-----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, LT0a4muOHLTCIiHdivQqS/vbPrYX4Xjl3CJwXcFY/NxYV5v4M3IBuZ8tjLZD2cU+ ymf9mwcEl4dCtgKYmppouw== 0000906602-97-000075.txt : 19970425 0000906602-97-000075.hdr.sgml : 19970425 ACCESSION NUMBER: 0000906602-97-000075 CONFORMED SUBMISSION TYPE: U-1/A PUBLIC DOCUMENT COUNT: 7 FILED AS OF DATE: 19970424 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: NORTHEAST UTILITIES SYSTEM CENTRAL INDEX KEY: 0000072741 STANDARD INDUSTRIAL CLASSIFICATION: ELECTRIC SERVICES [4911] IRS NUMBER: 042147929 STATE OF INCORPORATION: MA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: U-1/A SEC ACT: 1935 Act SEC FILE NUMBER: 070-08875 FILM NUMBER: 97586541 BUSINESS ADDRESS: STREET 1: 174 BRUSH HILL AVE CITY: WEST SPRINGFIELD STATE: MA ZIP: 01090-0010 BUSINESS PHONE: 2036655000 MAIL ADDRESS: STREET 1: 107 SELDON ST CITY: BERLIN STATE: CT ZIP: 06037-1616 U-1/A 1 U-1 AMENDMENT FILING FILE NO. 70-8875 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 POST-EFFECTIVE AMENDMENT NO. 2 (AMENDMENT NO. 4) TO FORM U-1 APPLICATION/DECLARATION WITH RESPECT TO (1) PROPOSED REVOLVING CREDIT FACILITY FOR NORTHEAST UTILITIES ("NU"), THE CONNECTICUT LIGHT AND POWER COMPANY ("CL&P") AND WESTERN MASSACHUSETTS ELECTRIC COMPANY ("WMECO") AND (2) INCREASES AND EXTENSIONS OF SHORT-TERM BORROWING LIMITS OF NU, CL&P, WMECO, PUBLIC SERVICE COMPANY OF NEW HAMPSHIRE, HOLYOKE WATER POWER COMPANY AND NORTH ATLANTIC ENERGY CORPORATION UNDER THE PUBLIC UTILITY HOLDING COMPANY ACT OF 1935 Northeast Utilities The Connecticut Light Western Massachusetts Electric Company and Power Company 174 Brush Hill Avenue 107 Selden Street West Springfield, MA 01090-0010 Berlin, CT 06037 Holyoke Water Power Company Public Service Company of New Hampshire Canal Street North Atlantic Energy Corporation Holyoke, MA 01040 1000 Elm Street Manchester, NH 03015 (Name of companies filing this statement and addresses of principal executive offices) NORTHEAST UTILITIES (Name of top registered holding company) Robert P. Wax, Esq. Vice President, Secretary and General Counsel Northeast Utilities Service Company 107 Selden Street Berlin, CT 06037 (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, Esq. David R. McHale Richard C. MacKenzie, Esq. Assistant General Counsel Assistant Treasurer - Finance Day, Berry & Howard Northeast Utilities Service Company Northeast Utilities Service Company CityPlace I 107 Selden Street 107 Selden Street Hartford, CT 06103-3499 Berlin, CT 06037 Berlin, CT 06037
BACKGROUND 1. By Order dated November 20, 1996 (HCAR No. 35-26612), Supplemental Order dated February 11, 1997 (HCAR No. 35-26665) and Supplemental Order dated March 25, 1997 (HCAR No.35-26692) in this File No. 70-8875, the Commission, among other things, authorized Northeast Utilities ("NU"), The Connecticut Light and Power Company ("CL&P") and Western Massachusetts Electric Company ("WMECO") to enter into an unsecured revolving credit facility (the "Facility") with various lending institutions (the "Lenders") permitting borrowings thereunder aggregating up to $313.75 million. Under the Facility, NU, CL&P and WMECO (individually, a "Borrower" and, collectively, the "Borrowers") each has its own maximum borrowing limit ("Sublimit") as follows: NU ($150 million), CL&P ($313.75 million) and WMECO ($150 million). Each Borrower also entered into certain financial covenants with the Lenders which obligate it to maintain during various periods certain minimum levels of common equity and interest coverage. 2. Primarily because of the financial impact of the increased costs associated with current nuclear outages on the NU system and other difficulties related to the Millstone nuclear generating units, NU and CL&P needed and obtained waivers from the Lenders with respect to their interest coverage covenants for the fiscal quarters ended December 31, 1996 and March 31, 1997, respectively. In addition, for the same reasons, CL&P and WMECO expect that they will not be able to meet their financial covenants under the Facility at various points in 1997. 3. The Borrowers have requested the Lenders to make certain amendments to the financial covenants in the Facility consistent with the present financial forecasts of the Borrowers. As a condition to agreeing to such request, the Lenders requested that (a) CL&P and WMECO collateralize their obligations under the Facility with first mortgage bonds; (b) NU's Sublimit be reduced to zero subject to reinstatement to up to $50 million at such time as the Borrowers meet certain financial tests; (c) the Sublimit of CL&P and WMECO not exceed at any time the aggregate principal amount of collateral first mortgage bonds issued by each of them to secure their respective obligations under the Facility; (d) on the closing date of the amendment, the Borrowers pay each Lender an amendment fee equal to .25% of its commitment under the Facility; and (e) the amendments become effective no later than May 30, 1997. The Borrowers have agreed to the Lenders' requests. 4. The Orders of the Commission referred to in paragraph 1 above also authorized a maximum short-term borrowing authorization for North Atlantic Energy Corporation ("NAEC") of $50 million. The Applicants now seek the Commission's authorization to increase the short-term borrowing authorization of NAEC to $60 million to ensure that NAEC will have access to adequate cash resources to meet its operating requirements. 5. The aforementioned Orders also authorized the continued participation of NAEC, along with other subsidiaries of NU, in the NU system money pool (the "Money Pool"). See paragraphs 8 and 13 through 19 of the application/declaration in this proceeding, as previously amended (the "Application"). NAEC is now entitled to borrow through the Money Pool only if and to the extent that funds in the Money Pool attributable to contributions of surplus funds from or borrowings by NU are available for such borrowing. See paragraph 15 of the Application. The Applicants propose to modify the Money Pool to enable NAEC to borrow from all participants in the Money Pool, thereby giving NAEC greater financing flexibility. 6. This post-effective amendment to the Application is filed to obtain authorization for the proposed changes to the Facility described above, for an increase in the short-term borrowing authorization of NAEC to $60 million and for the above-described change in NAEC's participation in the Money Pool. AMENDMENTS TO THE APPLICATION To reflect the foregoing, the Application in this proceeding is further amended as follows: 7. The second sentence of paragraph 2 is deleted and replaced with the following to take into account NU's reduced borrowing limit and to reflect that CL&P's and WMECO's borrowing limit may not exceed the amount of mortgage bonds securing its obligations under the Facility: "Each Borrower will have its own maximum borrowing limit under the Facility as follows: NU ($50 million), CL&P ($313.75 million) and WMECO ($150 million); provided, however, until each Borrower maintains certain interest coverage ratio tests for two consecutive fiscal quarters, NU will not be able to borrow under the Facility and provided further, the borrowing limit of CL&P and WMECO may never exceed the aggregate principal amount of its respective first mortgage bonds securing their respective obligations under the Facility. See paragraph 5 below." 8. The following sentence is added at the end of paragraph 4 to take into account the first amendment to the revolving credit agreement: "A summary of the principal terms and conditions of the first amendment to the revolving credit agreement is filed herewith as Exhibit B.3. The final terms of the first amendment will be filed by post-effective amendment as Exhibit B.4." 9. To reflect that the obligations of CL&P and WMECO under the Facility will be secured, paragraph 5 is amended by deleting the words "will be unsecured," in the first sentence and adding the following sentence after the first sentence: "The respective obligations of CL&P and WMECO under the Facility for principal, interest and fees will be secured by first mortgage bonds issued by CL&P or WMECO, as the case may be, in a principal amount equal to its borrowing limit under the Facility and an additional principal amount of bonds to cover the estimated amount of certain interest and fee expense which will not be paid from interest owing on the bonds." 10. Paragraph 8 is amended by substituting "$60 million" for "$50 million" where it appears therein to take into account the increase of NAEC's short-term borrowing authorization from $50 million to $60 million. 11. The table in paragraph 11 is amended by changing from $50 million to $60 million the maximum aggregate amount of all short-term debt of NAEC proposed to be outstanding at any one time at or prior to December 31, 2000. The maximum outstanding short-term debt of NAEC during the period January 1, 1996 to March 31, 1997 was $34 million. Exhibit H.7 sets forth the Cash Receipts and Disbursements projections for NAEC in 1997, 1998 and 1999, with contingencies for short-term debt level variances during a given month in such years. 12. To recognize that NAEC and HEC, Inc. ("HEC") will be entitled to borrow from all participants in the Money Pool (subject to certain limitations with respect to WMECO contributions) and not only from contributions of surplus funds from or borrowings by NU, the first sentence of paragraph 15 is deleted and the second sentence is replaced with the following: "PSNH and NAEC will not be entitled to borrow funds through the Money Pool that are attributable to contributions from WMECO unless and until the DPU has issued an order authorizing WMECO to lend funds to PSNH or NAEC, as the case may be, through the Money Pool." HEC is not an applicant hereunder by virtue of the exemption provided by Rule 52 under the Act. 13. To reflect that NAEC as well as PSNH may not borrow from WMECO in the Money Pool without Massachusetts regulatory approval, paragraph 16 is deleted and replaced with the following: "The Applicants request that the Commission reserve jurisdiction over any PSNH and NAEC borrowings of Money Pool funds attributable to contributions thereto by WMECO until such time as the DPU has issued an order authorizing such borrowings. Without such an order, WMECO may not lend money to PSNH or NAEC through the Money Pool. In the event that such an order is received from the DPU, the Applicants will file a post-effective amendment hereto seeking the necessary Commission approval." 14. To take into account the increase of NAEC's short-term borrowing authorization from $50 million to $60 million, paragraph 27 is amended by substituting "$60 million" for "$50 million" where it appears therein. 