-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, PtA/nmKOjVVX4GZQsaXBSaXYrgpNyICsF6UwcfNVNHcVg7j7sLoDREy8sjIPVinY /h8llhz46dyUrhekYnh8/Q== /in/edgar/work/0000072741-00-000218/0000072741-00-000218.txt : 20001024 0000072741-00-000218.hdr.sgml : 20001024 ACCESSION NUMBER: 0000072741-00-000218 CONFORMED SUBMISSION TYPE: POS AMC PUBLIC DOCUMENT COUNT: 2 FILED AS OF DATE: 20001023 FILER: COMPANY DATA: COMPANY CONFORMED NAME: NORTHEAST UTILITIES SYSTEM CENTRAL INDEX KEY: 0000072741 STANDARD INDUSTRIAL CLASSIFICATION: [4911 ] IRS NUMBER: 042147929 STATE OF INCORPORATION: MA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: POS AMC SEC ACT: SEC FILE NUMBER: 070-08875 FILM NUMBER: 744295 BUSINESS ADDRESS: STREET 1: 174 BRUSH HILL AVE CITY: WEST SPRINGFIELD STATE: MA ZIP: 01090-0010 BUSINESS PHONE: 4137855871 MAIL ADDRESS: STREET 1: 107 SELDON ST CITY: BERLIN STATE: CT ZIP: 06037-1616 POS AMC 1 0001.txt POST-EFF. AMENDMENT NO. 17 TO FORM U-1 FILE NO. 70-8875 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 POST-EFFECTIVE AMENDMENT NO. 17 TO FORM U-1 (AMENDMENT NO. 19) APPLICATION/DECLARATION UNDER THE PUBLIC UTILITY HOLDING COMPANY ACT OF 1935 Northeast Utilities Holyoke Water Power Company Western Massachusetts Electric Company Canal Street 174 Brush Hill Avenue Holyoke, MA 01040 West Springfield, MA 01090-0010 The Connecticut Light and Power Company Public Service Company NU Enterprises, Inc. of New Hampshire Northeast Generation Service Company North Atlantic Energy Northeast Generation Company Corporation Select Energy, Inc. 1000 Elm Street Mode 1 Communications, Inc. Manchester, NH 03015 107 Selden Street Berlin, CT 06037 Yankee Energy System, Inc. The Rocky River Realty Company Yankee Gas Services Company The Quinnehtuk Company Yankee Energy Financial Services Company Northeast Nuclear Energy Company NorConn Properties, Inc. 107 Selden Street Yankee Energy Services Company Berlin, CT 06037 R. M. Services, Inc. 599 Research Parkway Meriden, Connecticut 06450 HEC Inc. 24 Prime Parkway Natick, MA 01760 (Name of companies filing this statement and addresses of principal executive offices) NORTHEAST UTILITIES (Name of top registered holding company) Cheryl W. Grise, Esq. Senior 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 communications to Jeffrey C. Miller David R. McHale Assistant General Counsel Vice President and Treasurer Northeast Utilities Northeast Utilities Service Company Service Company P.O. Box 270 P.O. Box 270 Hartford, CT 06141-0270 Hartford, CT 06141-0270 Post-Effective Amendment No. 14 (Amendment No. 16) in this File is hereby amended and restated as follows: BACKGROUND 1. By Order dated November 20, 1996 (HCAR No. 35-26612) and Supplemental Orders dated February 11, 1997, March 25, 1997, May 29, 1997, January 16, 1998, May 13, 1999 and November 17, 1999, issued by the Commission in this File No. 70-8875, the Commission, among other things, authorized (i) the participation of the companies in the Northeast Utilities holding company system in a money pool administered by Northeast Utilities Service Company and (ii) short-term borrowing limits for Northeast Utilities ("NU"), The Connecticut Light and Power Company and Western Massachusetts Electric Company and others for the period to and including December 31, 2000. 2. NU and its subsidiaries (collectively, the "Applicants") now wish to further amend this Application/Declaration by filing this Post-Effective Amendment (this "Amendment") to: (a) seek Commission authorization for Yankee Energy System, Inc. ("YES"), Yankee Gas Services Company ("Yankee Gas"), Yankee Energy Financial Services Company, NorConn Properties, Inc., Yankee Energy Services Company and R.M. Services, Inc. to participate in the NU System Money Pool as such companies have become direct or indirect subsidiaries of NU pursuant to the merger of YES with NU on March 1, 2000, and to clarify the inclusion of Northeast Nuclear Energy Company, The Quinnehtuk Company, The Rocky River Realty Company and HEC Inc. as participants in the NU System Money Pool. (b) seek authorization for YES and Yankee Gas to incur short-term debt through December 31, 2000, subject to the limits and on the terms as described herein. (c) Eliminate any maximum limit on borrowings by nonutility subsidiaries from the NU System Money Pool. AMENDMENTS TO THE APPLICATION To reflect the foregoing, the Application/Declaration, as amended in this proceeding, is further amended