File No. 70-10186
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
AMENDMENT NO. 7 (POST-EFFECTIVE AMENDMENT NO. 4) TO
FORM U-1
APPLICATION OR DECLARATION
under
The Public Utility Holding Company Act of 1935
THE SOUTHERN COMPANY
270 Peachtree Street, N.W.
Atlanta, Georgia 30303
ALABAMA POWER COMPANY SOUTHERN COMPANY CAPITAL FUNDING, INC.
600 North 18th Street 1403 Foulk Road, Suite 102
Birmingham, Alabama 35291 Wilmington, Delaware 19803
GEORGIA POWER COMPANY SOUTHERN COMPANY ENERGY SOLUTIONS, LLC
241 Ralph McGill Boulevard, N.E. 241 Ralph McGill Boulevard, N.E.
Atlanta, Georgia 30308 Atlanta, Georgia 30308
GULF POWER COMPANY SOUTHERN COMPANY HOLDINGS, INC.
One Energy Place 270 Peachtree Street N.W
Pensacola, Florida 32520 Atlanta, Georgia 30302
MISSISSIPPI POWER COMPANY SOUTHERN COMPANY SERVICES, INC.
2992 West Beach Boulevard 270 Peachtree Street N.W
Gulfport, Mississippi 39501 Atlanta, Georgia 30302
SAVANNAH ELECTRIC AND POWER COMPANY SOUTHERN NUCLEAR OPERATING COMPANY, INC.
600 East Bay Street 40 Inverness Center Parkway
Savannah, Georgia 31401 Birmingham, Alabama 35242
SOUTHERN POWER COMPANY SOUTHERN ELECTRIC GENERATING COMPANY
600 North 18th Street 600 North 18th Street
Birmingham, Alabama 35291 Birmingham, Alabama 35291
SOUTHERN COMMUNICATIONS SERVICES, INC.
5555 Glenridge Connector, Suite 500
Atlanta, Georgia 30342
(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)
Patricia L. Roberts, Assistant Secretary
The Southern Company
270 Peachtree Street, N.W.
Atlanta, Georgia 30303
William E. Zales, Jr., Vice President Daniel P. McCollom, Secretary
and Corporate Secretary Southern Company Capital Funding, Inc.
Alabama Power Company 1403 Foulk Road, Suite 102
600 North 18th Street Wilmington, Delaware 19803
Birmingham, Alabama 35291
Janice G. Wolfe, Corporate Secretary Patricia L. Roberts, Secretary
Georgia Power Company Southern Company Energy Solutions, LLC
241 Ralph McGill Boulevard, N.E. 270 Peachtree Street N.W.
Atlanta, Georgia 30308 Atlanta, Georgia 30302
Susan N. Ritenour, Secretary and Treasurer Patricia L. Roberts, Secretary
Gulf Power Company Southern Company Holdings, Inc.
One Energy Place 270 Peachtree Street N.W.
Pensacola, Florida 32520 Atlanta, Georgia 30302
Vicki L. Pierce, Corporate Secretary Patricia L. Roberts, Assistant Secretary
Mississippi Power Company Southern Company Services, Inc.
2992 West Beach Boulevard 270 Peachtree Street N.W.
Gulfport, Mississippi 39501 Atlanta, Georgia 30302
Nancy E. Frankenhauser, Corporate Secretary Sherry A. Mitchell, Corporate Secretary
Savannah Electric and Power Company Southern Nuclear Operating Company, Inc.
600 East Bay Street 40 Inverness Center Parkway
Savannah, Georgia 31401 Birmingham, Alabama 35242
Patricia L. Roberts, Secretary William E. Zales, Jr., Corporate Secretary
Southern Power Company Southern Electric Generating Company
270 Peachtree Street N.W. 600 North 18th Street
Atlanta, Georgia 30302 Birmingham, Alabama 35291
Patricia L. Roberts, Secretary
Southern Communications Services, Inc.
270 Peachtree Street N.W.
Atlanta, Georgia 30302
(Names and addresses of agents for service)
The Commission is requested to mail signed copies of all
orders, notices and communications to:
Thomas A. Fanning Melissa K. Caen, Esq.
Executive Vice President, Troutman Sanders LLP
Chief Financial Officer and Treasurer 600 Peachtree Street, N.E.