15. The second sentence of paragraph 31 is deleted and replaced with the following to reflect that NAEC will be entitled to borrow from Money Pool participants other than NU: "In addition, surplus funds may be borrowed by HWP and NAEC from the Money Pool to the extent available." 16. The first sentence of paragraph 38 is deleted and replaced with the following to take into account that the issuance of collateral mortgage bonds by CL&P and WMECO is exempt from Section 6(a) of the Act by virtue of Rule 52 thereunder: "The Applicants believe that Sections 6(a), 7 and 12 of the Act and Rules 45 and 52 thereunder are applicable to the transactions contemplated by the Facility described in the Application, as amended, by virtue of Rule 52, CL&P and WMECO are exempt from the provisions of Section 6(a) as it relates to their issuance of first mortgage bonds to secure their obligations under the Facility." 17. To reflect that NAEC as well as PSNH will require Massachusetts regulatory approval for NAEC to borrow Money Pool funds from WMECO, paragraph 41 is deleted and replaced with the following: "The approval of the DPU is required pursuant to C.164, Section 17A of the Massachusetts General Laws for the participation of WMECO in the Money Pool. The DPU granted such approval on October 29, 1986. As explained in paragraph 15 above, the approval of the DPU will be required under Massachusetts General Laws C.164, Section 17A before PSNH or NAEC can borrow Money Pool funds attributable to contributions by WMECO. WMECO has not yet requested that authorization. Until that authorization is granted, PSNH and NAEC may not borrow through the Money Pool from funds attributable to WMECO." 18. Paragraph 43 is deleted and replaced with the following to take into account that Connecticut and Massachusetts regulatory authorities must approve the issuance of mortgage bonds to secure CL&P's and WMECO's obligations under the Facility: "The approval of the Connecticut Department of Public Utility Control ("DPUC") is required pursuant to Section 16-43 of the Connecticut General Statutes for issuance by CL&P of its first mortgage bonds to secure its obligations under the Facility. The application seeking such approval and a certified copy of the DPUC Decision approving such issuance are filed as Exhibits D.7 and D.8, respectively. The approval of the DPU is required pursuant to C.164, Section 14 of the Massachusetts General Laws for the issuance by WMECO of its first mortgage bonds to secure its obligations under the Facility. The petition seeking such approval and a certified copy of the DPU order approving such issuance are filed as Exhibits D.9 and D.10, respectively. Other than the DPUC, the DPU and the Commission, no other state or federal commission has jurisdiction with respect to any aspect of the proposed transaction." 19. The fees, commissions and expenses paid or incurred, or estimated to be paid or incurred, directly or indirectly, by the Applicants with respect to this post-effective amendment are set forth in Exhibit K.2 hereto. None of such fees, commissions or expenses will be paid to any associate company or affiliate of the Applicants except for financial and other services performed at cost by Northeast Utilities Service Company, an affiliated service company, and except that C. Duane Blinn, a member of the firm of Day, Berry & Howard, counsel to the applicants, is Assistant Secretary of Connecticut Yankee Atomic Power Company, an affiliate, and the estimate of fees set forth above will include payment to be made to that firm for legal services in connection with the transactions proposed in this post-effective amendment. 20. A condition of the Lenders' consent to the amendments to the Facility is that the amendments become effective not later than May 30, 1997. The Applicants therefore respectfully request that the Commission issue its order permitting this post-effective amendment to become effective as soon as practicable, and in any event no later than May 27, 1997. The Applicants hereby waive any recommended decision by a hearing officer or by any other responsible officer of the Commission and waive the 30-day waiting period between 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. The Applicants consent that the Office of Public Utility Regulation within the Division of Investment Management may assist in the preparation of the Commission's decision and/or order. 21. The following additional exhibits and financial statements are filed herewith: (a) Exhibits A.6 Terms of the NU System Money Pool, as modified with respect to the participation of NAEC and HEC. B.3 Summary of Terms of First Amendment and Waiver. *B.4 First Amendment and Waiver Agreement D.7 Application of CL&P to the Connecticut Department of Public Utility Control for approval of the issuance of first mortgage bonds as collateral for the Facility. *D.8 Certified copy of the Decision of the Connecticut Department of Public Utility Control approving the collateralization of the Facility. D.9 Petition of WMECO to the Massachusetts Department of Public Utilities for approval of the issuance of first mortgage bonds as collateral for the Facility. *D.10 Certified copy of the Order of the Massachusetts Department of Public Utilities approving the collateralization of the Facility. *F.2 Opinion of Counsel. H.7 Cash Receipts and Disbursements -- NAEC I.2 Proposed Form of Notice. *K.2 Schedule of Fees, Commissions and Expenses related to the matters covered by Post-Effective Amendment No. 2. (b) Financial Statements 1. North Atlantic Energy Corporation * 1.1 Balance Sheet, per books and pro forma as of December 31, 1996. 1.2 Statement of Income, per books and pro forma, for 12 months ended December 31, 1996 and capital structure, per books and pro forma, as of December 31, 1996. - ---------------------------- *to be filed by further post-effective amendment. 22. The Applicants respectfully request the Commission's approval of all transactions described herein, whether under the sections of the Act and rules thereunder enumerated herein or otherwise. SIGNATURES Pursuant to the requirements of the Public Utility Holding Company Act of 1935, as amended, the undersigned have duly caused this Amendment to be signed on behalf of each of them by the undersigned thereunto duly authorized. Date: April 24, 1997 NORTHEAST UTILITIES THE CONNECTICUT LIGHT AND POWER COMPANY WESTERN MASSACHUSETTS ELECTRIC COMPANY PUBLIC SERVICE COMPANY OF NEW HAMPSHIRE HOLYOKE WATER POWER COMPANY NORTH ATLANTIC ENERGY CORPORATION By: /s/ John H. Forsgren John H. Forsgren Executive Vice President and Chief Financial Officer EX-99 2 EXHIBIT A.6 PROPOSED TERMS OF THE NU MONEY POOL (Revised May, 1997) 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 (RRR), The Quinnehtuk Company (Quinnehtuk), Public Service Company of New Hampshire (PSNH), North Atlantic Energy Corporation (North Atlantic) and HEC Inc. (HEC). 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 NNECO, HWP, RRR, Quinnehtuk, PSNH, North Atlantic and HEC. 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. NU shall not be entitled to borrow from the Pool. 8. PSNH and North Atlantic shall not be entitled to borrow Surplus Funds that are attributable to contributions from WMECO until the Massachusetts Department of Public Utilities has issued an order authorizing WMECO to lend funds to PSNH or NAEC, as the case may be, through the Pool. 9. All short-term borrowing needs of members other than NU, which shall not be entitled to borrow from the Pool and PSNH, and North Atlantic, which may borrow only subject to the conditions set forth in paragraph 8, will be met by Surplus Funds in the Pool to the extent such funds are available. NNECO, HWP, RRR, Quinnehtuk, PSNH, North Atlantic and HEC may meet their short- term borrowing needs through Excess Funds made available from NU. 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 person 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) such other instruments as are permitted by Rule 40(a)(1) under the Act and approved by the Massachusetts Department of Public Utilities (the "DPU") 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. EX-99 3 EXHIBIT B.3 [INDICATIVE TERMS FOR DISCUSSION ONLY. THE SUMMARY THAT FOLLOWS IS SUBJECT TO CREDIT APPROVAL AND DOES NOT CONSTITUTE AN OFFER OR COMMITMENT] NORTHEAST UTILITIES THE CONNECTICUT LIGHT AND POWER COMPANY WESTERN MASSACHUSETTS ELECTRIC COMPANY Summary of Terms First Amendment and Waiver $313,750,000 Three-Year Revolving Credit Facility Facility: $313,750,000 Credit Agreement, dated as of November 21, 1996 (the "Original Credit Agreement"), among Northeast Utilities, The Connecticut Light and Power Company and Western Massachusetts Electric Company (the "Borrowers"; individually, a "Borrower"), the banks and co-agents named therein and Citibank, N.A., as administrative agent, as amended by the First Amendment and Waiver described in this Summary of Terms. Capitalized terms used in this Summary of Terms and not otherwise defined shall have the meanings ascribed thereto in the Original Credit Agreement. Waivers: Under the First Amendment and Waiver, the Lenders will waive, on a permanent basis, compliance by NU with the interest coverage ratio set forth in Section 7.03(b) of the Original Credit Agreement for the fiscal quarter ended December 31, 1996. Through amendments to Sections 7.03(a) (Common Equity Ratio) and 7.03(b) (Interest Coverage Ratio), the Lenders will effectively waive anticipated future non-compliances with those ratios. Amendment Fee: In consideration of the Majority Lenders entering into the First Amendment and Waiver, an Amendment Fee to each Lender executing the First Amendment and Waiver equal to 25 basis points of each such Lender's commitment, payable to the Agent on behalf of such Lenders on the Closing Date. Borrower Sublimits: Upon execution and delivery of the First Amendment and Waiver, the Borrower Sublimit for NU will be reduced from $150,000,000 to zero, and all outstanding Advances to NU will be repaid. If, for any two consecutive fiscal quarters, each Borrower shall maintain an interest coverage ratio of at least 2.50:1.0, the NU Sublimit shall be reinstated to $50,000,000. The Borrower Sublimit for WMECO and CL&P will be $150,000,000 and $313,750,000 respectively, provided, however, such Borrower Sublimits shall be reduced from time to time as necessary such that at all times the Borrower Sublimit of CL&P or WMECO, as the case may be, does not exceed the aggregate principal amount of the Collateral FMBs (as defined below) of CL&P or WMECO, respectively, securing the Facility. Closing Date: May 30, 1997, or such other date as may be agreed upon by the Borrowers and the Agents. Security: NU's obligations under the Facility will be unsecured. The obligations of CL&P and WMECO under the Facility will be secured by special series of first mortgage bonds of those Borrowers on the terms and in the manner set forth on Annex A to this Summary of Terms (the "Collateral FMBs"). Financial Covenants: Each of the following Financial Covenants shall be amended and restated as follows: Common Equity Ratio: Each of the Borrowers will be required to maintain at all times a ratio of Common Equity to Total Capitalization as follows:
