Northeast Utilities Service Company ("NUSCO"), a service company subsidiary of Northeast Utilities ("NU"), and I am furnishing this opinion in connection with Post-Effective Amendment No. 1 to the Application/Declaration, as amended, on Form U-1 (the "Declaration") of The Connecticut Light and Power Company, a subsidiary of NU ("CL&P" or the "Company"), to the Securities and Exchange Commission in File No. 70-7543 with respect to the amending of a letter of credit and the acquisition of a Substitute LOC and other letter of credit facilities by the Company to secure certain bonds issued to finance the cost of certain pollution control, sewage, and/or solid waste disposal facilities, all as more fully set forth in the Declaration. Capitalized terms used herein and not otherwise defined are used as defined in the Declaration. In connection with this opinion, I have examined the Declaration and the exhibits thereto, and I have examined or caused to be examined such other papers, documents, and records and have made such examination of law and have satisfied myself as to such other matters as I have deemed relevant or necessary for the purpose of this opinion. I have assumed the authenticity of all documents submitted to me as originals, the genuineness of all signatures, the legal capacity of natural persons, and the conformity to originals of all documents submitted to me as copies. Based upon the foregoing, and in the event the proposed transactions contemplated by the Declaration are carried out in accordance therewith, I am of the opinion that (a) Upon receipt of approval from the Connecticut Department of Public Utility Control and compliance with the conditions stated therein, all state laws applicable to CL&P in connection with the proposed transactions will have been complied with; (b) CL&P is validly organized and duly existing under the laws of the State of Connecticut; (c) The debt securities issued by CL&P will, upon compliance with the terms, conditions and provisions applicable to their issuance stated in the governing agreements pertaining thereto, be valid and binding obligations of CL&P in accordance with their terms; and (d) The consummation of the proposed transactions will not violate the rights of the holders of any securities issued by CL&P or any associate thereof. The opinions set forth herein are limited to the laws of the State of Connecticut and the federal laws of the United States. I am a member of the bar of the State of New York. I am not a member of the bar of the State of Connecticut, and do not hold myself out as an expert on the laws of Connecticut, although I have made a study of relevant laws of Connecticut. In expressing opinions about matters governed by the laws of Connecticut, I have consulted with counsel who are employed by NUSCO and are members of the bar of Connecticut. I hereby consent to the use of this opinion in connection with the filing of the Declaration. Very truly yours, /s/Jeffrey C. Miller Assistant General Counsel Northeast Utilities Service Company EX-99.2 4 EXHIBIT J.1 TO CL&P POST-EFF AMEND NO. 1 EXHIBIT J.1 SECURITIES AND EXCHANGE COMMISSION (Release No. 35 - ) Filings Under the Public Utility Holding Company Act of 1935 ("Act") , 1994 The Connecticut Light and Power Company ("CL&P"), Seldon Street, Berlin, Connecticut 06037, an electric utility company subsidiary of Northeast Utilities ("Northeast"), a registered holding company, has filed a post- effective amendment to its Application/Declaration (File No. 70-7543) under Sections 6(a) and 7 of the Act. In 1988, pursuant to Commission order dated October 24, 1988 (HCAR No. 35-24734) the Industrial Development Authority of the State of New Hampshire issued $10 million in principle amount of a series of pollution control revenue bonds ("Bonds") for financing CL&P's share of the cost of constructing certain pollution control, sewage, and solid waste disposal facilities at the Seabrook Nuclear Electric Generating Station. Unit No. 1. In order to improve the credit ratings of, and to support, the Bonds, CL&P obtained a letter of credit from Union Bank of Switzerland ("UBS"). CL&P now seeks authority to change the expiration date of the UBS letter of credit from perpetual to a three-year term renewable on an evergreen basis from year to year thereafter with the consent of the parties; to reduce the annual letter of credit fee to UBS; and to obtain new letters of credit from new banks should it become necessary. The new letters of credit would not exceed $10,833,334 in amount, representing prinicpal in the amount of $10,000,000 and interest in the amount of $833,334 at the maximum rate of 15% per annum for 200 days and would be issued pursuant to new letters of credit and reimbursement agreements and related documents between a bank and CL&P. Tender advances under such arrangements would bear interest at a rate not to exceed the higher of (i) the prime rate plus 2.00%, or (ii) the federal funds rate plus 2.00%. Annual letter of credit costs under the substitute facility will not exceed 1.00% per annum. CL&P also seeks authority to obtain further extensions and modifications of replacements for the letter of credit and reimbursement agreement from time to time during the term of the bonds supported thereby. For the Commission, by the Division of Investment Management, pursuant to delegated authority. Jonathan G. Katz Secretary -----END PRIVACY-ENHANCED MESSAGE-----