as follows: 3. To add the Yankee Subsidiaries to the Application/Declaration, the following sentence is added to the end of paragraph 1. "Yankee Energy System, Inc. ("YES"), which became a wholly-owned holding company subsidiary of NU on March 1, 2000 (See File No. 70-9535), and Yankee Gas Services Company ("Yankee Gas"), Yankee Energy Financial Services Company ("Yankee Financial"), Yankee Energy Service Company ("Yesco"), NorConn Properties, Inc. ("NorConn") and R.M. Services, Inc. ("RMS"), each of which is a wholly-owned subsidiary of YES (YES, Yankee Gas, Yankee Financial, Yesco, NorConn and RMS are sometimes herein collectively referred to as the "Yankee Subsidiaries"), join in the submission of this Application with respect to (a) establishing a short- term borrowing limit for YES and Yankee Gas (collectively, the "Yankee Borrowers"), (b) participation by the Yankee Subsidiaries in the Money Pool, and (c) incurring of short-term debt by the Yankee Borrowers through December 31, 2000." 4. To seek short-term borrowing authority for the Yankee Borrowers, the following new paragraph 1B is added after paragraph 1A. "1B. The Yankee Borrowers hereby seek authorization to engage in certain financing transactions for which the specific terms and conditions are not known at this time, and which may not be covered by Rule 52, without further approval by the Commission through the Authorization Period. The short-term borrowings of the Yankee Borrowers have taken and will take a variety of forms, including short-term notes issued to bank and non-bank lending institutions through formal and informal credit lines, commercial paper issuances, open-account advances by NU and use of the NU System Money Pool. The following general terms will be applicable to the financing transactions requested to be authorized hereby. The effective cost of money on borrowings occurring pursuant to the authorization granted under this Application will not exceed 400 basis points over the base rate in effect from time to time of the bank or financial institution identified for such purpose with respect to the relevant financing or, if no such base rate is identified, the base rate in effect from time to time of a representative money center bank. The maturity of debt incurred will not exceed 364 days. The fees, commissions, or other similar remuneration paid in connection with the issuance of such debt or the entering into of credit facilities with respect to debt incurred pursuant to the Application will not exceed 3% of the principal amount of such debt. Borrowings from banks and other financial institutions may be either unsecured or secured. To the extent required, the provision of any collateral to secure debt incurred pursuant to this Application will be approved by applicable state regulatory commissions. Specific terms of any borrowings will be determined by the Yankee Borrowers at the time of issuance and will comply in all regards to the parameters of financing authorizations set forth above. A copy of any note or agreement executed pursuant to this Authorization will be filed under cover of the next quarterly report under Rule 24. The funds to be derived by the Yankee Borrowers from short-term borrowings authorized by the Commission pursuant to this Application will be applied, with other funds available to those companies, to provide working capital and for general corporate purposes." 5. To provide that NNECO, The Quinnehtuk Company, The Rocky River Realty Company and HEC Inc. may borrow through the NU System Money Pool, paragraph 9 is deleted in its entirety and replaced with the following new paragraph 9. "9. Pool Participants borrowing surplus funds through the NU System Money Pool pay interest at a rate equal to the daily composite federal funds rate. All the borrowing companies have previously received an order from the Commission authorizing such borrowings except NNECO, The Quinnehtuk Company ("Quinnehtuk"), RR and HEC Inc. ("HEC"), wholly owned subsidiaries of NU. To the extent these companies borrow funds from associate companies through the Money Pool at a rate matching the lenders' effective cost of capital, such borrowings are exempt under Rule 52(b)(2). From time to time, these companies also borrow surplus funds through the NU System Money Pool at rates which do not match the lenders' effective cost of capital. Such borrowings are not exempt under Rule 52(b)(2). Accordingly, NNECO, Quinnehtuk, RR and HEC seek authorization to borrow funds from the NU System Money Pool in accordance with the terms of the NU System Money Pool in circumstances where the exemption provided by Rule 52(b)(2) is not available." 