1997 1998 and Thereafter NU (Consol.) 0.31:1.00 0.32:1.00 CL&P 0.31:1.00 0.32:1.00 WMECO 0.31:1.00 0.32:1.00
Interest Coverage Ratio: Each of the Borrowers will be required to maintain for each fiscal quarter in each fiscal year a ratio of Operating Income to Interest Expense as follows:
4Q 1Q and 2Q 3Q 1998 and 4Q and 1997 1998 thereafter thereafter NU --- 1.75:1.00 2.00:1.00 2:50:1:00 (Consol.) CL&P 1.25:1.00 1.50:1.00 2.00:1.00 2:50:1.00 WMECO 1.25:1.00 1.50:1.00 2.00:1.00 2.50:1.00
Dividend Paying Availability: Section 7.03(c) of the Original Credit Agreement will not be amended. Other Covenants: NU Debt. Section 7.02(d) of the Original Credit Agreement will be amended by increasing the amount of Debt permitted under clause (iii) thereof from $50,000,000 to $100,000,000. Furthermore, Schedule III (NU Debt) to the Original Credit Agreement will be amended to include NU's guarantee of the obligations of The Rocky River Realty Company under (i) the 8.81% Cigna Investments, Inc. Series A Note due 2007 and (ii) the 8.82% Cigna Investments, Inc. Series B Note due 2017. The aggregate amount outstanding under the aforementioned Notes as of December 31, 1996 was $38,444,385. The aforementioned Debt was inadvertently omitted from Schedule III at the time of the initial closing of the Original Credit Agreement. Limitations on First Mortgage Bonds, etc. Section 7.02(e) and such other sections of the Original Credit Agreement as determined by the Agents shall each be amended to permit CL&P and WMECO to issue the Collateral FMBs. Representations and Warranties: Section 6.01 of the Original Credit Agreement will be amended by adding appropriate representations and warranties of CL&P and WMECO concerning the validity, enforceability and lien priority of the Collateral FMBs (and such representations and warranties shall be accurate as of the Closing Date). Events of Default: Section 8.01 of the Original Credit Agreement will be amended by inserting the following additional Events of Default: (a) any Collateral FMB shall for any reason (iii) cease to be entitled to the benefits and security of the first mortgage indenture to which WMECO or CL&P, as the case may be, is a party, equally and ratably with all other mortgage bonds outstanding under such first mortgage indenture, (iv) become subject to any Lien, except for any Lien in favor of the Collateral Agent for the benefit of the Lenders, or (v) cease to be a legal, valid and binding obligation of WMECO or CL&P, as the case may be; or (b) at any time the first mortgage indenture to which WMECO or CL&P, as the case may be, is a party, shall for any reason fail to constitute a valid and direct first priority Lien, upon substantially all the properties referred to in the granting clauses of such first mortgage indenture; or the Collateral Agent shall for any reason fail to have a valid and perfected first priority security interest in the related Collateral FMB. Conditions Precedent to Effectiveness: (a) Finalized and fully-executed definitive First Amendment and Waiver, duly issued Collateral FMBs and other related documents (the "Amendment Documents") satisfactory to the Agents and the Majority Lenders. (b) Certified copies of the resolutions of the Board of Directors of each Borrower authorizing the execution, delivery and performance of the Amendment Documents to be delivered by it. (c) A certificate of incumbency signed by the Secretary or an Assistant Secretary of each Borrower certifying the names and true signatures of the officers of such Borrower authorized to sign the Amendment Documents to be delivered by it. (d) Certified copies of the orders of the Securities and Exchange Commission ("SEC"), the Connecticut DPUC and the Massachusetts DPU approving the transactions contemplated by the Amendment Documents, and any other governmental and regulatory approval, order, etc., necessary for the consummation of the transactions contemplated by the Amendment Documents. (e) Opinions of counsel for the Borrowers acceptable to the Agents, as to such matters as the Majority Lenders may reasonably request. (f) Copies of audited consolidated financial statements of each Borrower, as at and for the fiscal year ended December 31, 1996, which shall be satisfactory to the Majority Lenders. Governing Law: State of New York except that the Collateral FMBs will be governed by the laws of Connecticut (in the case of CL&P) and Massachusetts (in the case of WMECO). Counsel to the Administrative Agent: King & Spalding. Expenses: The Borrowers shall reimburse the Administrative Agent for all of its reasonable out-of-pocket expenses (including fees and expenses of counsel to the Administrative Agent) incurred in the negotiation and execution of the Amendment Documents, whether the transaction contemplated is actually completed or the Amendment Documents are signed. All other terms and conditions of the Amendment Documents shall be subject to further discussion and mutual agreement. ANNEX A Security: The obligations of CL&P and WMECO under the Facility will be secured as follows: (a) Each of CL&P and WMECO will cause to be issued to Citibank, N.A., as collateral agent (the "Collateral Agent"), a single First Mortgage Bond of a special series created for the purpose of securing such Borrower's principal, interest and Facility Fee obligations under the Facility (in each case a "Collateral FMB") in a principal amount equal to the Borrower Sublimit of CL&P or WMECO, as applicable. (b) Each Collateral FMB will rank pari passu with all other first mortgage bonds of CL&P or WMECO, as the case may be, and be entitled to the benefits of the relevant first mortgage indenture. (c) Each Collateral FMB will bear interest in such amounts and be payable at such times as is sufficient to pay all interest on the Advances made to CL&P or WMECO, as the case may be, under the Facility and each such Borrower's share of the Facility Fee payable under the Facility. (d) Payments by CL&P or WMECO, as the case may be, of its principal, interest or Facility Fee obligations under the Facility shall be deemed to satisfy the corresponding payment obligations under the related Collateral FMB and vice versa. (e) Upon any acceleration of the Advances made to CL&P or WMECO, a like principal amount of the related Collateral FMB shall become immediately due and payable. EX-99 4 EXHIBIT D.7 March 21, 1997 Mr. Robert J. Murphy Executive Secretary Department of Public Utility Control One Central Park Plaza New Britain, CT 06051 Re: The Connecticut Light and Power Company Application to Issue First and Refunding Mortgage Bonds Dear Mr. Murphy: The Connecticut Light and Power Company ("CL&P" or the "Company"), a public service company within the meaning of Section 16-1 of the General Statutes of Connecticut, Revision of 1958, hereby applies for the Department's approval, pursuant to Section 16-43 of said General Statutes, of the issue and sale by the Company of its first and refunding mortgage bonds (the "Bonds") during the period beginning April 21, 1997 and ending June 30, 1997. CL&P is requesting approval to issue and sell Bonds, as follows: (i) up to $200 million in principal amount of Bonds to be used for "new money" purposes, which is generally the repayment of short-term borrowings; and (ii) up to $313.75 million in principal amount of Bonds to secure its obligations to repay borrowings under a revolving credit agreement; provided, however, the aggregate principal amount of Bonds to be issued and outstanding at any one time will not exceed $430 million. The Company adopts in support of this application the written testimony and exhibits listed in Appendix I hereto. This application, the written testimony and exhibits listed in Appendix I hereto set forth all the documents required to be filed by the Company and which the Company deems necessary and desirable to support the granting of this application. The following 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 B. The Company is a corporation specially chartered by the General Assembly of the State of Connecticut. C. The name, title, address and telephone number of the attorney or other person to whom correspondence or communications in regard to this application are to be addressed: John B. Keane Vice President and Treasurer The Connecticut Light and Power Company c/o Northeast Utilities Service Company P.O. Box 270 Hartford, Connecticut 06141-0270 (860) 665-3541 and Jane P. Seidl, Esq. Senior Counsel The Connecticut Light and Power Company c/o Northeast Utilities Service Company P.O. Box 270 Hartford, Connecticut 06141-0270 (860) 665-5051 The Company respectfully requests the approval of the Department pursuant to said Section 16-43 of the General Statutes of Connecticut of the issue(s) and sale(s) of the Bonds as set forth herein. To meet its financing needs, the Company requests approval by April 21, 1997. Enclosed herewith are one (1) original and ten (10) copies of this application, together with prepared testimony and exhibits. Very truly yours, THE CONNECTICUT LIGHT AND POWER COMPANY By__/s/ John B. Keane____________________ John B. Keane Vice President and Treasurer The Connecticut Light and Power Company Exhibit A TESTIMONY OF JOHN B. KEANE Q. Will you please state your position with The Connecticut Light and Power Company (CL&P or the Company)? A. I am Vice President and Treasurer of the Company. I am also Vice President and Treasurer of Northeast Utilities Service Company (the Service Company) and of Northeast Utilities. Q. Will you please state the relationship of the Service Company to CL&P? A. The Service Company is a system service company that provides, among other things, financial planning services to the affiliated companies of the NU system. The applicant in this proceeding, CL&P, together with Public Service Company of New Hampshire, Western Massachusetts Electric Company, North Atlantic Energy Corporation and Holyoke Water Power Company, are the largest operating companies in this system. As the Treasurer of the Service Company, I have participated in the financial planning for each of these operating companies, including CL&P. Q. Will you please describe the application that is the subject of this hearing? A. The Company is requesting the Department's approval to issue first and refunding mortgage bonds in the aggregate principal amount of up to $430 million (the Bonds) on or before June 30, 1997. Of this amount, CL&P requests approval to issue up