The Southern Company Suite 5200
270 Peachtree Street, N.W. Atlanta, Georgia 30308-2216
Atlanta, Georgia 30303
EXPLANATORY NOTE: This Amendment No. 7 (Post-Effective Amendment No. 4)
replaces in its entirety Amendment No. 6 (Post-Effective Amendment No. 3)
which inadvertently failed to include certain language relating to the
occurrence of a "Ratings Event."
The Application in the foregoing file is amended to include the
information below. Capitalized terms used herein and not defined herein shall
have the meanings assigned to them in earlier filings made in Commission File
No. 70-10186. Except as modified herein, the transactions requested herein are
subject to Section 1.5: Parameters Applicable to Authorized Financing
Transactions in Amendment No. 3 to the Application, including but not limited to
the following parameters. At all times during the Authorization Period, Southern
represents that it and its public utility subsidiaries will each maintain a
common equity ratio of at least thirty percent of its consolidated
capitalization (common equity, preferred stock and long-term and short-term
debt) as reflected in its most recent Form 10-K or Form 10-Q filed with the
Commission adjusted to reflect changes in capitalization since the balance sheet
date, unless otherwise authorized. With respect to the securities issuance
authority proposed in this Application: (i) within four business days after the
occurrence of a Ratings Event, the applicant-declarants will notify the
Commission of its occurrence (by means of a letter, via fax, email or overnight
mail to the Office of Public Utility Regulation) and (ii) within 30 days after
the occurrence of a Ratings Event, the applicant-declarants will submit a
post-effective amendment to this Application explaining the material facts and
circumstances relating to that Ratings Event (including the basis on which,
taking into account the interests of investors, consumers and the public as well
as other applicable criteria under the Act, it remains appropriate for the
applicant-declarant(s) to issue the securities for which authorization is sought
in this Application, so long as the applicable applicant-declarant(s)
continue(s) to comply with the other applicable terms and conditions specified
in the Commission's order authorizing the transactions requested in this
Application). Furthermore, no securities authorized as a result of this
Application (other than Common Stock, Commercial Paper and short-term bank debt
(with a maturity of one year or less)) will be issued following the 60th day
after a Ratings Event if any such downgraded rating has not been upgraded to
investment grade. The applicant-declarants also request that the Commission
reserve jurisdiction through the remainder of the Authorization Period over the
issuance of any authorized securities pursuant to this Application (other than
Common Stock, Commercial Paper and short-term bank debt (with a maturity of one
year or less)) that are prohibited from being issued after the 60th day
following a Ratings Event if no revised rating reflecting an investment grade
rating has been issued. A "Ratings Event" will be deemed to have occurred if,
during the Authorization Period, (i) any outstanding security of the issuer that
is rated is downgraded below investment grade; (ii) any security to be issued by
any applicant-declarant pursuant to the authorization sought hereby upon
original issuance is rated below investment grade; or (iii) any outstanding
security of Southern that is rated is downgraded below investment grade. For
purposes of this provision, a security will be deemed to be rated "investment
grade" if it is rated investment grade by at least one nationally recognized
statistical rating organization, as that term is used in paragraphs
(c)(2)(vi)(E), (F) and (H) of Rule 15c3-1 under the 1934 Act.
Item 1.
A. The text contained within subsection 5 in the second paragraph of
Section 1.4 shall be amended and restated as follows:
5. Southern and Southern Company Holdings, Inc. ("Holdings") request
authority to provide guarantees on behalf or for the benefit of each of
their subsidiaries in an aggregate amount not to exceed $1.5 billion at any
time outstanding.
B. The following text should be inserted at the end of the second
paragraph of Section 1.4 of Item 1:
6. The applicant-declarants request authority to enter into
transactions to manage interest rate, credit and equity price risk with
regard to the issuance of securities.
7. Southern requests authority to acquire certain securities of
certain of its public utility affiliates.
8. Southern and Holdings request authorization to acquire the
securities of Intermediate Subsidiaries and subsidiaries authorized to
engage in Development Activities and Administrative Activities with respect
to Exempt Businesses (each as defined below).
C. Clause (iv) of the second paragraph of Section 1.5 shall be amended and
restated as follows: "(iv) on any Guarantee by Southern or Holdings of
obligations of their subsidiaries (other than Capital Funding) exceed 500 basis
points over a U.S. treasury security having an amount equal to the guaranteed
amount."
