U.S. Securities & Exchange Commission
SEC Seal
Home | Previous Page
U.S. Securities and Exchange Commission

SECURITIES AND EXCHANGE COMMISSION

(Release No. 35-27929; 70-10256)

Northeast Utilities

Order Authorizing Issuance of Common Stock

December 28, 2004

Northeast Utilities ("NU"), a public utility holding company registered under the Public Utility Holding Company Act of 1935, as amended, ("Act"), has filed with the Securities and Exchange Commission ("Commission") a declaration ("Declaration") under sections 6(a) and 7 of the Act and rule 54 under the Act. The Commission issued a notice of the filing of the Declaration on November 23, 2004 (HCAR No. 27916).

NU requests authority to issue up to 275,000 Northeast Utilities Common Shares, $5.00 par value ("Common Shares") from the date of the order granting the authorization requested through December 31, 2014, inclusive. This figure is based on a projected need of not more than 25,000 Common Shares per year from 2005 through 2014, plus the 25,000 shares currently needed to satisfy deferred shares obligations. NU expects to modify its trustee compensation program from time to time in the future as necessary or desirable to take into account trends in director compensation, regulatory and tax changes and business needs.

The proposed transaction is subject to rule 54 under the Act, and meets the requirements set forth in that rule. Rule 54 provides that, in determining whether to approve the issue or sale of any securities for purposes other than the acquisition of any "exempt wholesale generator" ("EWG") or "foreign utility company" ("FUCO") or other transactions unrelated to EWGs or FUCOs, the Commission shall not consider the effect of the capitalization or earnings of subsidiaries of a registered holding company that are EWGs or FUCOs if the requirements of rule 53(a), (b) and (c) are satisfied.1

Fees, commissions and expenses to be incurred in connection with the proposed transactions are not expected to exceed $20,000, consisting of commissions on the proposed open market Common Share purchases and the expenses of preparing the Declaration. Applicants state that no state or federal commission, other than this Commission, has jurisdiction over the proposed transactions.

Due notice of the filing of the Declaration has been given in the manner prescribed in rule 23 under the Act, and no hearing has been requested of or ordered by the Commission. On the basis of the facts in the record, it is found that the applicable standards of the Act and rules under the Act are satisfied, and no adverse findings are necessary.

IT IS ORDERED, under the applicable provisions of the Act and the rules under the Act, that the Declaration, as amended, be, and hereby is, granted and 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, pursuant to delegated authority.

Margaret H. McFarland
Deputy Secretary


Endnotes

NU also asserts that it and its subsidiaries are, and will continue to be, in compliance with the other provisions of rule 53(a) and (b).

NU asserts that the proposed transactions, considered in conjunction with the effect of the capitalization and earnings of NU's EWG, would not have a material adverse effect on the financial integrity of the NU system, or an adverse impact on NU's public-utility subsidiaries, their customers, or the ability of State commissions to protect such public-utility customers.

NU notes that the 2004 Order concerning NU's EWG investments was predicated, in part, upon an assessment of NU's overall financial condition which took into account, among other factors, NU's consolidated capitalization. NU's current EWG investment, NGC, (it has no FUCO investment) has been profitable for all quarterly periods ending June 30, 2000 through June 30, 2004 (NGC was acquired in March 2000).

NU states that its consolidated capitalization ratios as of September 30, 2004, with consolidated debt including all short-term debt and non-recourse debt of the EWG, were as follows:


 

$ thousand

%

Common shareholders' equity

2,318,909

33.3

Preferred stock

116,200

1.7

Long-term and short-term debt

2,929,700

42.1

Rate Reduction Bonds

1,591,944

22.9

Total:

6,956,753

100.0

NU states that if Rate Reduction Bonds are excluded, the consolidated capitalization ratio of NU as of September 30, 2004 is as follows:

 

$ thousand

%

Common shareholders' equity

2,318,909

46.0

Preferred stock

116,200

2.2

Long-term and short-term debt

2,929,700

54.6

Total:

5,364,809

100.0

NU states that in addition, NGC has made a positive contribution to earnings of $148.7 million in revenues in the 12-month period ending June 30, 2004 and net income of $39.4 million for the same period.


http://www.sec.gov/divisions/investment/opur/filing/35-27929.htm

Modified: 01/04/2005