6. To restate the terms of the NU System Money Pool to take into account these changes, paragraphs 13 through 19 are deleted in their entirety and replaced with the following new paragraphs 13 through 19. "13. NU, CL&P, WMECO, PSNH, NAEC, HWP, NUEI, NGS, NGC, Select, HEC, NNECO, Quinnehtuk, RR and Mode 1 ("the "Original Participants") propose to continue using, and the Yankee Subsidiaries propose participating in, the NU System Money Pool, which is administered on their behalf by Northeast Utilities Service Company ("NUSCO") under the direction of an officer in the NUSCO Treasury Organization (the Original Participants and the Yankee Subsidiaries are referred collectively herein as the "Pool Participants"). The NU System Money Pool currently consists principally of surplus funds that may be available from day to day to the Pool Participants, including NU. The funds available to the NU System Money Pool will be loaned on a short-term basis to those Pool Participants, other than NU, YES, Mode 1 and NGC (NU's only exempt wholesale generator), that have a need for short-term funds, subject to certain limitations described therein. If no such short-term needs match the amount of funds that are available for the period such funds are available, the funds in the NU System Money Pool will be invested directly or indirectly through investment funds in: (a) obligations issued or guaranteed by the United States of America; (b) obligations issued or guaranteed by any entity controlled, sponsored by, or supervised by and acting as an instrumentality of the United States of America pursuant to authority granted by the Congress of the United States, including but not limited to the obligations of the Government National Mortgage Association (GNMA), Student Loan Marketing Association (SLMA), Federal Home Loan Mortgage Corporation (FHLMC) and Federal National Mortgage Association (FNMA); (c) obligations issued or guaranteed by any state or political subdivision thereof, provided that such obligations are rated for investment purposes at not less than "A" by Moody's Investors Service, Inc. ("Moody's") or by the Standard & Poor's Rating Group ("S&P"); (d) certificates of deposit issued or banker's acceptances drawn on and accepted by commercial banks which are members of the Federal Deposit Insurance Corporation and which have a combined capital, surplus and undistributed profits of at least $100,000,000; (e) commercial paper rated not less than "P-1" by Moody's or not less than "A-1" by S&P; (f) repurchase agreements with any commercial or investment bank secured by obligations issued or guaranteed by the United States of America or an instrumentality thereof provided collateral is held by a third party; and (g) as to WMECO contributions, such other instruments as are permitted by Rule 40(a)(1) under the Act and approved by the MDTE pursuant to Massachusetts General Laws Chapter 164, Section 17A and the regulations thereunder. 14. In addition to surplus funds, funds borrowed by NU through the issuance of the Short-Term Notes, by selling commercial paper or by borrowing under the Facility described in paragraphs 1A to 5 above are a source of funds for making open account advances to certain of its subsidiaries through the NU System Money Pool. The potential recipients of such open account advances will be all Pool Participants with the exception of CL&P, WMECO, Mode 1 and NGC. Such arrangements have in the past resulted in a reduction in borrowing costs to the recipients because NU has access to funds at lower interest rates than the subsidiaries listed above and/or because the transaction costs of arranging several small financings to meet the needs of the smaller subsidiaries are higher than the costs of arranging one larger financing by NU. The amounts to be borrowed by NU for the purpose of making open account advances or to be lent through the Money Pool to the Pool Participants, will also be subject to the short-term limits on the aggregate amount outstanding for which approval is sought in this filing. 