D. The final paragraph of Section 1.5 shall be amended and restated as
follows:
Security Ratings: The ratings, if any, of the securities issued by
the applicant-declarants are as follows:
S&P Moody's Fitch
Alabama Power Company
Unsecured Debt A A2 A+
Trust Preferred BBB+
Securities A3 A
Preferred Stock Baa1 A
Commercial Paper A-1 P-1 F-1
Georgia Power Company Unsecured Debt A A2 A+
Trust Preferred BBB+
Securities A3 A
Preferred Stock Baa1 A
Commercial Paper A-1 P-1 F-1
Gulf Power Company
Unsecured Debt A A2 A
Trust Preferred BBB+
Securities A3 A-
Preferred Stock Baa1 A-
Commercial Paper A-1 P-1 F-1
Mississippi Power
Company Unsecured Debt A A1 AA-
Trust Preferred BBB+
Securities A2 A+
Preferred Stock A3 A+
Commercial Paper A-1 P-1 F-1
Savannah Electric and
Power Company Unsecured Debt A A2
Trust Preferred Stock BBB+ A3
Preferred Stock Baa1
Commercial Paper A-1 P-1
Southern Power Company Unsecured Debt BBB+ Baa1 BBB+
Commercial Paper A-2 P-2
Southern
Unsecured Debt A- A3 A
Trust Preferred BBB+
Securities A3
Preferred Stock Baa1
Commercial Paper A-1 P-1 F -1
SCS Corporate Credit Rating A
E. The text contained within subsection 5 in Section 1.7 shall be amended
and restated as follows:
5. Guarantees. From time to time through the Authorization
Period, Southern and Holdings request authority to enter into
guarantees, enter into expense agreements or otherwise provide credit
support with respect to the debt or other securities or obligations,
whether for payment and/or performance, of any or all of the
subsidiaries of Southern (1) and Holdings (2) ("Guarantees"), as the
case may be; provided that the total amount of Guarantees for Southern
and
NOTE 1
__________________________
1 Pursuant to HCAR No. 35-27867A (File No. 70-10186), Southern currently has
authority to provide from time to time guarantees on behalf of or for the
benefit of SCS in an aggregate principal amount not to exceed $330 million at
any time outstanding and to provide guarantees on behalf of or for the benefit
of Capital Funding. Southern proposes that the authorization to issue up to $1.5
billion in Guarantees sought in this file would supersede and replace the
authorization to provide guarantees to SCS pursuant to HCAR No. 35-27867A and be
effective immediately upon the date of the Commission's order herein but would
not supersede and replace the authorization to issue guarantees on behalf of or
for the benefit of Capital Funding pursuant to HCAR No. 35-27867A.
NOTE 2
2 Pursuant to HCAR No. 35-26468 (File No. 70-8733) (the "Holdings Order"),
Southern, along with other applicants, was authorized to consolidate all of its
direct and indirect ownership interests in exempt projects under one subsidiary,
Holdings, which in turn was authorized to form intermediate and special purpose
subsidiaries to support investment in exempt projects, including Exempt
Wholesale Generators ("EWGs"), Foreign Utility Companies ("FUCOs") and
Energy-Related Companies. Southern also was authorized to guarantee the
securities issued by any of its direct or indirect subsidiaries from time to
time through December 31, 2000 in an aggregate amount not to exceed $1.2 billion
at any time outstanding. Holdings also was authorized to guarantee the
securities issued by any of its direct or indirect subsidiaries from time to
time through December 31, 2000 in an aggregate amount not to exceed $1.2 billion
at any time outstanding. Southern was authorized to provide performance
guarantees on behalf of Holdings and various other entities in an amount not to
exceed $800 million at any one time outstanding. Holdings, along with other
entities, also was authorized to provide performance guarantees to its direct or
indirect subsidiaries through December 31, 2003. The amount of these guarantees
were to be included in calculating the $1.2 billion aggregate amount of
performance guarantees provided by Southern only if they were supported by an
agreement or undertaking of Southern. Pursuant to HCAR No. 35-27303 (File No.
70-9727) (the "Transfer Order"), the authority granted in the Holdings Order was
transferred to Southern through June 30, 2005. Therefore, each of Southern and
Holdings currently has authority to provide from time to time guarantees on
behalf of its subsidiaries in an aggregate amount not to exceed $1.2 billion at
any time outstanding and performance guarantees on behalf of their subsidiaries
in an aggregate amount not to exceed $800 million at any time outstanding.
