Holding Company Act Release 27575
SECURITIES AND EXCHANGE COMMISSION
(Release No. 35-27575; 70-10052)
Alliant Energy Corporation, et al.
Supplemental Order Authorizing Issuance and Sale of Short Term Debt; Reservation of Jurisdiction
October 10, 2002
Alliant Energy Corporation ("Alliant Energy"), a registered holding company located in Madison, Wisconsin, Interstate Power and Light Company ("IP&L"), a direct public-utility company subsidiary of Alliant Energy located in Cedar Rapids, Iowa, and certain other direct and indirect subsidiaries of Alliant Energy (collectively, "Applicants") have filed with the Securities and Exchange Commission ("Commission") a post-effective amendment ("Amendment") to a previously filed application-declaration under sections 6(a) and 7 of the Public Utility Holding Company Act of 1935, as amended ("Act") and rule 54 under the Act. The Commission issued a notice of the underlying application-declaration on March 22, 2002.1
By order dated June 21, 2002 ("Prior Order"),2 the Commission authorized Alliant Energy and certain of its public-utility company and nonutility subsidiaries to restate, modify and extend the authority previously granted to operate and fund separate money pools. Specifically, Alliant Energy, certain of its public-utility company subsidiaries (other than IP&L), and Alliant Energy Corporate Services were authorized to participate in one money pool ("Utility Money Pool"), and certain of Alliant Energy's direct and indirect nonutility subsidiaries were authorized to participate in another money pool. To the extent required, participating subsidiaries were authorized to borrow from and extend credit to each other through the system money pools. Additionally, the Commission authorized Alliant Energy to issue and sell through December 31, 2004 ("Authorization Period") commercial paper and/or unsecured notes evidencing short-term borrowings from banks or other institutional lenders ("Short-term Debt") in an aggregate amount at any time outstanding not to exceed $1 billion. In the Prior Order, the Commission reserved jurisdiction over two requests by IP&L: (1) to participate in the Utility Money Pool under the terms of the proposed Amended and Restated Utility Money Pool Agreement, which was filed as an exhibit to the underlying application-declaration; and (2) to issue and sell up to an aggregate amount of $300 million in Short-term Debt. Both requests are subject to approval by the Minnesota Public Utilities Commission ("Minnesota Commission"), and the request for participate in the Utility Money Pool also requires the approval of the Illinois Commerce Commission.
Applicants seek a supplemental order from the Commission, releasing jurisdiction over IP&L's proposed issuance of Short-term Debt. Specifically, they request authority for IP&L to issue Short-term Debt in an aggregate principal amount at any time outstanding that, when added to any borrowings by IP&L under the Utility Money Pool, will not exceed either the limit set by the Minnesota Commission or $300 million, whichever is less. IP&L has received an order from the Minnesota Commission approving, among other things, short-term borrowings by IP&L, through March 31, 2003, in an aggregate amount at any time not to exceed $180 million. In the event that IP&L does not obtain another order from the Minnesota Commission to issue and sell Short-term Debt through the end of the Authorization Period, the company will not issue or sell any such securities. These short-term borrowings by IP&L from third parties will comply with the terms, conditions, limitations and reporting requirements set forth in the Prior Order.
Applicants request that the Commission continue to reserve jurisdiction over IP&L's participation in the Utility Money Pool under the terms of the Amended and Restated Utility Money Pool Agreement, pending IP&L's receipt of orders from the Illinois Commission and the Minnesota Commission.
Applicants estimate that the additional fees, commissions and expenses incurred or to be incurred in connection with the filing of the Amendment will not exceed $1,000.
As mentioned above, the issuance of Short-term Debt by IP&L requires approval by the Minnesota Commission, and IP&L obtained an order from the Minnesota Commission approving the issuance of Short-term Debt in an amount of up to $180 million through March 31, 2003. Except as stated above, Applicants state that no state or federal commission, other than this Commission, has jurisdiction over the proposed transaction.
Applicants state that Alliant Energy cannot comply with all of the requirements of rule 53(a), but that none of the adverse conditions described in rule 53(b) exist. During the twelve month period that ended June 30, 2002, Alliant Energy's "aggregate investment," as that term is defined in rule 53(a)(1)(i), in exempt wholesale generators ("EWGs") and foreign utility companies ("FUCOs"), as those terms are respectively defined in sections 32 and 33 of the Act, was approximately $537 million, which was approximately sixty-seven percent of Alliant Energy's consolidated retained earnings during that period. Although Alliant Energy's current aggregate investment in EWGs and FUCOs exceeds the limit described in rule 53(a), the company is still below the previously established aggregate investment limit.3 Applicants state that, since the Commission issued the Prior EWG/FUCO Order, these types of investments have not had a material adverse impact on Alliant Energy's consolidated capitalization. In addition, Alliant Energy's common stock equity ratio has increased since the issuance of the Prior EWG/FUCO Order.4 Applicants also state that, since the Prior EWG/FUCO Order was issued, Alliant Energy's level of earnings from its investments in EWGs and FUCOs has not changed materially.
The Commission issued a notice of the underlying application-declaration and did not receive any requests for hearing. Based on the facts in the record, it is found that the applicable standards of the Act are satisfied and that no adverse findings are necessary.
IT IS ORDERED, under the applicable provisions of the Act and rules under the Act, that the post-effective amendment is permitted to become effective immediately, subject to the terms and conditions prescribed in rule 24 under the Act.
IT IS FURTHER ORDERED, that jurisdiction is reserved over IP&L's proposed participation in the Utility Money Pool, pending completion of the record.
For the Commission, by the Division of Investment Management, pursuant to delegated authority.
Margaret H. McFarland
1 Holding Co. Act Release No. 27509.
2 Alliant Energy, Holding Co. Act Release No. 27542
3 See Alliant Energy, Holding Co. Act Release No. 27448 (October 3, 2001) ("Prior EWG/FUCO Order") (authorizing Alliant Energy to increase its aggregate investment in EWGs and FUCOs to 100% of Alliant Energy's consolidated retained earnings through December 31, 2004).
4 As of September 30, 2001, the end of the quarter immediately preceding the Prior EWG/FUCO Order, the company's common stock equity ratio was thirty-six percent; as of June 30, 2002, Alliant Energy's consolidated capitalization consisted of thirty-seven percent common equity.