-----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, U7iWn4kil/gfD7IA4J2A+2wal1C/HsXDibkXkWDARyKE780J9apzL43D5CT9ZiLt k8EhU45ScR3451tqj0fVKA== 0000092122-95-000104.txt : 19951101 0000092122-95-000104.hdr.sgml : 19951101 ACCESSION NUMBER: 0000092122-95-000104 CONFORMED SUBMISSION TYPE: U-1 PUBLIC DOCUMENT COUNT: 2 FILED AS OF DATE: 19951031 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: SOUTHERN CO CENTRAL INDEX KEY: 0000092122 STANDARD INDUSTRIAL CLASSIFICATION: ELECTRIC SERVICES [4911] IRS NUMBER: 580690070 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: U-1 SEC ACT: 1935 Act SEC FILE NUMBER: 070-08733 FILM NUMBER: 95585881 BUSINESS ADDRESS: STREET 1: 64 PERIMETER CTR EAST CITY: ATLANTA STATE: GA ZIP: 30346 BUSINESS PHONE: 4043930650 U-1 1 FORM U-1 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 APPLICATION OR DECLARATION on FORM U-1 under The Public Utility Holding Company Act of 1935 THE SOUTHERN COMPANY MOBILE ENERGY SERVICES HOLDINGS, INC. 64 Perimeter Center East 900 Ashwood Parkway - Suite 450 Atlanta, Georgia 30346 Atlanta, Georgia 30338 SOUTHERN ELECTRIC INTERNATIONAL, INC. 900 Ashwood Parkway - Suite 500 Atlanta, Georgia 30338 (Name of company or companies filing this statement and addresses of principal executive offices) THE SOUTHERN COMPANY (Name of top registered holding company parent of each applicant or declarant) Tommy Chisholm, Secretary Thomas G. Boren, President The Southern Company Southern Electric International, 64 Perimeter Center East Inc. Atlanta, Georgia 30346 900 Ashwood Parkway - Suite 500 Atlanta, Georgia 30338 (Names and addresses of agents for service) The Commission is requested to mail signed copies of all orders, notices and communications to: W.L. Westbrook Thomas G. Boren, President Financial Vice-President Southern Electric International, The Southern Company Inc. 64 Perimeter Center East 900 Ashwood Parkway - Suite 500 Atlanta, Georgia 30346 Atlanta, Georgia 30338 John D. McLanahan, Esq. Troutman Sanders LLP 600 Peachtree Street, N.E. Suite 5200 Atlanta, Georgia 30308-2216 Item 1. Description of Proposed Transactions. 1.1 Background. The Southern Company ("Southern") is a registered holding company under the Public Utility Holding Company Act of 1935, as amended (the "Act"). Since 1987, its wholly-owned subsidiary, Southern Electric International, Inc. ("Southern Electric"), has engaged in the business of developing and rendering administrative, operational, construction and other services to independent power projects and foreign utility systems, including "qualifying facilities" ("QFs"), as defined under the Public Utility Regulatory Policies Act of 1978, as amended ("PURPA"), "exempt wholesale generators" ("EWGs") and "foreign utility companies" ("FUCOs"), as defined under Sections 32 and 33 of the Act, respectively, and other power projects which constitute a part of Southern's integrated electric utility system (collectively, "Projects").1 Southern directly, or indirectly through one or more intermediate subsidiaries, including subsidiaries referred to as "Project Parents,"2 now holds investments in domestic EWGs in Virginia and Hawaii, and in foreign EWGs and FUCOs in England, Argentina, Chile, Trinidad and Tobago and The Bahamas. Southern also owns, indirectly, all of the equity interests in a non- exempt Project in Alabama. At September 30, 1995, Southern's committed equity investment in all such Projects, including amounts represented by contingent equity funding arrangements, 1 See File No. 70-7932, Holding Co. Act Rel. No. 26212, dated December 30, 1994 (the "December 1994 Order"). 2 See File No. 70-8421, Holding Co. Act Rel. Nos. 26096 and 26338, dated August 3, 1994 and July 25, 1995, respectively. reimbursement arrangements, guaranties and the like, was approximately $1.360 billion, of which approximately $1.244 billion represents Southern's "aggregate investment" (as defined in Rule 53(a)) in EWGs and FUCOs.3 Appended as Exhibit H-1 hereto is an organizational chart showing at September 30, 1995 Southern's ownership interests in Southern Electric and in all Projects and Project Parents. Southern has initiated steps to consolidate its direct and indirect ownership interests in all EWGs and FUCOs (collectively, "Exempt Projects") and Project Parents under SEI Holdings, Inc. (hereinafter referred to as "Holdings"). Holdings, a Delaware corporation, was organized in 1993 to facilitate Southern's acquisition and ownership of an interest in Hidroelectrica Alicura S.A., a FUCO which owns and operates a generating station in Argentina. 