Pursuant to this authorization, Southern and Holdings have approximately $57
million in guarantees currently outstanding. Southern and Holdings propose that
the authorization sought in this file would supersede and replace the
authorization granted in the Transfer Order and be effective immediately upon
the date of the Commission's order herein.
Holdings at any time outstanding does not exceed an aggregate amount of
$1.5 billion, provided however, that the amount of any Guarantees in
respect of obligations of any nonutility subsidiary shall also be
subject to the limitations of Rule 53(a)(1) and Rule 58(a)(1), as
applicable, and provided further that any Guarantee that is outstanding
on the last day of the Authorization Period will expire or terminate in
accordance with the stated terms of the Guarantee. In addition to
providing direct parent guarantees, Southern and Holdings may also
provide Guarantees in the form of formal credit enhancement agreements,
including but not limited to "keep well" agreements and reimbursement
undertakings under letters of credit. Guarantees may, in some cases, be
provided to support obligations of subsidiaries that are not readily
susceptible of exact quantification or that may be subject to varying
quantification. In such cases, Southern or Holdings, as the case may
be, will determine the exposure under the Guarantee for purposes of
measuring compliance with the proposed limitation on Guarantees by
appropriate means, including estimation of exposure based on loss
experience or projected potential payment amounts. If appropriate,
estimates will be made in accordance with generally accepted accounting
principles in the United States of America. The estimations will be
reevaluated periodically.
Southern and Holdings may each charge a fee for each
Guarantee provided that it is not greater than the cost, if any, of
obtaining the liquidity necessary to perform the Guarantee for the
period of time the Guarantee remains outstanding.
6. Financing Risk Management Devices
(i) Interest Rate Hedges. To the extent not exempt under
Rule 52, the applicant-declarants request authorization to enter into
interest rate hedging transactions with respect to existing
indebtedness that has been previously authorized by any relevant
regulatory agency ("Interest Rate Hedges") in order to reduce or manage
interest rate cost or risk. Interest Rate Hedges would only be entered
into with counterparties ("Approved Counterparties") whose senior debt
ratings, or the senior debt ratings of any credit support providers who
have guaranteed the obligations of the counterparties, as published by
S&P, are equal to or greater than BBB, or an equivalent ratings from
Moody's or Fitch Investor Service. In no case will the notional
principal amount of any Interest Rate Hedge exceed the face value of
the underlying debt instrument and related interest rate exposure.
Because transactions will be entered into for a fixed or determinable
period, the applicant-declarants will not engage in speculative
transactions. Interest Rate Hedges will involve the use of financial
instruments and derivatives commonly used in today's capital markets,
such as interest rate swaps, options, caps, collars, floors and
structured notes (i.e., a debt instrument in which the principal and/or
interest payments are indirectly linked to the value of an underlying
asset or index), or transactions involving the purchase or sale,
including short sales, of U.S. Treasury obligations. The transactions
would be for fixed periods and stated notional amounts.
(ii) Anticipatory Hedges. To the extent not exempt under
Rule 52, the applicant-declarants request authorization to enter into
interest rate hedging transactions with respect to anticipated debt
offerings ("Anticipatory Hedges"). Such Anticipatory Hedges would only
be entered into with Approved Counterparties and would be utilized to
fix and/or limit the interest rate risk associated with any new
issuance through (i) a forward sale of exchange-traded U.S. Treasury
futures contracts, U.S Treasury obligations and/or a forward swap (each
a "Forward Sale"); (ii) the purchase of put options on U.S. Treasury
obligations (a "Put Options Purchase"); (iii) a Put Options Purchase in
combination with the sale of call options on U.S. Treasury obligations
(a "Zero Cost Collar"); (iv) transactions involving the purchase or
sale, including short sales, of U.S. Treasury obligations; or (v) some
combination of a Forward Sale, Put Options Purchase, Zero Cost Collar
and/or other derivative or cash transactions, including, but not
limited to, structured notes, options, caps and collars, appropriate
for Anticipatory Hedges. Anticipatory Hedges may be executed
on-exchange ("On-Exchange Trades") with brokers through the opening of
futures and/or options positions traded on the Chicago Board of Trade
or the Chicago Mercantile Exchange, the opening of over-the-counter
positions with one or more counterparties ("Off-Exchange Trades") or a
combination of On-Exchange Trades and Off-Exchange Trades.
Fees, commissions and other amounts payable to the
counterparty or exchange (excluding, however, the settlements arising
from the financial instruments and derivatives, such as swap or option
settlements) in connection with an Anticipatory Hedge or an Interest
Rate Hedge will not exceed those generally obtainable in competitive
markets for parties of comparable credit quality.