to $313.75 million in principal amount of Bonds to secure its obligations to repay borrowings under its 1996 revolving credit agreement with banks. CL&P also requests approval to issue and sell for cash up to $200 million in principal amount of Bonds for the purpose of repaying short-term borrowings and other purposes as described more fully below. Whether CL&P issues Bonds as security to repay revolving credit borrowing, or issues and sells Bonds for cash, or does both, the aggregate principal amount of Bonds to be issued and outstanding at any one time will not exceed $430 million. USE OF PROCEEDS New Money Q. How will the Company use the net proceeds from the sale(s) of the Bonds? A. Up to $200 million of the proceeds from the issue and sale of the Bonds would be used to repay short-term borrowings (consisting of bank loans, commercial paper and system company money pool borrowings), which were incurred or are expected to be incurred to finance the Company's maturing debt, sinking fund requirements and for general working capital purposes, including costs associated with the current outages at the Millstone nuclear units. The Company generally refers to this type of proceeds as "new money" and, accordingly, the bonds to be issued for the purposes set forth above are referred to herein as New Money Bonds. The Company had no short-term borrowings outstanding as of December 31, 1996. Attached as Exhibit B.6 is a forecast of the Company's "new money" financing requirements during the time period covered by this application. Security for Revolving Credit Agreement Q. Please briefly describe the parameters of the Company's 1996 revolving credit agreement. A. After a lengthy negotiation and syndication process, a total of twelve banks committed to a three-year revolving credit facility totaling $313.75 million on November 21, 1996 (the Revolving Credit Agreement). In addition to the Company, which can borrow up to the entire amount available under the Revolving Credit Agreement, certain other companies in the NU system may borrow funds under the facility. The facility is currently unsecured and the Company may choose from among a number of variable interest rate modes for each borrowing. The lenders from which CL&P may borrow funds under the Revolving Credit Agreement are collectively referred to herein as the Banks. Q. Why is the Company seeking authority to secure its borrowings under the Revolving Credit Agreement at this time? A. In light of the Company's recent nuclear difficulties at the Millstone plants, and the financial impacts resulting from increased costs associated with the current nuclear outages, the Company forecasts that it will not be able to meet certain financial covenants required by the Revolving Credit Agreement. In response to the Company's requests for amendments to the agreement so that the Company's access to funds to meet its needs continues in effect, the Banks are seeking security to support the Company's obligations to repay balances that might be outstanding from time to time under the Revolving Credit Agreement and the interest and facility fees relating thereto. Because the Revolving Credit Agreement is an important element in enabling the Company to maintain its financial flexibility and its ability to meet unanticipated needs for working capital funds, the Company has been working closely with the Banks to fulfill their request. As the Banks have indicated that first mortgage bonds would be acceptable as a form of security, the Company is seeking authorization from the Department to issue a new series of Bonds in an aggregate principal amount of up to $313.75 million (which is the total available commitments to the Company under the Revolving Credit Agreement) to secure the Company's principal, interest and facility fees under such agreement (the Collateral Bonds). Upon issuance of the Collateral Bonds, the Banks will receive the benefit of a first mortgage lien on substantially all of the Company's physical property and franchises, including the Company's generating stations (but not its interest in the four regional Yankee nuclear plants) and its transmission and distribution facilities, pari passu with other outstanding first mortgage bonds. Q. Has the Company issued first mortgage bonds in the past to secure other financial obligations? A. Yes. In the January 15, 1997 Decision relating to the Application of The Connecticut Light and Power Company for Approval of Financing of Pollution Control Facilities (Reopened), Docket No. 96-03-26, the Department granted the Company's request to, among other things, issue a new series of bonds in the aggregate principal amount of $62 million as security to replace a note issued by the Connecticut Development Authority and a second mortgage on the Company's interest in Millstone 1. Those bonds were issued on January 23, 1997. In addition, in the December 13, 1989 Decision relating to the Application of The Connecticut Light and Power Company for Approval of Financing of Pollution Control Bonds, Docket No. 89-11-12, the Department approved the issuance of a new series of first mortgage bonds in the aggregate principal amount of $20 million to secure the Company's borrowing from the Industrial Development Authority of the State of New Hampshire of the proceeds of its issuance of pollution control revenue bonds. Those bonds were issued on December 21, 1989. Q. Did the Company consider any alternatives to securing the Revolving Credit Agreement with first mortgage bonds? A. Yes, however, the Company's current financial condition is such that the Banks' willingness to amend the Revolving Credit Agreement is dependent on the availability of security in the form of first mortgage bonds. FINANCING REQUIREMENTS Q. Does CL&P expect to meet its remaining 1997 financing requirements solely through the sale of the Bonds? A. No. In addition to the sale of Bonds, the Company expects that its financing requirements will be met through the internal generation of funds and by the continued utilization of a nuclear fuel trust, bank notes, sales of accounts receivable and borrowings under the NU system money pool. Exhibit B.6 provides the detail on the Company's financing requirements, internal generation of funds and financing sources. SALES PROCESS Q. Will you please describe the process by which the New Money Bonds will be sold? A. Yes. The Company expects to sell the New Money Bonds either in a public offering, through direct negotiations with underwriters, or through a private placement, depending on which is determined to be the most beneficial at the time of sale. At present, if the Company remains eligible to sell the New Money Bonds under a Form S-3 registration statement as described below, the Company believes it would issue and sell the New Money Bonds in a public offering through direct negotiations with underwriters. However, if the Company is not eligible to use a Form S-3 registration statement, the Company believes it is likely that the issue and sale of the New Money Bonds could be accomplished in a more timely manner and on more favorable terms through a private placement whereby the terms of the New Money Bonds (including the price and the interest rate) would be negotiated with one, or a limited group of, institutional investors, through an investment banking firm hired to manage that private placement. The Company believes that either of these scenarios, both of which involve negotiation of the terms of the New Money Bonds, would result in more favorable terms than if the New Money Bonds were to be sold in a competitively bid public offering because of the adverse publicity surrounding the operation of the Company's nuclear plants and the need to ensure that purchasers of the Bonds are well-informed and educated as to the advantages of the New Money Bonds notwithstanding the near- term nuclear concerns. Q. Will you please describe the process by which the Collateral Bonds will be issued? A. Yes. The Company will cause to be issued to Citibank, N.A., as collateral agent for the Banks, a series of Bonds created for the purpose of securing the Company's principal, interest and facility fee obligations under the Revolving Credit Agreement in a principal amount of up to $313.75 million. Certain terms of the Collateral Bonds, other than as specifically set forth in the Company's Application and herein, will be negotiated between the Company and the Banks prior to issuance of the Bonds. DESCRIPTION OF THE BONDS Q. Will you please describe the Bonds proposed to be offered for sale? A. CL&P proposes to issue and sell, in one or more offerings, up to a total of $430 million aggregate principal amount of Bonds. Of this amount, up to $200 million can be used for "new money" purposes, which is generally to repay short-term borrowings and other purposes described above. The remaining amount, up to $313.75 million, can be used only to secure the Company's repayment obligations under the Revolving Credit Agreement. The New Money Bonds would be designated as the "First and Refunding Mortgage ____% Bonds," followed by the year of sale and a sequentially lettered series. The first series of New Money Bonds to be issued will be designated the "First and Refunding Mortgage __% Bonds, 1997 Series A." The first series of Collateral Bonds to be issued will be designated the "First and Refunding Mortgage Collateral Bonds," followed by the year of sale and a sequentially lettered series. The New Money Bonds will have a maturity of not more than five years. The Collateral Bonds will have a term of not more than three years; it is anticipated that the term(s) of the Collateral Bonds issued to secure the Company's borrowings will reflect the term of the underlying credit obligation. The interest rate and the price, exclusive of accrued interest, if any, to be paid to CL&P (which shall not be less than 98% nor more than 100% of the principal amount thereof) for the New Money Bonds will be determined through negotiation, as described above. The Collateral Bonds will bear interest in such amounts as is sufficient to pay all interest on advances made to the Company under the Revolving Credit Agreement and the related facility fee. The Bonds will be issued under the Indenture of Mortgage and Deed of Trust dated as of May 1, 1921, between CL&P and Bankers Trust Company, Trustee, as amended and supplemented (the Indenture), and as to be further supplemented in the case of each series of the Bonds, by a supplemental mortgage indenture (the Supplemental Mortgage Indenture). All outstanding bonds are secured equally and ratably by the direct first mortgage lien of the Indenture on substantially all of the properties and franchises owned by the Company. Q. Please describe the redemption provisions applicable to the Bonds. A. The redemption schedule for