1.2 Purpose of Proposed Reorganization. The primary objective for the reorganization of Southern's ownership interests in Projects is to facilitate Holdings' access to external sources of debt and equity capital. Other benefits will include simplifying the capital structure of Southern's project portfolio by eliminating unnecessary subsidiaries, making the overall project ownership structure more tax efficient, and 3 The stated "aggregate investment" assumes consummation of Southern's indirect purchase of 100% of the common shares of South Western Electricity plc, a FUCO which serves parts of southwestern England. 2 reducing administrative costs, such as the costs of accounting, book keeping, and tax-return preparation. Specifically, Southern envisions that Holdings or subsidiaries of Holdings may from time to time issue equity and/or debt securities to third persons, i.e., investors and lenders other than Southern. This would enable Holdings to finance at least a portion of its future investments in Projects with equity and debt provided by others, thereby reducing the financing pressures on Southern itself. In this connection, Holdings intends to segregate its domestic and foreign Project interests in order to facilitate the attraction of investors who have elected to target a specific market segment (e.g., European or South American projects). Further, some potential investors (e.g., insurance companies) may be subject to legal restrictions on permitted investments in non-U.S. entities or projects. 1.3 Description of Interim Reorganization. In the initial steps of this restructuring (herein referred to as the "Interim Reorganization"), Southern has or will transfer to Holdings all of the outstanding stock of Southern Electric Wholesale Generators, Inc. ("SEWG"), an EWG that directly and indirectly holds Southern's ownership interests in other domestic EWGs;4 and all of the outstanding stock of SEI Europe, Inc., a Project 4 Southern Electric Wholesale Generators, Inc., a Delaware corporation, directly and indirectly through other EWGs holds Southern's investments in "eligible facilities" in Virginia and Hawaii and in Southern Energy Marketing, Inc., a power marketer that has been designated as an EWG by the Federal Energy Regulatory Commission. 3 Parent which holds Southern's interest in a FUCO in England. With certain exceptions, Southern will then transfer to SEI Europe, Inc. its interests in other existing FUCOs, foreign EWGs, and Project Parents.5 Upon its acquisition of Southern's interests in other Exempt Projects and Project Parents, Holdings will itself be a Project Parent within the meaning given in File No. 70-8421. The various steps in the Interim Reorganization, as described above, only involve adjustments in Southern's ownership of Exempt Projects (i.e., EWGs and FUCOs) and Project Parents. These steps have been and will be carried out in reliance upon the exemptions provided under Sections 32 and 33 and/or in accordance with Southern's current authorization in File No. 70- 8421. Southern's "aggregate investment," as defined in Rule 53(a), in all Exempt Projects and Project Parents will be unchanged by the Interim Reorganization. Appended as Exhibit H-2 hereto is an organizational chart showing Southern's anticipated direct and indirect ownership of Southern Electric and of Exempt Projects and Project Parents currently owned following the Interim Reorganization. Not all steps in the Interim Reorganization have been carried out, and the organizational structure depicted may be subject to some modification. 5 SEI Europe, Inc. may, in turn, create additional Project Parents to own Southern's foreign Projects. 4 In the future, to the extent possible, Southern intends to structure investments in any additional foreign Projects as direct or indirect subsidiaries of SEI Europe, Inc. (hereafter referred to as "International Holdings"), and investments in any additional domestic Projects as direct or indirect subsidiaries of SEWG (hereafter referred to as "Domestic Holdings"). 1.4 Description of Final Reorganization. Subject to receipt of an order approving the Application or Declaration in this proceeding, Southern proposes to take several additional steps designed to consolidate its ownership of all current Projects, Project Parents and activities and functions related thereto under Holdings. Specifically, Southern requests approval to contribute the common stock of Southern Electric to Holdings such that Southern Electric will be a first-tier subsidiary of Holdings (along with Domestic Holdings and International Holdings). Southern Electric will continue to engage in those activities authorized under the December 1994 Order (viz. preliminary project development activities and the sale of operating, construction, project management, administrative and other similar services to associate Projects and to non- associates, including non-associate utilities and independent power projects). In connection with the foregoing, Southern Electric also requests authority to transfer to International Holdings (or to subsidiaries thereof) the securities of two existing wholly-owned subsidiaries of