15. PSNH is currently prohibited, by order of the New Hampshire Public Utilities Commission (the "NHPUC"), from lending funds to the NU System Money Pool. PSNH has recently requested that the NHPUC remove such restriction. In addition, only CL&P, HWP, NNECO, RR and Quinnehtuk will be entitled to borrow funds through the NU System Money Pool that are attributable to contributions from WMECO unless and until the MDTE has issued an order authorizing WMECO to lend funds to other NU subsidiaries through the NU System Money Pool. 16. The Pool Participants request that the Commission reserve jurisdiction over any PSNH contributions to the NU System Money Pool and any borrowings by companies other than CL&P, HWP, NNECO, RR and Quinnehtuk of NU System Money Pool funds attributable to contributions thereto by WMECO until such time as the MDTE has issued an order authorizing such borrowings. Without such an order, WMECO may not lend money to such companies through the Money Pool. In the event that such an order is received from the MDTE, the Pool Participants will file a post-effective amendment hereto seeking the necessary Commission approval. 17. Money Pool transactions will be designed to match, on a daily basis, the available cash of the Pool Participants and the short- term borrowing requirements of certain Pool Participants (other than NU, YES, NGC and Mode 1), thereby minimizing the need for short-term borrowings to be made by the Pool Participants from external sources. To this end, it is anticipated that the short-term borrowing requirements of the Pool Participants (other than NU, YES, NGC and Mode 1) will be met, in the first instance, with the proceeds of borrowings available through the NU System Money Pool, and thereafter, to the extent necessary, with the proceeds of external short-term borrowings, as described below. Those participants in the NU System Money Pool without access to external borrowing facilities will have priority as borrowers from the NU System Money Pool, and all Pool Participants, other than CL&P, WMECO, Mode 1 and NGC, will be eligible to borrow through the NU System Money Pool from the proceeds of external borrowings by NU. If at any time there are funds remaining in the NU System Money Pool after satisfaction of the borrowing needs of the borrowers, NUSCO, as agent for the NU System Money Pool, will invest those funds as described in paragraph 13 and allocate the earnings on any such investments among the Pool Participants, providing such excess funds on a pro rata basis according to the amount of the funds so provided 18. All borrowings from and contributions to the NU System Money Pool, including the open account advances, will be documented and will be evidenced on the books of each participant that is borrowing from or contributing surplus funds to the NU System Money Pool. Any participant contributing funds to the NU System Money Pool may withdraw those funds at any time without notice to satisfy its daily need for funds. Except for loans from the proceeds of external borrowings by NU, all loans will be payable on demand, may be prepaid by any borrowing Pool Participant at any time without premium or penalty and will bear interest for both the borrower and lender, payable monthly, equal to the daily Federal Funds Effective Rate as quoted by the Federal Reserve Bank of New York. Loans from the proceeds of external borrowings by NU will bear interest at the same rate paid by NU on its borrowings, and no such loans may be prepaid unless NU is made whole for any additional costs that may be incurred because of such prepayment. NU will be fully reimbursed for all costs that it incurs in relation to loans made to the Pool Participants. 19. The Applicants believe that the cost of the proposed borrowings through the NU System Money Pool will generally be more favorable to the borrowing Pool Participants than the comparable cost of external short-term borrowings, and that the yield to the Pool Participants contributing available funds to the NU System Money Pool will generally be the same as the typical yield on short-term investments. However, if on any given day the funds available through the NU System Money Pool are insufficient to satisfy the short-term borrowing requirements of a Pool Participant, such Pool Participant may effect short-term borrowings through lending institutions and/or through the sale of commercial paper, if appropriate, as described below." 