the New Money Bonds will be determined at the time of the offering based on market conditions and investor requirements at the proposed time of issuance for each series. In the past, it has been customary for the Company to issue a series of bonds with provisions prohibiting redemption at the applicable general redemption price prior to a date approximately five years after issuance. Bonds issued with maturities of five or fewer years have not been refundable throughout the life of the bonds. While the Company may issue series of bonds with similar terms in the future, market conditions may enable the Company to achieve additional cost savings through the issuance of series of Bonds with shorter maturities and/or more restrictive redemption provisions. In order to enable the Company to design a redemption schedule that is most favorable to the Company while still being acceptable to the financial markets, the Company is requesting the flexibility to determine the redemption schedule through negotiation with underwriters or other purchasers. Q. Is a copy of the Supplemental Mortgage Indenture, which sets out the terms of each series of the Bonds, filed with this Department? A. A copy of the Form of the Supplemental Mortgage Indenture to be completed at the time of sale is filed herewith as Exhibit B.1. Q. Do you contemplate any other changes in the terms of the Bonds? A. Due to favorable market conditions, the Company has in recently issued series been able to minimize the impact of two burdensome Indenture provisions. The Company has not been required to reset the restriction on its ability to pay dividends. Also, the Company has negotiated terms that will, in the future, eliminate the annual sinking and improvement fund which requires it to annually give the Trustee property or cash equal to one percent of the bonds outstanding. The Company is uncertain if future market conditions will continue to provide such opportunities. SEC JURISDICTION Q. Does the Securities and Exchange Commission (SEC) have jurisdiction over the issuance and sale of the Bonds? A. Yes. The Company is subject to the jurisdiction of the SEC under the Public Utility Holding Company Act of 1935, as amended (the 1935 Act). However, as long as the Company complies with Rule 52 under the 1935 Act, which includes a requirement that the Department approve the issue and sale of the Bonds, no approval of the issue and sale of the Bonds is required under that Act. In addition, the Company will file one or more registration statements, on Form S-3 or other appropriate form, with the SEC under the Securities Act of 1933, as amended (the 1933 Act), which will allow it to offer the New Money Bonds for sale pursuant to a public offering, as permitted by Rule 415 under the 1933 Act. A draft of the Registration Statement for the New Money Bonds is filed herewith as Exhibit B.4. The prospectus, in substantially the form of the prospectus contained in the Registration Statement for the New Money Bonds, will be used as the basic prospectus in connection with the solicitation of offers for the New Money Bonds in a negotiated public offering if the Company's securities ratings make it eligible to use Form S-3. At the present time, the Company's Bonds are rated investment grade, which is a requirement for utilizing Form S-3.. The interest rate, maturity, principal amount, initial public offering price, redemption prices, other terms with respect to the New Money Bonds and a description of the underwriting arrangements will be added to the prospectus contained in the Registration Statement by prospectus supplements after such terms have been determined. If the ratings of the Company's Bonds are downgraded and if the Company determines that it would be advantageous to proceed with a public issue of the New Money Bonds under those circumstances, then the Company would register the New Money Bonds on Form S-1. A Form S-1 registration statement is considerably more detailed and complex, as it does not rely on the incorporation of previously filed SEC documents by reference, as does Form S-3. The additional expense of preparing an S- 1 is a factor that the Company would consider under those circumstances in weighing the advisability of such an issuance. If the Company were to issue any portion of the New Money Bonds in a private placement, an offering memorandum containing essentially similar information to that required to be set forth in a registration statement would be prepared and distributed to potential purchasers. A copy of the Company's annual report to the SEC on Form 10-K for the twelve months ended December 31, 1996 which is to be incorporated by reference into the Registration Statement, will be filed as Exhibit F promptly after filing with the SEC (currently scheduled for March 21, 1997). A copy of NU's most recent proxy statement is filed herewith as Exhibit C and copies of NU's 1996 annual report to shareholders and CL&P's 1996 report to shareholders will be filed as Exhibits D and E, respectively, promptly after the filing of such reports with the SEC. As the Collateral Bonds are not being sold publicly or privately, but are being issued solely as security for repayment of credit borrowings, no registration statement or private placement memorandum will be distributed in connection with the issuance of such bonds. ADDITIONAL INFORMATION Q. Are copies of the offering papers proposed to be used in connection with the proposed sale of the Bonds filed with the Department? A. The proposed form of Underwriting Agreement for the New Money Bonds is filed herewith as Exhibit B.3. It is expected that if the New Money Bonds are issued in a private placement, the purchase agreement will have terms which are similar to those set forth in the form of Underwriting Agreement. Q. Have the issue and sale of the Bonds been approved by the Company's Board of Directors? A. Yes. The Board of Directors adopted initial resolutions approving the proposed issue and sale of the Bonds on March 10, 1997. Certified copies of the resolutions are filed herewith as Exhibit B.1. Q. Have you provided financial statements of the Company? A. The December 31, 1996 (Annual Report to Shareholders) financial statements will be filed as Exhibit E promptly after the filing of such report with the SEC. Q. Have you prepared exhibits that show the effect of the proposed new financings on the balance sheet and income statements of this Company? A. Yes. Exhibit B.5 includes a balance sheet, income statement, statement of retained earnings capital structure and explanation of pro forma adjustments for the twelve months ended December 31, 1996 (preliminary) for CL&P , which are adjusted to reflect the issuance of $430 million of Bonds. The Company's final December 31, 1996 financial statements will be included in Exhibit E when they are filed. The pro forma adjustments reflect the issuance of $200 million of Bonds at an assumed interest rate of 7.75 percent and secured short-term borrowings of $230 million. Q. Have you prepared statements to show the estimated expenses to be paid by the Company in connection with the proposed issue of the Bonds? A. Yes. The statements are included herein as Exhibit B.7. Q. Are you requesting, as the Company did in Dockets 92-10-21 and 94-07- 16, a change from prior procedures to enable the Company to issue the Bonds within defined limits without the need for a reopening of this docket? A. Yes, but only with respect to the Collateral Bonds. The practice prior to 1993 had been for the Company to request that the Department reopen the docket for a hearing and special meeting to address the terms of new securities on the day the securities are priced (the Pricing Date). This practice restricted the Company's ability to move quickly in rapidly-changing interest and dividend rate environments and created unnecessary administrative burdens for the Company and the Department. In Dockets 92-10-21 and 94-07-16, the Department authorized the Company to issue and sell bonds within certain parameters without a reopening of the docket and special meeting.. The Company submits that continued authorization to use the more flexible authority granted in Dockets 92-10-21 and 94-07-16 is still in the public interest in connection with the issue of Collateral Bonds due to the nature of such bonds. The Collateral Bonds will be issued as evidence of the Company's indebtedness to repay loans from the Banks. These Bonds will be issued in a principal amount not to exceed the principal amount of funds available to the Company under the Revolving Credit Agreement, which is $313.75 million, and will bear interest in such amounts as is sufficient to pay interest, and the related facility fee, on all advances made under the Revolving Credit Agreement. If conditions arise under which the Company would seek to issue Collateral Bonds upon terms other than as proposed herein, the Company will request a reopening of the docket, a hearing and a special meeting. The Company believes that the issuance of Collateral Bonds to secure its credit obligations as proposed herein is prudent and the commencement of a hearing on a pricing date and the request for approval of the specific terms of the Collateral Bonds by the Department are not necessary in connection with such issuance. The Company proposes that a reopening of the docket for a hearing and special meeting not be required for the Company to issue Collateral Bonds under this application so long as the following parameters are met: 1. The Collateral Bonds will have a maturity of not less than one nor more than three years. 2. The Collateral Bonds will be issued on or before June 30, 1997. 3. The Collateral Bonds will bear interest in such amounts as is sufficient to pay interest and the related facility fee on all advances made under the Revolving Credit Agreement. 4. The Company will file with the Department within two days of the closing relating to the issuance of Collateral Bonds: a. The principal amount, date of issuance and years to maturity of the issue; b. Redemption provisions and any other features of the Collateral Bonds; and c. Estimated issuance costs. Q. What procedures does the Company propose to follow in connection with the issuance of the New Money Bonds? As the Company expects to negotiate the terms of the New Money Bonds with underwriters or other investors, the Company will request that the Department reopen the docket for a hearing and special meeting to address such terms on the date the New Money Bonds are priced. As explained above, this is the practice that was followed by the Company prior to 1993 for public offerings. Q. Does that complete your testimony, Mr. Keane? A. Yes. I have nothing further to offer at this time. At the reconvened hearing on the day of the pricing for the New Money Bonds, the Company will present evidence with respect to the results of negotiation regarding the issuance and sale of the New Money Bonds. THE CONNECTICUT LIGHT AND POWER COMPANY APPENDIX 1 Testimony and Exhibits filed as part of Application to Issue and Sell First and Refunding Mortgage Bonds A. Testimony of John B. Keane, Vice President and Treasurer of The Connecticut Light and Power Company. B. Exhibits to Testimony 1. Draft of Supplemental Mortgage Indenture. 