Each applicant-declarant will determine the optimal
structure of each Anticipatory Hedge transaction at the time of
execution. An applicant-declarant may decide to lock in interest rates
and/or limit its exposure to interest rate increases. Each
applicant-declarant represents that each Interest Rate Hedge and
Anticipatory Hedge will be treated for accounting purposes under
generally accepted accounting principles. Each applicant-declarant will
comply with Statement of Financial Accounting Standards ("SFAS") 133
("Accounting for Derivative Instruments and Hedging Activities"),
including any amendments to SFAS 133, or other standards relating to
accounting for derivative transactions as are adopted and implemented
by the Financial Accounting Standards Board ("FASB"). The Interest Rate
Hedges and Anticipatory Hedges will qualify for hedge accounting
treatment under the FASB standards in effect and determined at the date
such hedges are entered into.
7. Acquisition of Securities of Certain Public Utility
Affiliates. From time to time during the Authorization Period, Southern
requests authority to acquire the common stock of Gulf Power Company
and Mississippi Power Company in an aggregate amount not to exceed $420
million and $300 million, respectively.(3)
8. Acquisition of Securities of Intermediate
Subsidiaries and subsidiaries authorized to engage in Development and
Administrative Activities with respect to Exempt Businesses. In
connection with existing and future exempt businesses authorized
pursuant to Rule 58 or Rule 53, including investments in energy-related
companies or EWGs or FUCOs ("Exempt Businesses"), Southern and Holdings
will engage directly or through subsidiaries in preliminary development
activities ("Development Activities") and administrative and management
activities ("Administrative Activities") associated with such
investments (4). Development Activities will be limited to:due diligence
and design review; market studies; preliminary engineering; site
inspection; preparation of bid proposals, including, posting of bid
bonds; application for required permits and/or regulatory approvals;
acquisition of site options and options on other necessary rights;
negotiation and execution of contractual commitments with owners of
existing facilities, equipment vendors, construction firms, power
NOTE 3
3 Southern currently has no authority from the Commission to acquire common
stock of Gulf Power Company or Mississippi Power Company.
NOTE 4
4 Southern currently has authority to organize one or more intermediate
subsidiaries to make investments in Exempt Businesses and to spend up to $300
million on Development Activities pursuant to the Transfer Order. Southern
proposes that the authorization sought in this file would supersede and replace
the authorization granted in the Transfer Order and be effective immediately
upon the date of the Commission's order herein.
purchasers, thermal "hosts," fuel suppliers and other project
contractors; negotiation of financing commitments with lenders and
other third-party investors; and other preliminary activities as may be
required in connection with the Development Activities and
Administrative Activities. Southern and Holdings request authority to
acquire directly or indirectly the securities of one or more
corporations, trusts, partnerships, limited liability companies or
other entities (collectively, "Intermediate Subsidiaries"), which would
be organized exclusively for the purpose of acquiring, holding and/or
financing the acquisition of the securities of or other interest in one
or more Exempt Businesses, provided that Intermediate Subsidiaries may
also engage in Development Activities and Administrative Activities. To
the extent that Southern or Holdings provide funds directly or
indirectly to an Intermediate Subsidiary which are used for the purpose
of making an investment in any Exempt Business, the amount of such
funds will be included in Southern's or Holdings' "aggregate
investment" in these entities, as calculated in accordance with rule 53
or rule 58, as applicable.