Southern Electric whose operations are limited to 5 the conduct of preliminary project development activities in foreign countries.6 Currently, Southern's sole non-exempt Project is Mobile Energy Services Company, L.L.C. ("MESC"), which Southern holds through a wholly-owned subsidiary, Mobile Energy Services Holdings, Inc. ("Mobile Energy").7 Southern will continue to hold all of the issued and outstanding common stock of Mobile Energy as a first-tier subsidiary company. However, Southern desires to direct some or all of the distributable cash flow and income from Mobile Energy to support the operations of and future financing by Holdings and/or Domestic Holdings. To achieve this objective, Southern and Mobile Energy request approval for a recapitalization of Mobile Energy under Alabama law pursuant to which Southern would receive, as a distribution in respect of the currently issued and outstanding common stock of Mobile Energy,8 all of the authorized shares of a new class of non-voting 6 These subsidiaries, which were organized in accordance with Southern Electric's authorization under the December 1994 Order, are Southern Electric International-Asia, Inc., which maintains Southern Electric's Hong Kong office, and Southern Electric International GmbH, which maintains Southern Electric's Vienna office. 7 See File No. 70-8505, Holding Co. Act Rel. Nos. 26185 and 26330, dated December 13, 1994 and July 13, 1995, respectively. Through Mobile Energy, a statutory "holding company," Southern holds 99% of the equity ownership interests in MESC, an Alabama limited liability company. MESC owns a dedicated, inside-the- fence, industrial cogeneration complex in Mobile, Alabama. The remaining 1% equity ownership interest in MESC is, and will continue to be, held by Southern Electric. 8 Mobile Energy has authorized and issued 1000 shares of common stock, par value $1.00 per share. It currently has no other authorized class of stock. 6 preferred stock. The recapitalization of Mobile Energy would not require Southern to make, or result in, any additional investment by Southern in Mobile Energy. A copy of Mobile Energy's Amended and Restated Articles of Incorporation designating the new class of preferred stock is filed herewith as Exhibit A. The preferred stock of Mobile Energy will not be entitled to any vote on any matter except for (i) such matters as require a vote of preferred stockholders under Alabama law, and (ii) any subsequent amendments to the articles of incorporation of Mobile Energy that would affect the priorities of the holders of such shares to dividends and to distributions upon liquidation of Mobile Energy. Concurrently with its receipt of Mobile Energy's preferred stock, Southern requests approval to transfer such stock to Holdings as a contribution to the capital of Holdings; and Holdings, in turn, proposes to transfer such preferred stock to Domestic Holdings as a contribution to the capital of that company. Except as described above, the shares of common and preferred stock of Mobile Energy will not be issued or sold to any third person without receipt of a further order of this Commission. 1.5 Authorization of Future Project Activities and Investments. In the future, Southern contemplates that it will make investments in additional Projects through Holdings (or subsidiaries of Holdings) and that Holdings and its subsidiaries (principally Southern Electric) will conduct all other related 7 project activities, including but not limited to project marketing and development, asset administration, and rendering of operations and maintenance, construction and other similar types of services to both associate Projects and to non-associates. Any investment in an Exempt Project (i.e., an EWG or FUCO) would be made in accordance with and subject to such limitations as may be imposed under Section 32 or 33, as the case may be, and all applicable rules of the Commission, including Rule 53. (a) Acquisition of Certain "Energy-Related" Companies. Holdings requests authority herein to acquire, directly or indirectly through subsidiaries, in one or more transactions from time to time through December 31, 2001, the securities of or other interests in any one or more companies that derive or will derive substantially all of their revenues from the ownership and/or operation of any one or more of the following categories of energy-related facilities or businesses (hereafter referred to as "Energy-Related Companies"): (i) QFs, including ownership or operation of any facilities that are necessary or incidental thereto, such as fuel production, transportation and handling facilities and equipment, and thermal energy utilization facilities purchased or constructed primarily to enable the QF to satisfy the useful thermal energy output requirements under PURPA; (ii) the production, conversion, and distribution of thermal