7. To set out the applicable short-term borrowing limits and eliminate the limits previously imposed on the nonutility subsidiaries, paragraph 27 is deleted in its entirety and replaced with the following new paragraph 27. "27. The aggregate amount of short-term debt that will be outstanding at any one time, whether evidenced by Short-Term Notes issued to lending institutions or by Commercial Paper or through borrowings from the NU System Money Pool pursuant to the authority requested in this Application or through borrowings through revolving credit facilities described in paragraphs 1A through 5 and paragraph 29, for which Commission authorization is being sought will not exceed the following limits: NU $400 million CL&P $375 million WMECO $250 million PSNH $225 million HWP $ 5 million NAEC $ 60 million NNECO $ 75 million YES $ 50 million Yankee Gas $100 million The Pool Participants request that the Commission reserve jurisdiction over the request that there be no limit placed on the NU System Money Pool borrowings of RR, Quinnehtuk, HEC, NUEI, Select, NGS, Yankee Financial, Yesco, RMS and NorConn (the "Nonutility Participants") pending completion of the record. A limit on the Nonutility Participants may result in unnecessary borrowings by the NU system. Such unnecessary borrowings may occur when some Pool Participants have money invested in the NU System Money Pool but other Nonutility Participants need to borrow in excess of pre-established limits. The excess borrowing must be made directly from NU with funds borrowed from external sources while excess funds in the money pool are invested with third parties. This results in an inefficient use of funds by the NU System as a whole. A similar request was made by Conectiv and approved by the Commission in HCAR NO. 27111 (December 14, 1999). Until such time as the Commission releases such jurisdiction, the aggregate amount of borrowings by each Nonutility Participant that will be outstanding through the NU System Money Pool will not exceed the following limits: YESCo $30 million R.M.S. $10 million NorConn $10 million Yankee Financial $10 million NUEI $100 million NGC $0 NGS $20 million Mode 1 $0 HEC $20 million RR $30 million Quinnehtuk $16 million Select $200 million" ITEM 2. FEES, COMMISSION AND EXPENSES 8. See Exhibit K.4 attached hereto. ITEM 3. APPLICABLE STATUORY PROVISIONS 9 Borrowings from the NU System Money Pool are subject to the requirements of Sections 6, 7, 9(a), 10 and 12 of the Act and Rules 43, 45 and 52 thereunder. Loans to the Money Pool are subject to the requirements of Sections 9(a), 10 and 12 of the Act. ITEM 4. REGULATORY APPROVALS 10. The approval of the MDTE is required pursuant to C.164, Section 17A of the Massachusetts General Laws for the participation of WMECO in the NU System Money Pool. The MDTE granted such approval on October 29, 1986. As explained above, the approval of the MDTE will be required under Massachusetts General Laws C.164, Section 17A before companies other than CL&P, HWP, NNECO, RR and Quinnehtuk can borrow NU System Money Pool funds attributable to contributions by WMECO. WMECO has not yet requested that authorization. Until that authorization is granted, companies other than CL&P, HWP, NNECO, RR and Quinnehtuk may not borrow through the NU System Money Pool from funds attributable to WMECO 11. PSNH is currently prohibited by the NHPUC from contributing funds to the NU System Money Pool. The NHPUC approved NAEC's participation in the NU System Money Pool in an order dated March 19, 1992. ITEM 5. PROCEDURE 12. The Applicants hereby request that the Commission publish a notice under Rule 23 with respect to the filing of this Application as soon as practicable and that the Commission's order be issued as soon as possible. A form of notice suitable for publication in the Federal Register is attached hereto as Exhibit h.1. The Applicants respectfully request the Commission's approval, pursuant to this Application/Declaration, of all transactions described herein, whether under the sections of the Act and Rules thereunder enumerated in Item 3 or otherwise. It is further requested that the Commission issue an order authorizing the transactions proposed herein at the earliest practicable date. Additionally, the Applicants (i) request that there not be any recommended decision by a hearing officer or by any responsible officer of the Commission, (ii) consent to the Office of Public Utility Regulation within the Division of Investment Management assisting in the preparation of the Commission's decision, and (iii) waive the 30-day waiting period between the issuance of the Commission's order and the date on which it is to become effective, since it is desired that the Commission's order, when issued, become effective immediately. . ITEM 6. EXHIBITS AND FINANCIAL STATEMENTS 13. The following additional exhibits and financial statements are filed herewith: (a) Exhibits A.9 Proposed Terms of the NU Money Pool (Revised March 2000)* A.10 Proposed Terms of the NU Money Pool (Revised October 2000) F.6 Opinion of Counsel related to matters described in Post- Effective Amendment No. 14.