2. Form of Resolutions of Board of Directors of The Connecticut Light and Power Company approving issue and sale of Bonds, to be adopted on March 7, 1997. 3. Draft of Underwriting Agreement for the Bonds. 4. Draft of Registration Statement on Form S-3 for the Bonds. 5. The Connecticut Light and Power Company Pro Forma Financial Statements reflecting issuance of $430 million of Bonds. 6. The Connecticut Light and Power Company external "New Money" Financing Requirements, six months ending June 30, 1997. 7. Estimated expenses to be incurred by The Connecticut Light and Power Company for Bond issue. C. 1996 Proxy Statement of Northeast Utilities. D. 1996 Annual Report to Shareholders of Northeast Utilities. E. 1996 Annual Report to Shareholders of The Connecticut Light and Power Company. F. 1996 Form 10-Ks of The Connecticut Light and Power Company and Northeast Utilities. EX-99 5 EXHIBIT D.9 April 7, 1997 Ms. Mary Cottrell Secretary Department of Public Utilities 100 Cambridge Street Boston, MA 02202 RE: Petition of Western Massachusetts Electric Company for Approval of the Issue and Sale of First Mortgage Bonds Dear Ms. Cottrell: Enclosed is Western Massachusetts Electric Company's (the "Company") original and nine copies of a petition for approval of the issue and sale of First Mortgage Bonds. The testimony of John B. Keane, Vice President and Treasurer of the Company, and additional exhibits will be filed at least seven days before any hearing. In addition to other matters, Mr. Keane's testimony will address the relationship of the proposed financing to the current electric utility restructuring initiatives in Massachusetts. A check in the amount of $23,100.00 is enclosed in payment of the filing fee. Please contact Jane P. Seidl, Senior Counsel, at (860) 665-5051 or, in her absence, the undersigned at (860) 665-3532 to schedule a hearing on this matter. Please acknowledge receipt of this petition by stamping the enclosed copy of this letter and returning it to me in the enclosed stamped, self- addressed envelope. Very truly yours, /s/ Jeffrey C. Miller Jeffrey C. Miller Assistant General Counsel Enclosures COMMONWEALTH OF MASSACHUSETTS DEPARTMENT OF PUBLIC UTILITIES PETITION OF WESTERN ) MASSACHUSETTS ELECTRIC ) COMPANY FOR APPROVAL ) D.P.U. ________________ OF ISSUANCE OF FIRST ) MORTGAGE BONDS AND ) PREFERRED STOCK ) A. INTRODUCTION 1. This is a petition by Western Massachusetts Electric Company (WMECO or the Petitioner) for approval by the Department of Public Utilities (the Department) under Chapter 164, Section 14 of the Massachusetts General Laws to issue first mortgage bonds in the aggregate principal amount of up to $150 million (the Bonds). The Bonds will be issued during the period from April 1, 1997 through June 30, 1997 to secure the Petitioner's obligations to repay its short-term borrowings under its 1996 revolving credit agreement with banks. The aggregate principal amount of Bonds to be issued hereunder will be reduced by the principal amount of first mortgage bonds, if any, to be issued pursuant to the authority granted in D.P.U. 96-96.{1} Accordingly, the aggregate principal amount of first mortgage bonds to be issued and outstanding at any one time pursuant to this Petition and D.P.U. 96-96 will not exceed $150 million. **FOOTNOTES** {1} In its Decision dated March 21, 1997 in D.P.U. 96-96, the Department authorized the Petitioner to issue up to an aggregate principal amount of $60 million of its first mortgage bonds and/or Class A preferred stock through October 1, 1998. B. BACKGROUND 1. The Petitioner is an electric company duly organized and existing under the laws of the Commonwealth. 2. The exact legal name of the Petitioner and its principal place of business are: Western Massachusetts Electric Company 174 Brush Hill Avenue West Springfield, Massachusetts 01089 3. The name, title, address and telephone number of the attorneys or other persons to whom correspondence or communications in regard to this application are to be addressed: Mr. John B. Keane Vice President and Treasurer Western Massachusetts Electric Company c/o Northeast Utilities Service Company P.O. Box 270 Hartford, Connecticut 06141-0270 (860) 665-3541 and Jane P. Seidl, Esq. Western Massachusetts Electric Company c/o Northeast Utilities Service Company P.O. Box 270 Hartford, Connecticut 06141-0270 (860) 665-5051 and Stephen Klionsky, Esq. Western Massachusetts Electric Company 260 Franklin Street, 21{st} Floor Boston, Massachusetts 02110-3179 (617) 345-4778 4. The Petitioner currently has issued and outstanding 1,072,471 shares of its Common Stock with a par value of $25 per share; 200,000 shares of 7.72% Preferred Stock, Series B, with a par value of $100 per share and 840,000 shares of 7.6% Class A Preferred Stock, 1987 Series, with a par value of $25 per share. 5. As of December 31, 1996, the Petitioner had issued and outstanding long-term debt and other long-term obligations in the aggregate principal amount of approximately $335,720,325, as follows: (a) First Mortgage Bonds in the aggregate principal amount of $259,500,000, consisting of six outstanding series, Series F, G and V through Y, with maturity dates from 1997 to 2024 and interest rates ranging from 5.750 percent for the Series F Bonds to 7.75 percent for the Series V and Y Bonds; (b) Pollution Control Notes in the aggregate principal amount of $53,800,000 due in 2028; and (c) Long-term obligations of approximately $37,055,000 for spent fuel disposal costs. C. USE OF BONDS AS COLLATERAL The Petitioner is hereby requesting approval to issue up to $150 million in principal amount of Bonds to secure its obligations to repay certain short-term revolving credit borrowings. After a lengthy negotiation and syndication process, a total of twelve banks committed to a revolving credit facility totaling $313.75 million on November 21, 1996 (the Revolving Credit Agreement) which expires in November 1999. In addition to the Petitioner, which can currently borrow up to $150 million under the Revolving Credit Agreement, certain other companies in the NU system may borrow funds under the facility. The facility is currently unsecured and the Petitioner may choose from among a number of variable interest rate modes for each borrowing. The lenders from which WMECO may borrow funds under the Revolving Credit Agreement are collectively referred to herein as the Banks. In light of WMECO's recent nuclear difficulties at the Millstone plants, and the financial impacts resulting from increased costs associated with the current nuclear outages, the Petitioner forecasts that it will not be able to meet certain financial covenants required by the Revolving Credit Agreement, for one or more quarters of 1997. If the Petitioner fails to meet these covenants, it would not be permitted to borrow under the Revolving Credit Agreement and would be obligated to repay any borrowings outstanding thereunder, unless waived by the Banks. In response to the Petitioner's requests for the amendments to the agreement so that WMECO's access to funds to meet its needs continues in effect, the Banks are seeking security to support WMECO's obligations to repay balances that might be outstanding from time to time under the Revolving Credit Agreement and the interest and facility fees relating thereto. Because the Revolving Credit Agreement is an important element in enabling the Petitioner to maintain its financial flexibility and its ability to meet unanticipated needs for working capital funds, the Petitioner has been working closely with the Banks to fulfill their request. The Banks have indicated that first mortgage bonds would be acceptable as a form of security. Accordingly, WMECO is seeking authorization from the Department to issue a new series of Bonds in an aggregate principal amount of up to $150 million to secure WMECO's principal, interest and facility fees under such agreement. Upon issuance of the Bonds, the Banks will receive the benefit of a first mortgage lien on substantially all of the WMECO's physical property and franchises, including WMECO's generating stations (but not its interest in the four regional Yankee nuclear plants) and its transmission and distribution facilities, pari passu with other outstanding first mortgage bonds. To the extent that the Petitioner issues first mortgage bonds in the aggregate principal amount of up to $60 million, as authorized in D.P.U. 96-96, the principal amount of Bonds to be issued hereunder will be decreased by a like amount. The Petitioner will base its decision on the amount and type of first mortgage bonds to be issued under the authority granted in D.P.U. 96-96 on prevailing market conditions for its securities and cash requirements at the time of proposed issuance. D. NET PLANT TEST The Petitioner believes that the net plant test does not apply because the Bonds are contingent obligations as to which Petitioner will have no payment requirement unless the underlying short-term debt to which they relate is not paid. However, if the net plant test were to apply to the full $150 million of Bonds referred herein, the Petitioner would meet the test because its net utility plant (utility plant less accumulated depreciation and less construction work in progress), which includes nuclear fuel and fossil inventories, is equal to or in excess of its outstanding stock (common and preferred) (not including retained earnings) and long-term debt. As of December 31, 1996, the Petitioner had net utility plant of at least $783,404,000 while its outstanding stock and long-term debt was $568,165,000.