energy products, such as steam, heat, hot and chilled water, air conditioning, compressed air and similar products; and (iii) the brokering and marketing of energy commodities, 8 including but not limited to fuel, electricity and natural or manufactured gas. Holdings may also acquire interests in other categories of "energy-related" businesses to the extent that any such acquisition may be exempted under a rule of general applicability hereafter adopted by the Commission.9 (b) Investments by Southern in Holdings. Southern proposes to make additional investments in Holdings from time to time in order to finance the business of Holdings and its subsidiaries, including direct or indirect investments by Holdings in Southern Electric and in one or more Projects or Energy-Related Companies. Such additional investments in Holdings shall be made in accordance with Rules 52 and 45(b)(4), as applicable, provided that: (i) any investment in Holdings made for the purpose of enabling Holdings to acquire directly or indirectly the securities of or other interest in any Exempt Project shall be subject to the limitations of Rule 53 and any other applicable rules; and (ii) any additional investment in Holdings made for the purpose of enabling Holdings to acquire directly or indirectly the securities of or other interest in any Energy- Related Company shall not exceed $300 million at any time outstanding or such greater amount as may be permitted under any 9 Reference is made to the Commission's proposed Rule 58, which, if adopted, would conditionally exempt from the pre- approval requirements of Sections 9(a) and 10 of the Act acquisitions of the securities of certain categories of "energy- related companies." See Holding Co. Act Release No. 26313, dated June 20, 1995. 9 rule of general applicability that the Commission may hereafter adopt. Holdings will use the proceeds of any additional financing by Southern (including the proceeds of borrowings from lenders other than Southern that are guaranteed by Southern, as described below), together with other internally generated funds and the proceeds of the sale of any securities issued to investors other than Southern or any associate company, to make investments in Projects and Energy-Related Companies, to make additional investments in Southern Electric, and to finance the costs of any other authorized or permitted activity. Holdings further proposes to assume liability (as guarantor, co-maker, indemnitor, or otherwise) with respect to any security issued by any direct or indirect subsidiary of Holdings, provided that the issue and sale of such security is exempt from the declaration requirements of Section 6(a) of the Act. (c) Acquisition by Holdings of Intermediate Subsidiaries. Holdings further requests authority to make investments in Projects and Energy-Related Companies directly or indirectly through one or more subsidiaries (hereinafter referred to as "Intermediate Subsidiaries") that are organized exclusively for that purpose; provided, however, that such subsidiaries may also provide project development and management services to Projects or Energy-Related Companies held by them. Any direct or indirect investment by Holdings in an Intermediate Subsidiary organized to acquire or hold an Exempt Project will be treated for purposes of 10 Rule 53 as if it were an investment in such Exempt Project; and any direct or indirect investment in an Intermediate Subsidiary organized to acquire and hold the securities of any Energy- Related Company will be treated as if it were an investment in such Energy-Related Company. (d) Acquisition by Holdings of Certain Other Special Purpose Subsidiaries. Holdings also requests approval to acquire, directly or indirectly, the securities of or other interest in one or more subsidiaries ("Special Purpose Subsidiaries") organized exclusively for the purpose of engaging in any of the activities that Southern Electric is currently authorized to engage in under the terms of the December 1994 Order, including preliminary project development and marketing, project management and administration, and rendering services to both associate Projects and Energy-Related Companies and to non- associates. Southern envisions, for example, that Special Purpose Subsidiaries will be needed in order to establish and manage foreign project development offices, and to provide operations and maintenance, construction or asset management services, whether to an associate Project or Energy-Related Company or to a non-associate company. Creating separate subsidiaries for such purposes serves to isolate the risks of one activity from others, and may be necessary to satisfy the requirements of applicable foreign or U.S. laws. (e) Financial Guaranties by Southern. Southern requests authority to guaranty in one or more transactions from time to 11 time through