* K.4 Schedule of Fees, Commissions and Expenses relating to matters described on Post-Effective Amendment No. 14.* I.4 Form of Notice* * Previously filed 13 "Other Matters Except in accordance with the Act, neither NU nor any subsidiary thereof (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 EWG or a FUCO. None of the proceeds from the transactions proposed herein will be used by NU and its subsidiaries to acquire any securities of, or any interest in, an EWG or a FUCO. NU currently meets all of the conditions of Rule 53(a),except for clause (1). At June 30, 2000, NU's "aggregate investment," as defined in Rule 53(a)(1), in EWGs and FUCOs was approximately $469.5 million, or approximately 76.3 % of NU's average "consolidated retained earnings," also as defined in Rule 53(a)(1), for the four quarters ended June 30, 2000 ($615.3 million). With respect to Rule 53(a)(1), however, the Commission has determined that NU's financing of its investment in Northeast Generation Company ("NGC"), NU's only current EWG or FUCO in an amount greater than the amount that would otherwise be allowed by Rule 53(a)(1) would not have either of the adverse effects set forth in Rule 53(c). See Northeast Utilities, Holding Company Act Release No. 27148, dated March 7, 2000. NU continues to assert that its EWG investment in NGC will not adversely affect the System. In addition, NU and its subsidiaries are in compliance with the other provisions of Rule 53(a) and (b), as demonstrated by the following determinations: (i) NGC 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; (ii) No employees of NU's public utility subsidiaries have rendered services to NGC; (iii) NU has submitted (a) a copy of each Form U-1 and Rule 24 certificate that has been filed with the Commission under Rule 53 and (b) a copy of Item 9 of the Form U5S and Exhibits G and H thereof to each state regulator having jurisdiction over the retail rates of NU's public utility subsidiaries; (iv) Neither NU nor any subsidiary has been the subject of a bankruptcy or similar proceeding unless a plan of reorganization has been confirmed in such proceeding; (v) NU's average CREs for the four most recent quarterly periods have not decreased by 10% or more from the average for the previous four quarterly periods; and (vi) In the previous fiscal year, NU did not report operating losses attributable to its investment in EWGs/FUCOs exceeding 3 percent of NU's consolidated retained earnings. Set forth below are summaries of the consolidated capital structures of NU as of June 30, 2000 and the pro forma consolidated capital structure of NU showing the effect of the inclusion of the Yankee Subsidiaries in the NU System Money Pool as proposed herein: NU Consolidated Capital Structure (as of June 30, 2000) (Dollars in thousands) (unaudited) Actual Pro Forma Common Stock Equity . . $2,365,854 37.5% $2,365,854 36.8% Preferred stock* $ 177,700 2.8% $ 177,700 2.8% Short and Long-Term Debt* $3,768,353 59.7% $3,888,353 60.4% Total $6,311,907 100% $6,431,907 100% * Includes current portion. SIGNATURES Pursuant to the requirements of the Public Utility Holding Company Act of 1935, as amended, the undersigned have duly caused this Post-Effective Amendment to be signed on behalf of each of them by the undersigned thereunto duly authorized. Date: October 23, 2000 Northeast Utilities The Connecticut Light and Power Company Western Massachusetts Electric Company Public Service Company of New Hampshire Holyoke Water Power Company Northeast Nuclear Energy Company North Atlantic Energy Corporation The Rocky River Realty Company The Quinnehtuk Company NU Enterprises, Inc. Northeast Generation Company Northeast Generation Service Company Select Energy, Inc. Mode 1 Communications, Inc. HEC Inc. Yankee Energy System, Inc. Yankee Gas Services, Inc. Yankee Financial Services, Inc. Yankee Energy Services Company NorConn Properties, Inc. R.M. Services, Inc. By: /s/ Cheryl W. Grise, Senior Vice President, Secretary and General Counsel, Northeast Utilities Service Company as Agent for all of the above named companies EX-99 2 0002.txt EXHIBIT A.10 - PROPOSED TERMS OF NU MONEY POOL Exhibit A.10 PROPOSED TERMS OF THE NU MONEY POOL (Revised October, 2000) GENERAL 1. The members of the Money Pool (the Pool) are Northeast Utilities (NU), The Connecticut Light and Power Company (CL&P), Western Massachusetts Electric Company (WMECO), Northeast Nuclear Energy Company (NNECO), Holyoke Water Power Company (HWP), The Rocky River Realty Company (RR), The Quinnehtuk Company (Quinnehtuk), Public Service Company of New Hampshire (PSNH), North Atlantic Energy Corporation (North Atlantic), HEC Inc. (HEC), Mode 1 Communications, Inc. (Mode 1), Select Energy, Inc. (Select), NU Enterprises, Inc. (NUEI), Northeast Generation Company (NGC), Northeast Generation Services Company (NGS), Yankee Energy Systems, Inc. (YES), Yankee Gas Services Company (Yankee Gas), Yankee Energy Financial Services Company (Yankee Financial), NorConn Properties, Inc. (NorConn), Yankee Energy Services Company (Yesco) and RMS Services, Inc. (RMS) (collectively, Pool Participants). 2. The Pool will be administered by Northeast Utilities Service Company (Agent). 3. Each member will determine each day, on the basis of cash flow projections, the amount of surplus funds it has available for contribution to the Pool (Surplus Funds). In addition to its own Surplus Funds, NU may borrow funds from third party lenders (Excess Funds) in order to make these Excess Funds available to meet the borrowing needs of the Pool Participants other than CL&P, WMECO, Mode 1 and NGC. CONTRIBUTIONS TO THE POOL 4. Each member will contribute its Surplus Funds to the Pool. NU will contribute any Excess Funds to the Pool. 5. Each member will receive as interest with respect to its Surplus Funds that fraction of the total interest received by the Pool equal to the ratio of the Surplus Funds the member has contributed, times the period in which such Surplus Funds were available, to the total Surplus Funds in the Pool, times the period in which all Surplus Funds were in the Pool. NU will receive the same interest with respect to its Excess Funds that it pays for its Excess Funds. Such interest will be computed on a daily basis and settled once per month. 6. Each member may withdraw any of its Surplus Funds at any time without notice. NU may withdraw its Excess Funds at any time without notice. BORROWINGS FROM THE POOL 7. Neither NU, YES, NGC nor Mode 1 Shall be entitled to borrow from the Pool. 8. No company other than CL&P, NNECO, HWP, RR and Quinnehtuk may borrow Surplus Funds that are attributable to contributions from WMECO until the Massachusetts Department of Telecommunications and Energy or other appropriate Massachusetts regulatory agency which regulates WMECO ("MDTE") has issued an order authorizing WMECO to lend funds to such companies through the Pool. 9. All short-term borrowing needs of members other than NU, YES, NGC and Mode 1, which shall not be entitled to borrow from the Pool will be met by Surplus Funds in the Pool to the extent such funds are available and to the extent they are not restricted by the conditions specified in paragraph 8. All Pool Participants other than CL&P, WMECO, Mode 1 and NGC may meet their short-term borrowing needs through Excess Funds made available from NU. The aggregate amount of short-term debt that may be outstanding at any one time, whether through borrowings from the Money Pool or otherwise may not exceed $400 million in the case of NU, $375 million in the case of CL&P, $250 million in the case of WMECO, $225 million in the case of PSNH, $5 million in the case of HWP, $60 million in the case of NAEC, $75 million in the case of NNECO, $50 million in the case of YES and $100 million in the case of Yankee Gas, or such other amount which may be approved and authorized by the appropriate state commission or the Securities and Exchange Commission and the respective board of directors from time to time. Restrictions on Borrowings under the Pool are summarized as follows: May Not Borrow from May Not Borrow NU's External Borrowings from Pool CL&P NU WMECO YES Mode 1 Mode 1 NGC NGC May Borrow from WMECO Contributions CL&P HWP NNECO RR Quinnehtuk All other Pool Participants may lend to and borrow from the Pool and from NU's external borrowings 10. Loans will be made first to borrowers that cannot access the commercial paper market. 