{2} E. ISSUANCE PROCESS The Petitioner hereby requests that the Department authorize the Petitioner to issue the Bonds within the parameters set forth in this Petition. The Petitioner will cause to be issued to Citibank, N.A., as collateral agent for the Banks, a series of Bonds created for the purpose of securing the Petitioner's principal, interest and facility fee obligations under the Revolving Credit Agreement in a principal amount of up to $150 million. Certain terms of the Bonds, other than as specifically set forth herein, will be negotiated between the Company and the Banks prior to issuance of the Bonds. F. SEC JURISDICTION The Petitioner is subject to the jurisdiction of the Securities and Exchange Commission (SEC) under the Public Utility Holding Company Act of 1935, as amended (the 1935 Act). However, as long as the Petitioner complies with Rule 52 under the 1935 Act, which includes a requirement that the Department approve the issue of the Bonds, no approval of the issue of the Bonds is required under that Act. A copy of WMECO's annual report to the SEC on Form 10-K for the twelve months ended December 31, 1996 is filed as Exhibit 3. As the Bonds are not being sold publicly or privately, but are being issued solely as security for repayment of credit borrowings, no registration statement or private placement memorandum will be distributed in connection with the issuance of such bonds. G. DESCRIPTION OF THE BONDS 1. The Petitioner proposes to issue, on or before June 30, 1997, pursuant to this Petition up to a total of $150 million aggregate principal amount of Bonds. The Bonds will be used only to secure the Petitioner's repayment obligations under the Revolving Credit Agreement. The Bonds will have a term of not more than three years; but in no event exceeding the remaining term of the Revolving Credit Agreement. The Bonds will bear interest in such amounts as is sufficient to pay all interest on advances made to WMECO under the Revolving Credit Agreement and the related facility fee, subject to a cap amount which may be negotiated. 2. In order to enable the Petitioner to design redemption and/or reacquisition terms and other provisions that are favorable to the Petitioner while still being acceptable to the Banks, the Petitioner is requesting the flexibility to determine redemption, reacquisition and other terms at the time of issuance of the Bonds. Similarly, the Petitioner seeks the flexibility to determine, at the time of the issuance based upon market conditions, whether the Bonds shall have a sinking fund provision. 3. The Bonds would be issued under and secured by the First Mortgage Indenture and Deed of Trust dated as of August 1, 1954, between the Petitioner and State Street Bank and Trust Company, Successor Trustee, as heretofore supplemented and amended by indentures supplemental thereto, and as to be further supplemented by a supplemental indenture setting out the terms of the Bonds. 4. The issuance of the Bonds would be consummated on or before June 30, 1997. H. TESTIMONY AND EXHIBITS 1. At least seven days before the hearing on this petition, the Petitioner will file in support of this petition the testimony and those exhibits not listed with an asterisk in Appendix I hereto. Those exhibits listed with an asterisk are being filed with this petition. WHEREFORE YOUR PETITIONER PRAYS that this Honorable Department will determine pursuant to Section 14 of Chapter 164 of the General Laws of Massachusetts: (a) That the issue by the Petitioner of up to $150 million aggregate principal amount of the Bonds is reasonably necessary to enable the Petitioner to secure its obligations to repay borrowings under the Revolving Credit Agreement; (b) That the Bonds will have a maturity of not more than three years; (c) That the Bonds shall bear interest at such rates as is sufficient to pay the interest and the related facility fee on all advances made under the Revolving Credit Agreement, subject to a cap amount which may be negotiated; and (d) That the Department will make such other orders with respect to the proposed issue of the Bonds as it shall deem proper. Dated this 7th day of April, 1997. Respectfully submitted, WESTERN MASSACHUSETTS ELECTRIC COMPANY By__/s/__________________________________ John B. Keane Vice President and Treasurer **FOOTNOTES** {2} This calculation excludes construction work in progress and retained earnings as in the Department's Decision in D.P.U. 96-96. APPENDIX I The following testimony and exhibits will be filed as part of the petition of Western Massachusetts Electric Company (WMECO) for the Department of Public Utilities' approval for the issuance of up to $150 million aggregate principal amount of its first mortgage bonds (the Bonds). Those exhibits noted with an asterisk are being filed with this initial petition and the testimony and remaining exhibits will be filed at least seven days prior to a hearing on this matter. 1. Testimony of Mr. John B. Keane, Vice President and Treasurer of WMECO. 2. Proposed form of Supplemental Indenture. *3. Copies of WMECO's 1996 Annual Report and 1996 Form 10-K. 4. Resolutions of the Board of Directors dated April 14, 1997. *5. Pro Forma Financial Statements as of December 31, 1996. 5.1 WMECO Pro Forma Financial Statements reflecting issuance of $150 million of Bonds. 5.2 Northeast Utilities Pro Forma Financial Statements reflecting issuance of $150 million of Bonds. 6. Copy of the proposed application to the Connecticut Department of Public Utility Control. 7. Cash Forecast (including summary of the construction program and nuclear expenditures) for January 1997 through June 1997. 8. Copy of the Northeast Utilities Proxy Statement dated April 30, 1997. *9. WMECO Net Plant Test. EX-99 6 NORTH ATLANTIC ENERGY COMPANY EXHIBIT H.7 PROJECTED MONTH ENDING SHORT-TERM DEBT LEVEL (THOUSANDS OF DOLLARS) JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC 1997 1997 1997 1997 1997 1997 1997 1997 1997 1997 1997 1997 ENDING SHORT-TERM DEBT (a) 6,112 (1,867) 21,896 15,063 8,118 48,050 40,124 30,682 46,044 38,142 29,778 (41,091) CONTINGENCIES: (b) 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 ------- ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ 16,112 8,133 31,896 25,063 18,118 58,050 50,124 40,682 56,044 48,142 39,778 (31,091)
JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC 1998 1998 1998 1998 1998 1998 1998 1998 1998 1998 1998 1998 ENDING SHORT-TERM DEBT (a) (60,144) (68,034) 6,782 (3,741)(10,360) 42,837 35,693 26,777 25,400 19,428 13,818 25,731 CONTINGENCIES: (b) 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 -------- ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------- (50,144) (58,034) 16,782 6,259 (360) 52,837 45,693 36,777 35,400 29,428 23,818 35,731
(a) Short-term debt levels based on the Company's Receipt and Disbursements Forecast (attached). (b) Contingency based on an estimate of average monthly variances of cash balances forecast to be approximately $10 million. Wednesday, February 12, 1997 NORTH ATLANTIC ENERGY COMPANY RECEIPTS AND DISBURSEMENTS 1997 FORECAST - PSNH CUSTOMER FIRST Jan Feb Mar Apr May Jun Jul Aug Sep 1997 1997 1997 1997 1997 1997 1997 1997 1997 PLANNED FINANCINGS FIRST MORTGAGE BONDS OTHER LONG-TERM DEBT PREFERRED STOCK COMMON STOCK ISSUE CAPITAL CONTR TO SUBS CASH RETIREMENTS-LTD (20000) CASH RETIREMENTS-COMMON STK CASH RETIREMENTS-PFD STK CASH RETIREMENTS-PRIOR SPENT F FINANCING EXPENSE ------ ------ ------ ------ ------ ------ ------ ------ ------ NET PLANNED FINANCING (20000) CASH BEFORE AUTOMATIC FINANCINGS (3612) 7979 (21896) 6833 7444 (39432) 7926 9942 (14861) AUTOMATIC FINANCINGS SHORT-TERM DEBT BORROWED 3612 21896 39432 14861 SHORT-TERM DEBT REPAID (6112) (6333) (6944) (7426) (9442) ------ ------ ------ ------ ------ ------ ------ ------ ------ NET AUTOMATIC FINANCINGS 3612 (6112) 21896 (6333) (6944) 39432 (7426) (9442) 14861 ENDING CASH BALANCE ( ) 1867 0 500 500 ( ) 500 500 ENDING BALANCES: --------------- CASH 500 500 500 500 500 TEMP CASH INVESTMENTS 1367 ------ ------ ------ ------ ------ ------ ------ ------ ------ TOTAL CASH BALANCE 1867 500 500 500 500 SHORT TERM DEBT 6112 21896 15563 8618 48050 40624 31182 46044 ------ ------ ------ ------ ------ ------ ------ ------ ------ NET CASH + TCI - STD (6112) 1867 (21896) (15063) (8118) (48050) (40124) (30682) (46044)
Wednesday, February 12, 1997 NORTH ATLANTIC ENERGY COMPANY RECEIPTS AND DISBURSEMENTS 1997 FORECAST - PSNH CUSTOMER FIRST Oct Nov Dec Year 1997 1997 1997 1997 FIRST MORTGAGE BONDS OTHER LONG-TERM DEBT PREFERRED STOCK COMMON STOCK ISSUE CAPITAL CONTR TO SUBS CASH RETIREMENTS-LTD (190000) (210000) CASH RETIREMENTS-COMMON STK CASH RETIREMENTS-PFD STK CASH RETIREMENTS-PRIOR SPENT F FINANCING EXPENSE (9500) (9500) ------ ------ ------ ------ NET PLANNED FINANCING (199500) (219500) CASH BEFORE AUTOMATIC FINANCINGS 7902 8864 71369 43591 SHORT-TERM DEBT BORROWED 79801 SHORT-TERM DEBT REPAID (7402) (8364) (30278) (82301) ------ ------ ------ ------ NET AUTOMATIC FINANCINGS (7402) (8364) (30278) (2500) ENDING CASH BALANCE 500 500 41091 41091 ENDING BALANCES: --------------- CASH 500 500 500 500 TEMP CASH INVESTMENTS 40591 40591 ------ ------ ------ ------ TOTAL CASH BALANCE 500 500 41091 41091 SHORT TERM DEBT 38642 30278 ------ ------ ------ ------ NET CASH + TCI - STD (38142) (29778) 41091 41091
Wednesday, February 12, 1997 NORTH ATLANTIC ENERGY COMPANY RECEIPTS AND DISBURSEMENTS 1997 FORECAST - PSNH CUSTOMER FIRST Jan Feb Mar Apr May Jun Jul Aug Sep 1997 1997 1997 1997 1997 1997 1997 1997 1997 BEGINNING CASH BALANCE 1038 1867 500 500 500 500 CASH RECEIPTS CASH RECEIPTS: RESIDENTIAL COMMERCIAL INDUSTRIAL OTHER RETAIL WHOLESALE ADDITIONAL REQUIRED OTHER REVENUE INTEREST INCOME 0 6 DIVIDENDS RECEIVED OTHER RECEIPTS PAYMENTS FROM ASSOC. COS 14196 13661 13491 13608 13617 14194 15797 15611 15557 RESERVES FROM SWAP ------ ------ ------ ------ ------ ------ ------ ------ ------ TOTAL RECEIPTS 14196 13661 13497 13608 13617 14194 15797 15611 15557 CASH DISBURSEMENTS CASH DISBURSEMENTS: FOSSIL FUEL NUCLEAR FUEL 14152 293 321 2228 321 790 (14) 229 312 PURCHASED POWER INTERCOMPANY BILLINGS - NUGT INTERCOMPANY BILLINGS - NAECO INTERCOMPANY BILLINGS - IRREG OTHER TAXES 136 126 125 1479 211 5637 133 114 98 FEDERAL INCOME TAX 4037 (2086) 2086 STATE INCOME TAX 161 O&M LABOR 1278 1042 1105 1258 1919 2092 1427 1087 1072 O&M NON-LABOR 2344 2981 2431 2579 2935 4479 4880 3330 2536 INTEREST ON SHORT-TERM DEBT 12 30 107 76 42 235 199 153 INTEREST ON LONG-TERM DEBT 2871 17791 3536 PREFERRED DIVIDEND COMMON DIVIDEND 25000 22000 MISC DISBURSEMENTS 56 56 56 56 56 56 57 57 57 NUCLEAR DECOMMISSIONING 375 375 375 375 375 375 375 375 375 MMWEC SETTLEMENT SPP SETTLEMENT COST OF REMOVAL ------ ------ ------ ------ ------ ------ ------ ------ ------ TOTAL OPERATING DIBURSEMENTS 18357 4907 36486 6001 5899 33352 7097 5395 30144 CASH GENERATION BEFORE CONST (4161) 8754 (22989) 7607 7718 (19158) 8700 10216 (14587) CONST EXP - LABOR 72 72 72 72 72 72 72 72 72 CONST EXP - NON-LABOR 418 703 703 703 703 703 703 703 703 INV NOT INCLUDED IN CONSTR ------ ------ ------ ------ ------ ------ ------ ------ ------ TOTAL CONSTR EXPENDITURES 490 774 774 774 774 774 774 774 774 INTERNAL CASH BEFORE FINANCINGS (3612) 7979 (21896) 6833 7444 (19432) 7926 9942 (14861)