December 31, 2001, the securities of Holdings or any direct or indirect subsidiary of Holdings in an aggregate principal amount at any one time outstanding not to exceed $1.2 billion (the "Financial Guaranties"). Financial Guaranties may take the form of direct guaranties of securities issued by Holdings or any subsidiary, stand-by equity funding guaranties, obligations under capital maintenance agreements or under reimbursement agreements in respect of bank letters of credit, or other similar financial instruments or undertakings. Any Financial Guaranty issued by Southern with respect to securities of any Intermediate Subsidiary organized to acquire and hold the securities of any Exempt Project will be treated for purposes of Rule 53 as if it were a guaranty of the securities of such Exempt Project; and any Financial Guaranty with respect to securities of an Intermediate Subsidiary organized to acquire and hold the securities of any Energy-Related Company shall be counted against the investment limitation in all such entities set forth above in Item 1.5(a). Any Financial Guaranty outstanding on December 31, 2001, shall remain outstanding until it expires in accordance with its terms. (f) Pledge of Securities of Holdings or Subsidiaries. Finally, in connection with any sale of debt securities by Holdings or any subsidiary of Holdings, it may be necessary for Southern, as the sole stockholder of Holdings, or Holdings, Domestic Holdings and Foreign Holdings, as the stockholder of any of their respective subsidiaries, to provide collateral security 12 to the purchaser of such debt securities by pledging the shares of Holdings (if Holdings is the issuer) or of any subsidiary of Holdings (if a subsidiary of Holdings is the issuer). Similarly, it may be necessary for Domestic Holdings to pledge the preferred shares of Mobile Energy to secure borrowings from third-party lenders. To the extent required, Southern, Holdings, Domestic Holdings and Foreign Holdings request approval to enter into stock pledge agreements as collateral security for any such securities issuances. 1.6 Relationship to other Authorizations. Upon issuance of the Commission's order approving this Application or Declaration, Southern will relinquish its authorization in File No. 70-8421 (concerning "Project Parents"), but without prejudice to any transaction that has been consummated in reliance upon the authority granted by the Commission in that proceeding. The term "Intermediate Subsidiary," as defined herein, is broader than, i.e., it subsumes, the term "Project Parent," as defined in File No. 70-8421. For the same reason, upon the effective date of the order approving this Application or Declaration, Southern will also relinquish its authority in File No. 70-8277 to guaranty the securities of Exempt Projects issued to third-parties. (All other approvals granted in File No. 70-8277 shall remain unaffected). Finally, Southern understands that the issuance and sale of securities by a non-utility subsidiary of a registered holding company (which would include Holdings, Domestic Holdings, Foreign 13 Holdings and any Intermediate Subsidiary) in order to finance the authorized business of such subsidiary is conditionally exempt from Sections 6(a) and 7 of the Act pursuant to Rule 52, as recently amended, and that cash capital contributions and open account advances to such subsidiaries are exempt from Section 12(b) and Rule 45(a) thereunder pursuant to Rule 45(b), also as recently amended.10 Southern requests that the Commission's order in this proceeding acknowledge the applicability of those exemptions. Southern Electric will continue to engage in those activities currently authorized under the December 1994 Order. However, any additional investment by Southern in Southern Electric would be made indirectly through Holdings, as described above. Any services rendered by any Special Purpose Subsidiary to a Project or other associate company will be subject to all of the terms, conditions and limitations of the December 1994 Order as if the terms, conditions and limitations of such order expressly applied to such Special Purpose Subsidiary. Under the terms of the December 1994 Order, Southern is authorized to guaranty performance by or act as indemnitor or surety with respect to contractual obligations of Southern Electric, any subsidiary of Southern Electric, or any Project entity in which Southern directly or indirectly holds an interests (collectively, "Performance Guaranties"). Southern requests a modification of the December 1994 Order so that it is 10 See Holding Co. Act Rel. No. 26311, dated June 20, 1995. 