11. Members borrowing Surplus Funds will pay interest at a rate equal to the daily composite Federal funds rate. The rate to be used for weekends and holidays will be the prior business day's rate. Members borrowing Excess Funds will pay interest at the same rate that NU pays for those Excess Funds. 12. Loans made by the Pool will be open account advances for periods of less than 12 months, although the Agent may receive upon demand a promissory note evidencing the transaction. 13. All loans made by the Pool from Surplus Funds are payable on demand by the Agent. 14. All loans made by the Pool from Surplus Funds may be prepaid by the borrower without penalty. No loans from Excess Funds shall be prepaid prior to the maturity of the NU borrowing that resulted in the Excess Funds, unless the prepayment can be made without NU incurring additional costs or unless the prepayment is accompanied by payment of any additional costs incurred by NU as a result of such prepayment. 15. If there are more Surplus Funds in the Pool than are necessary to meet the borrowing needs of the members, the Agent will use the Surplus Funds to meet the NU system's compensating balance requirements or invest them on behalf of the Pool directly, or indirectly through an investment fund, in one of the following instruments: (a) obligations issued or guaranteed by the United States of America; (b) obligations issued or guaranteed by any entity controlled, sponsored by, or supervised by and acting as an instrumentality of the United States of America pursuant to authority granted by the Congress of the United States, including but not limited to the obligations of the Government National Mortgage Association (GNMA), Student Loan Marketing Association (SLMA), Federal Home Loan Mortgage Corporation (FHLMC) and Federal National Mortgage Association (FNMA); (c) obligations issued or guaranteed by any state or political subdivision thereof, provided that such obligations are rated for investment purposes at not less than "A" by Moody's Investors Service, Inc. ("Moody's") or by the Standard & Poor's Rating Group ("S&P"); (d) certificates of deposit issued or banker's acceptances drawn on and accepted by commercial banks which are members of the Federal Deposit Insurance Corporation and which have a combined capital, surplus and undistributed profits of at least $100,000,000; (e) commercial paper rated not less than "P-1" by Moody's or not less than "A-1" by S&P; (f) repurchase agreements with any commercial or investment bank secured by obligations issued or guaranteed by the United States of America or an instrumentality thereof provided collateral is held by a third party; and (g) as to WMECO contributions, such other instruments as are permitted by Rule 40(a)(1) under the Act and approved by the MDTE pursuant to Massachusetts General Laws Chapter 164,Section 17A and the regulations thereunder. TERMINATION 16. Any member may terminate its participation in the Pool at any time without notice. The original Application/Declaration in Northeast Utilities, et. al, File No. 70-8875 (dated as of June 19, 1996), has been amended fifteen (15) times: (i) Amendment No. 1, dated as of October 30, 1996, (ii) Amendment No. 2, dated as of November 19, 1996, (iii) Post-Effective Amendment No. 1 (Amendment No. 3), dated as of January 28, 1997, (iv) Post-Effective Amendment No. 2 (Amendment No. 4), dated as of April 23, 1997, (v) Post- Effective Amendment No. 3 (Amendment No. 5), dated as of May 16, 1997, (vi) Post-Effective Amendment No. 4 (Amendment No. 6), dated as of May 27, 1997, (vii) Post-Effective Amendment No. 5 (Amendment No. 7), dated as of May 28, 1997, (viii) Post-Effective Amendment No. 6 (Amendment No. 8), dated as of May 30, 1997, (ix) Post-Effective Amendment No. 7 (Amendment No. 9), dated as of November 20, 1997, (x) Post-Effective Amendment No. 8 (Amendment No. 10), dated as of December 31, 1997, (xi) Post-Effective Amendment No. 9 (Amendment No. 11), dated as of January 14, 1998, (xii) Post-Effective Amendment No. 10 (Amendment No. 12), dated as of March 3, 1999, (xiii) Post-Effective Amendment No. 11 (Amendment No. 13), dated as of September 7, 1999, (xiv) Post-Effective Amendment No. 12 (Amendment No. 14) dated as of October 26, 1999 and (xv) Post-Effective Amendment No. 13 (Amendment No. 15) dated as of November 17, 1999. -----END PRIVACY-ENHANCED MESSAGE-----