(Release No. 35- 27732; 70-10137)
Georgia Power Company
Order Authorizing Reimbursement Agreement
October 3, 2003
Georgia Power Company ("Georgia Power"), Atlanta, Georgia, a wholly owned public utility subsidiary of The Southern Company ("Southern"), a registered holding company, has filed with the Securities and Exchange Commission ("Commission") a declaration, as amended ("Declaration") under section 12(b) of the Public Utility Holding Company Act of 1935, as amended ("Act") and rules 45 and 54 under the Act. The Commission issued a notice of the filing of the Declaration on September 5, 2003 (Holding Company Act Release No. 27720). No request for hearing was received.
Georgia Power owns 50% of the outstanding common stock of Southern Electric Generating Company ("SEGCO"), an indirect public utility subsidiary of Southern. Alabama Power Company ("Alabama Power"), a wholly owned public utility subsidiary of Southern, owns the remaining outstanding common stock of SEGCO.1 SEGCO owns units one through four of the Ernest C. Gaston steam plant near Wilsonville, Alabama. The plant sells all of its energy and capacity to Georgia Power and Alabama Power in proportion to their ownership interest in the plant. Alabama Power acts as SEGCO's agent in the operation of the plant.
On May 22, 2003 SEGCO issued its Series A 4.40% Senior Notes due May 15, 2013 in an aggregate principal amount of $50 million. As part of the financing, Alabama Power guaranteed repayment of the SEGCO debt.2 Georgia Power proposes to agree by letter to reimburse Alabama Power pro rata (based on Georgia Power's ownership of the outstanding equity securities of SEGCO as of the date the payment is due) for any payments made by Alabama Power under its guarantee. The letter will provide that the commitment of Georgia Power will terminate when Georgia Power ceases to own an interest in SEGCO.
The proposed transaction is subject to rule 54 under the Act, which provides that, in determining whether to approve an application which does not relate to any "exempt wholesale generator" ("EWG") or "foreign utility company" ("FUCO"), the Commission shall not consider the effect of the capitalization or earnings of any such EWG or FUCO which is a subsidiary of a registered holding company if the requirements of rule 53(a), (b) and (c) under the Act are satisfied.
Georgia Power states that Southern currently meets all of the conditions of rule 53(a). At June 30, 2003, Southern's "aggregate investment" (as defined in rule 53(a)(1)) in EWG's and FUCO's did not exceed 50% of its "consolidated retained earnings" (as defined in rule 53(a)(1)). In addition, Southern has complied and will continue to comply with the record-keeping requirements of rule 53(a)(2), the limitation under rule 53(a)(3) on the use of operating company personnel to render services to EWGs and FUCOs, and the requirements of rule 53(a)(4) concerning the submission of copies of certain filings under the Act to retail rate regulatory commissions. Further, Georgia Power states that none of the circumstances described in rule 53(b) has occurred. Rule 53(c), by its terms, is inapplicable.
Georgia Power states that no other state or federal commission has jurisdiction over the proposed transaction. Georgia Power states that the fees, commissions and expenses to be incurred in connection with the proposed transaction are estimated to be approximately $10,000.
Due notice of the filing of the Declaration has been given in the manner prescribed by rule 23 under the Act, and no hearing has been requested of, or ordered by, the Commission. Based on the facts in the record, the Commission finds 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 the rules under the Act, that the Declaration be permitted to become effective immediately, subject to the terms and conditions prescribed in rule 24 under the Act.
For the Commission, by the Division of Investment Management, under delegated authority.
Margaret H. McFarland