Wednesday, February 12, 1997 NORTH ATLANTIC ENERGY COMPANY RECEIPTS AND DISBURSEMENTS 1997 FORECAST - PSNH CUSTOMER FIRST Oct Nov Dec Year 1997 1997 1997 1997 BEGINNING CASH BALANCE 500 500 1038 CASH RECEIPTS: RESIDENTIAL COMMERCIAL INDUSTRIAL OTHER RETAIL WHOLESALE ADDITIONAL REQUIRED 321896 321896 OTHER REVENUE INTEREST INCOME 6 DIVIDENDS RECEIVED OTHER RECEIPTS PAYMENTS FROM ASSOC. COS 13732 13769 13733 170966 RESERVES FROM SWAP ------ ------ ------ ------ TOTAL RECEIPTS 13732 13769 335629 492868 CASH DISBURSEMENTS: FOSSIL FUEL NUCLEAR FUEL 724 312 321 19989 PURCHASED POWER INTERCOMPANY BILLINGS - NUGT INTERCOMPANY BILLINGS - NAECO INTERCOMPANY BILLINGS - IRREG OTHER TAXES 85 84 4668 12896 FEDERAL INCOME TAX 4037 STATE INCOME TAX 161 O&M LABOR 1083 1082 1219 15664 O&M NON-LABOR 2502 2527 2524 36049 INTEREST ON SHORT-TERM DEBT 225 189 148 1416 INTEREST ON LONG-TERM DEBT 16885 41083 PREFERRED DIVIDEND COMMON DIVIDEND 5000 52000 MISC DISBURSEMENTS 57 57 33341 33962 NUCLEAR DECOMMISSIONING 375 375 375 4500 MMWEC SETTLEMENT SPP SETTLEMENT COST OF REMOVAL ------ ------ ------ ------ TOTAL OPERATING DIBURSEMENTS 5056 4631 64486 221809 CASH GENERATION BEFORE CONST 8676 9138 271143 271059 CONST EXP - LABOR 72 72 72 859 CONST EXP - NON-LABOR 703 703 703 8146 INV NOT INCLUDED IN CONSTR ------ ------ ------ ------ TOTAL CONSTR EXPENDITURES 774 774 774 9006 INTERNAL CASH BEFORE FINANCINGS 7902 8864 270869 263091
Wednesday, February 12, 1997 NORTH ATLANTIC ENERGY COMPANY RECEIPTS AND DISBURSEMENTS 1997 FORECAST - PSNH CUSTOMER FIRST Jan Feb Mar Apr May Jun Jul Aug Sep 1998 1998 1998 1998 1998 1998 1998 1998 1998 PLANNED FINANCINGS FIRST MORTGAGE BONDS OTHER LONG-TERM DEBT PREFERRED STOCK COMMON STOCK ISSUE CAPITAL CONTR TO SUBS CASH RETIREMENTS-LTD (40000) CASH RETIREMENTS-COMMON STK CASH RETIREMENTS-PFD STK CASH RETIREMENTS-PRIOR SPENT F FINANCING EXPENSE ------ ------ ------ ------ ------ ------ ------ ------ ------ NET PLANNED FINANCING (40000) CASH BEFORE AUTOMATIC FINANCINGS 60144 68034 (6782) 10523 10360 (42837) 7144 9416 1877 AUTOMATIC FINANCINGS SHORT-TERM DEBT BORROWED 6782 42837 SHORT-TERM DEBT REPAID (6782) (6644) (8916) (1377) ------ ------ ------ ------ ------ ------ ------ ------ ------ NET AUTOMATIC FINANCINGS 6782 (6782) 42837 (6644) (8916) (1377) ENDING CASH BALANCE 60144 68034 0 3741 10360 () 500 500 500 ENDING BALANCES: --------------- CASH 500 500 () 500 500 500 500 500 TEMP CASH INVESTMENTS 59644 67534 3241 9860 ------ ------ ------ ------ ------ ------ ------ ------ ------ TOTAL CASH BALANCE 60144 68034 () 3741 10360 500 500 500 SHORT TERM DEBT 6782 42837 36193 27277 25900 ------ ------ ------ ------ ------ ------ ------ ------ ------ NET CASH + TCI - STD 60144 68034 (6782) 3741 10360 (42837) (35693) (26777) (25400)
Wednesday, February 12, 1997 NORTH ATLANTIC ENERGY COMPANY RECEIPTS AND DISBURSEMENTS 1997 FORECAST - PSNH CUSTOMER FIRST Oct Nov Dec Year 1998 1998 1998 1998 FIRST MORTGAGE BONDS OTHER LONG-TERM DEBT PREFERRED STOCK COMMON STOCK ISSUE CAPITAL CONTR TO SUBS CASH RETIREMENTS-LTD (40000) CASH RETIREMENTS-COMMON STK CASH RETIREMENTS-PFD STK CASH RETIREMENTS-PRIOR SPENT F FINANCING EXPENSE ------ ------ ------ ------ NET PLANNED FINANCING (40000) CASH BEFORE AUTOMATIC FINANCINGS 6472 6111 (11413) (25371) SHORT-TERM DEBT BORROWED 11413 61033 SHORT-TERM DEBT REPAID (5972) (5611) (35302) ------ ------ ------ ------ NET AUTOMATIC FINANCINGS (5972) (5611) 11413 25371 ENDING CASH BALANCE 500 500 () 0 ENDING BALANCES: --------------- CASH 500 500 TEMP CASH INVESTMENTS ------ ------ ------ ------ TOTAL CASH BALANCE 500 500 SHORT TERM DEBT 19928 14318 25731 25731 ------ ------ ------ ------ NET CASH + TCI - STD (19428) (13818) (25731) (25731)
Wedneday February 12, 1997 NORTH ATLANTIC ENERGY COMPANY RECEIPTS AND DISBURSEMENTS 1997 FORECAST - PSNH CUSTOMER FIRST Jan Feb Mar Apr May Jun Jul Aug Sep 1998 1998 1998 1998 1998 1998 1998 1998 1998 BEGINNING CASH BALANCE 41091 60144 68034 () 3741 10360 500 500 CASH RECEIPTS CASH RECEIPTS: RESIDENTIAL COMMERCIAL INDUSTRIAL OTHER RETAIL WHOLESALE ADDITIONAL REQUIRED (387) (382) (386) (386) (402) (448) (442) (441) OTHER REVENUE INTEREST INCOME 180 265 300 14 44 DIVIDENDS RECEIVED OTHER RECEIPTS PAYMENTS FROM ASSOC. COS 24512 13661 13491 13608 13617 14914 15797 15611 15557 RESERVES FROM SWAP ------ ------ ------ ------ ------ ------ ------ ------ ------ TOTAL RECEIPTS 24692 13539 13409 13222 13246 13836 15349 15169 15116 CASH DISBURSEMENTS CASH DISBURSEMENTS: FOSSIL FUEL NUCLEAR FUEL 266 292 320 257 320 311 266 320 311 PURCHASED POWER INTERCOMPANY BILLINGS - NUGT INTERCOMPANY BILLINGS - NAECO INTERCOMPANY BILLINGS - IRREG OTHER TAXES 121 108 108 1465 198 5911 120 99 85 FEDERAL INCOME TAX 63458 (4112) (5356) (5148) STATE INCOME TAX 6057 O&M LABOR 1137 893 959 1116 1800 1977 1291 940 925 O&M NON-LABOR 2844 2653 2084 2237 2605 4199 4614 3013 2192 INTEREST ON SHORT-TERM DEBT 33 211 178 134 INTEREST ON LONG-TERM DEBT 3536 8288 3536 PREFERRED DIVIDEND COMMON DIVIDEND 10000 10000 10000 MISC DISBURSEMENTS 57 58 58 58 58 58 58 59 59 NUCLEAR DECOMMISSIONING 390 390 390 390 390 390 390 390 390 MMWEC SETTLEMENT SPP SETTLEMENT COST OF REMOVAL ------ ------ ------ ------ ------ ------ ------ ------ ------ TOTAL OPERATING DIBURSEMENTS 4820 4398 86975 1449 5375 25783 6954 5002 12489 CASH GENERATION BEFORE CONST 19872 9141 (73566) 11773 7870 (11947) 8395 10167 2627 CONST EXP - LABOR 116 116 116 116 116 116 116 116 116 CONST EXP - NON-LABOR 703 1135 1135 1135 1135 1135 1135 1135 1135 INV NOT INCLUDED IN CONSTR ------ ------ ------ ------ ------ ------ ------ ------ ------ TOTAL CONSTR EXPENDITURES 819 1251 1251 1251 1251 1251 1251 1251 1251 INTERNAL CASH BEFORE FINANCINGS 60144 68034 (6782) 10523 10360 (2837) 7144 9416 1877
NORTH ATLANTIC ENERGY COMPANY RECEIPTS AND DISBURSEMENTS 1997 FORECAST - PSNH CUSTOMER FIRST Oct Nov Dec Year 1998 1998 1998 1998 BEGINNING CASH BALANCE 500 500 500 41091 CASH RECEIPTS: RESIDENTIAL COMMERCIAL INDUSTRIAL OTHER RETAIL WHOLESALE ADDITIONAL REQUIRED (389) (390) (389) (4442) OTHER REVENUE INTEREST INCOME 803 DIVIDENDS RECEIVED OTHER RECEIPTS PAYMENTS FROM ASSOC. COS 13732 13769 13733 181282 RESERVES FROM SWAP ------ ------ ------ ------ TOTAL RECEIPTS 13343 13379 13344 177643 CASH DISBURSEMENTS: FOSSIL FUEL NUCLEAR FUEL 2373 2776 1616 9428 PURCHASED POWER INTERCOMPANY BILLINGS - NUGT INTERCOMPANY BILLINGS - NAECO INTERCOMPANY BILLINGS - IRREG OTHER TAXES 73 73 4703 13605 FEDERAL INCOME TAX (2571) 46272 STATE INCOME TAX 6057 O&M LABOR 935 934 1076 13984 O&M NON-LABOR 2158 2183 2180 32962 INTEREST ON SHORT-TERM DEBT 127 98 70 852 INTEREST ON LONG-TERM DEBT 6478 21838 PREFERRED DIVIDEND COMMON DIVIDEND 10000 40000 MISC DISBURSEMENTS 59 59 59 700 NUCLEAR DECOMMISSIONING 390 390 390 4680 MMWEC SETTLEMENT SPP SETTLEMENT COST OF REMOVAL ------ ------ ------ ------ TOTAL OPERATING DIBURSEMENTS 6120 6517 24006 189889 CASH GENERATION BEFORE CONST 7223 6861 (10662) (12246) CONST EXP - LABOR 116 116 116 1388 CONST EXP - NON-LABOR 1135 1135 1135 13188 INV NOT INCLUDED IN CONSTR ------ ------ ------ ------ TOTAL CONSTR EXPENDITURES 1251 1251 1251 14576 INTERNAL CASH BEFORE FINANCINGS 6472 6111 (11413) 14269
EX-99 7 EXHIBIT I.2 PROPOSED FORM OF NOTICE (Release No. 35- ______; 70-_______ ) PROPOSED AMENDMENTS TO REVOLVING CREDIT FACILITY FOR NORTHEAST UTILITIES ("NU), THE CONNECTICUT LIGHT AND POWER COMPANY ("CL&P") AND WESTERN MASSACHUSETTS ELECTRIC COMPANY ("WMECO") AND INCREASE IN SHORT-TERM BORROWING LIMIT OF NORTH ATLANTIC ENERGY CORPORATION ("NAEC") AND MODIFICATION OF NAEC'S PARTICIPATION IN THE NORTHEAST UTILITIES SYSTEM MONEY POOL UNDER THE PUBLIC UTILITY HOLDING COMPANY ACT OF 1935 ___________________________, 1997 Northeast Utilities ("NU"), a public utility holding company registered under the Public Utility Holding Company Act of 1935, as amended (the "Act"), and The Connecticut Light and Power Company ("CL&P"), Western Massachusetts Electric Company ("WMECO"), Public Service Company of New Hampshire ("PSNH"), Holyoke Water Power Company ("HWP") and North Atlantic Energy Corporation ("NAEC"), each of which is a wholly-owned subsidiary of NU (the "Applicants"), have filed with the Commission a post-effective amendment (the "Amendment") to their application/declaration in File No. 70-8875 pursuant to Section 6(a), 7, 9(a), 10 and 12 of the Act and Rules 43, 45 and Rule 52 thereunder. NU and WMECO are located at 174 Brush Hill Avenue, West Springfield, Massachusetts 01090-0010, CL&P is located at 107 Selden Street, Berlin, Connecticut 06037, PSNH and NAEC are located at 1000 Elm Street, Manchester, New Hampshire 03105 and HWP is located at Canal Street, Holyoke, Massachusetts 01040. Authorization is requested for NU, CL&P and WMECO to enter into amendments to its revolving credit facility (the "Facility") with certain lending institutions which will provide, among other things, that (a) CL&P and WMECO collateralize their obligations under the Facility with first mortgage bonds; (b) NU's borrowing limit thereunder be reduced to zero subject to reinstatement to up to $50 million at such time as NU, CL&P and WMECO meet certain financial tests; (c) the borrowing limit thereunder of CL&P and WMECO not exceed at any time the aggregate principal amount of collateral first mortgage bonds issued by it as security for its respective obligations under the Facility; (d) on the closing date of the amendment, the Borrowers pay each Lender an amendment fee equal to .25% of its commitment under the Facility; and (e) the amendments become effective no later than May 30, 1997. Authorization is also requested by the Applicants to increase the short-term borrowing limit of NAEC from $50 million to $60 million and to amend the Northeast Utilities System Money Pool (the "Money Pool") to enable NAEC to borrow from all of the NU system companies participating in the Money Pool instead of NU alone as is now the case. The Applicants state that they intend to request the Commission's approval, pursuant to the Amendment, of all transactions described therein, whether under the sections of the Act and the rules thereunder enumerated therein or otherwise. The Amendment and any further amendments thereto are available for public inspection through the Commission's Office of Public Reference. Any interested persons wishing to comment or request a hearing on the Amendment should submit their views in writing by _______________________________, 1997, to the Secretary, Securities and Exchange Commission, Washington, D.C. 20549, and serve a copy on the Applicants at the addresses specified above. Proof of service (by affidavit or, in the case of an attorney at law, by certificate) should be filed with the request. Any request for hearing shall identify specifically the issues of fact or law that are disputed. A person who so requests will be notified of any hearing, if ordered, and will receive a copy of any notice or order issued in this matter. After said date, the Amendment as filed or as it may be further amended, may be permitted to become effective. For the Commission, by the Division of Investment Management, pursuant to delegated authority. _________________________ Secretary -----END PRIVACY-ENHANCED MESSAGE-----