14 clear that Southern may provide Performance Guaranties on behalf of Holdings and any direct or indirect subsidiary of Holdings, including Southern Electric and any Project, Energy-Related Company, or Intermediate Subsidiary. Any such Performance Guaranty provided on behalf of an Intermediate Subsidiary that holds an interest in an Exempt Project shall, for purposes of Rule 53 and the December 1994 Order, be treated as if it is a Performance Guaranty provided on behalf of such Exempt Project. Holdings, Domestic Holdings and Foreign Holdings also propose to provide Performance Guaranties on behalf of any of their respective direct or indirect subsidiaries. It is proposed that such Performance Guaranties would count against the limitation on the amount of Performance Guaranties under the December 1994 Order only if, and to the extent that, the same are ultimately supported by an agreement or undertaking of Southern itself. 1.7 Other Matters. It is proposed that Southern and Holdings file a single consolidated quarterly report pursuant to Rule 24 on all investments in Projects and Energy-Related Companies and other activities of Holdings and its subsidiaries. Such report shall be in the same form as, and in lieu of, the combined report currently being filed in File Nos. 70-7932 and 70-8421. 15 Item 2. Fees, Commissions and Expenses. The fees, commissions and expenses paid or incurred and to be paid or incurred in connection with the proposals contained herein are estimated not to exceed $7,000, including the Commission's filing fee of $2,000. Item 3. Applicable Statutory Provisions. The applicants believe that the following proposed transactions are or may be subject to the requirements of the following provisions of the Act and rules thereunder: Transaction Applicable Section or Rule Transfer to Holdings by Sections 12(b) and (f); Rules Southern of the common 43, 45 and 54 stock of Southern Electric Amendment to the Articles Sections 6(a) and 7; Sections of Incorporation of Mobile 9(a)(1) and 10; Rule 54 Energy and issuance of shares of a new class of preferred stock of Mobile Energy to Southern; and the acquisition thereof by Southern Transfer to Holdings by Sections 12(b) and (f); Rules Southern of the shares of 43, 45 and 54 (Deemed to be existing Project Parents, authorized under orders issued and transfer to in File No. 70-8421) International Holdings of such shares by Holdings Transfer to Holdings by Sections 12(b) and (f); Rules Southern of the common 43, 45 and 54 (Deemed to be stock of SEWG authorized under orders issued in File No. 70-8421) 16 Transaction Applicable Section or Rule Transfer to Holdings by Sections 12(b) and (f) and Southern of the preferred Rules 43, 45 and 54 thereunder; stock of Mobile Energy, and Sections 9(a) and 10 transfer to Domestic Holdings of such shares by Holdings, and the acquisition thereof by Holdings and Domestic Holdings Transfer to International Sections 12(f) and Rule 43; Holdings or subsidiaries Sections 9(a)(1) and 10 thereof by Southern Electric of shares of project development subsidiaries, and the acquisition of such shares by the latter Acquisition by Holdings, Sections 9(a)(1) and 10 directly or indirectly, of securities of Energy- Related Companies Acquisition by Holdings, Sections 9(a)(1) and 10 directly or indirectly, of securities of Intermediate Subsidiaries and of Special Purpose Subsidiaries Issuance of the Financial Sections 6(a), 7, 12(b), 32 and Guaranties by Southern 33 and Rules 45(a), 53 and 54 thereunder Pledge by Southern of stock May be subject to Sections 6(a) of Holdings and by Holdings and 7 of stock of its direct and indirect subsidiaries Item 4. Regulatory Approval. The proposed transactions are not subject to the jurisdiction of any state commission or of any federal commission other than the Commission. 17 Item 5. Procedure. The applicants request that the Commission's order be issued as soon as the rules allow, and that there be no thirty-day waiting period between the issuance of the Commission's order and the date on which it is to become effective. The applicants hereby waive a recommended decision by a hearing officer or other responsible officer of the Commission and hereby consent that the Division of Investment Management may assist in the preparation of the Commission's decision and/or order in the matter unless such Division opposes the matters covered hereby. Item 6. Exhibits and Financial Statements. (a) Exhibits. A - Amended and Restated Article of Incorporation of Mobile Energy Services Holdings, Inc. (To be filed by Amendment). G - Form of Federal Register Notice. H - 1 Organizational Chart Showing Ownership of Southern Electric and Projects as of September 30, 1995. (To be filed by Amendment). H - 2 Organizational Chart Showing Ownership of Southern Electric and Projects Following Interim Reorganization. (To be filed by Amendment). (b) Financial Statements. Not applicable. Item 7. Information as to Environmental Effects. (a) In light of the nature of the proposed transactions, as described in Item 1 hereof, the Commission's action in this 18 matter will not constitute any major federal action significantly affecting the quality of the human environment. (b) No other federal agency has prepared or is preparing an environmental impact statement with regard to the proposed transactions. SIGNATURE Pursuant to the requirements of the Public Utility Holding Company Act of 1935, the undersigned companies have duly caused this statement to be signed on their behalf by the undersigned thereunto duly authorized. Dated: October 31, 1995 THE SOUTHERN COMPANY By: /s/Tommy Chisholm Tommy Chisholm Secretary MOBILE ENERGY SERVICES HOLDINGS, INC. By: /s/Tommy Chisholm Tommy Chisholm Secretary SOUTHERN ELECTRIC INTERNATIONAL, INC. By: /s/Tommy Chisholm Tommy Chisholm Secretary 19 EX-99 2 EXHIBIT G Exhibit G FORM OF FEDERAL REGISTER NOTICE The Southern Company ("Southern"), a registered holding company whose address is 64 Perimeter Center East, Atlanta, Georgia 30346, and its wholly-owned subsidiaries, Southern Electric International, Inc. ("Southern Electric") and Mobile Energy Services Holdings, Inc. ("MESH"), have filed an application or declaration pursuant to Sections 6(a), 7, 9(a), 10, 12(b) and (f), 32 and 33 of the Act and Rules 43, 45, 53, and 54 thereunder. Southern has heretofore acquired interests in various foreign and domestic "exempt wholesale generators" and "foreign utility companies" (collectively, "Exempt Projects"), and owns indirectly through MESH and Southern Electric 100% of the equity interests in Mobile Energy Services Company, L.L.C., which owns and operates a non-exempt cogeneration project in Alabama. (See HCAR Nos. 26185 and 26330, dated December 13, 1994 and July 13, 1995, respectively). Southern has initiated steps to combine the ownership of all of its Exempt Projects under a single subsidiary, SEI Holdings, Inc. ("Holdings"), which is a "Project Parent" within the meaning of HCAR No. 26338, dated July 25, 1995. Southern is now requesting authority for several additional transactions in the final restructuring of its project portfolio and for certain related future transactions. Southern states that one of the primary purposes for the reorganization is to facilitate Holdings' access to external sources of debt and equity capital, the issuance of which would be supported by the cash flows and income of all of Southern's current and future project investments. Specifically, in order to direct a portion of the income and cash flows from MESH (which is not an Exempt Project) to Holdings, Southern proposes to amend MESH's articles of incorporation to create a class of non-voting preferred stock that would be issued to Southern and transferred by Southern to Holdings or a subsidiary of Holdings. Southern will continue to hold the common stock of MESH. Second, Southern proposes to transfer the common stock of Southern Electric to Holdings. Southern Electric, which is Southern's independent power development, marketing and service subsidiary, will continue to engage in those activities authorized by the Commission in HCAR No. 26212, dated December 30, 1994. Third, Southern and Holdings request authority to invest up to $300 million from time to time through December 31, 2001, in the securities of one or more companies that will derive substantially all of their income from the ownership or operation of "qualifying facilities" within the meaning of the Public Utility Regulatory Policies Act of 1978, the production and distribution of thermal energy products, such as steam, and the business of brokering and marketing of energy commodities, including electricity, natural gas and fuels (collectively, "Energy-Related Companies"). Southern and Holdings have also restated the authority Southern currently has under File No. 70-8421 to acquire the securities of intermediate subsidiaries (called "Project Parents") organized to acquire and hold the securities of Exempt Projects. Southern is now requesting the flexibility to use such subsidiaries (called "Intermediate Subsidiaries") to acquire and hold interests in Energy-Related Companies, as well as Exempt Projects, and to acquire other special purpose subsidiaries to engage in any of the activities that Southern Electric is currently authorized to engage in. Finally, Southern requests authority to provide financial guaranties in an aggregate amount at any time outstanding not to exceed $1.2 billion in respect of the securities of Holdings or any direct or indirect subsidiary of Holdings, subject, however, to the limitations of Rule 53 with respect to financial guaranties incurred in connection with any direct or indirect investment in an Exempt Project. Southern proposes to relinquish its authority under certain other currently effective Commission orders upon the effective date of the order in this proceeding in order to eliminate overlapping authorizations. -----END PRIVACY-ENHANCED MESSAGE-----