G. Section 1.8 is amended and restated as follows:
With respect to transactions pursuant to the authority sought
in this Application, the applicant-declarants will file, on a quarterly
basis (within 75 days following the close of the fourth calendar
quarter and 60 days following the close of each other calendar
quarter), the following information: (i) the issuances of any Common
Stock under the authority requested (except issuances pursuant to the
Plans), Preferred Securities, Preferred Stock or Equity-linked
Securities during the quarter, including the number of shares, the
purchase price per share and the market price per share at the date of
the agreement of sale, and also showing, separately, the cumulative
amount of each type of security issued to date during the Authorization
Period; (ii) the amount and terms of any Long-term Debt issued during
the quarter which shall also separately show the amount of Long-term
Debt cumulatively issued to date during the Authorization Period; (iii)
the amount of any Short-term or Term Loan Notes or Commercial Paper
outstanding at the end of the quarter; (iv) a statement describing the
uses for the proceeds of the securities issued; (v) the total
capitalization ratio of Southern as of the end of the quarter,
including the dollar and percentage components of the capital structure
on a consolidated basis, with consolidated debt to include all
short-term debt and nonrecourse debt of all EWGs and FUCOs; (vi)
market-to-book ratio of the Common Stock; (vii) the total number of
shares of Common Stock issued or issuable under any of the Plans,
together with the cumulative number of shares issued under the Plans to
date during the Authorization Period; (viii) consolidated balance
sheets as of the end of the quarter for Southern, Capital Funding and
Holdings (if any are engaged in any financings pursuant to the
authority granted in connection with this Application during the
quarter); (ix) if a Guarantee is issued during the quarter, the name of
the guarantor, the name of the beneficiary of the Guarantee and the
amount, terms and purpose of the Guarantee; (x) if Common Stock has
been transferred to a seller of securities of a company being acquired,
the number of shares so issued, the value per share and whether the
shares are restricted in the hands of the acquirer; (xi) information on
significant variable interest entities where Southern is not the
primary beneficiary, formed with any financing proceeds pursuant to the
order in connection herewith, including a description of any financing
transactions conducted during the reporting period that were used to
fund such variable interest entities and a description of the
accounting for such transactions under FASB Interpretation 46R; (xii)
future registration statements filed under the Securities Act of 1933,
as amended (the "1933 Act"), with respect to securities that are the
subject of the instant Application will be filed or incorporated by
reference as exhibits to the next certificate filed under Rule 24;
(xiii) notational amount and principal terms of any Interest Rate
Hedges or Anticipatory Hedges entered into during the quarter and
identifying the counterparties; (xiv) purchases of common stock of Gulf
Power Company and Mississippi Power Company by Southern during the
quarter indicating the number of shares purchased and the purchase
price; (xv) a copy of the balance sheet and income statements as of and
for the period ending on the last day of the quarter for direct
subsidiaries of Southern that hold the securities of Exempt Projects
including, without limitation, Holdings; (xvi) a narrative description
of Holdings activities during the quarter just ended organized by
business category (project development, project related services and
other) and, within each category, a description of new developments by
project type (e.g., EWGs, FUCOs, energy related activities, etc.);
(xvii) a chart showing, as of the end of the quarterly period, all
associate companies of Southern that are EWGs, FUCOs, Intermediate
Subsidiaries, special purpose subsidiaries that are organized to engage
in any of the activities in which Southern is currently authorized to
engage ("Special Purpose Subsidiaries") and Energy-Related Companies,
Southern's direct or indirect investment in each entity and the
aggregate direct and indirect investment by Southern in all these
entities and Southern's percentage equity ownership in each entity,
together with a statement indicating by category the type of entity or
person (i.e., domestic corporation, foreign corporation, foreign
government or natural person) owning the equity interests in each
entity that are not held directly or indirectly by Southern; (xviii)
investments made by Southern, directly or indirectly, in any
Intermediate Subsidiary or Special Purpose Subsidiary in the previous
quarter (to the extent not included in the response to (xvii) above),
indicating the amount and type of the investment and generally
identifying the facility with respect to which the Intermediate
Subsidiary or Special Purpose Subsidiary was organized or formed; (xix)
the amount, type and terms (including interest rate and maturity and
the basis for inflation adjustment in the case of nonrecourse
indebtedness and denominated in any currency other than U.S. dollars)
of securities issued by Holdings or any subsidiary of Holdings (other
than an Exempt Business) to third persons; (xx) a computation in
accordance with Rule 53(a) of aggregate investment in EWGs and FUCOs;
(xxi) a statement of aggregate investment as a percentage of the
following: total capitalization, net utility plant, total consolidated
assets and market value of common equity, all as of the end of the
quarter; (xxii) consolidated capitalization ratios as of the end of the
quarter, with consolidated debt to include all short-term debt and
nonrecourse EWG and FUCO debt to the extent normally consolidated under
applicable financial reporting rules; (xxiii) an analysis of the growth
in consolidated retained earnings distinguishing total earnings growth
attributable to EWGs and FUCOs from that attributable to other
subsidiaries of Southern; (xxiv) a statement of revenues and net income
of each EWG and FUCO for the 12 months ended as of the end of the
quarter; (xxv) the names of any new Energy-Related Companies formed
during the period not previously disclosed; (xxvi) a copy of the
balance sheet and income statements for the period ending on the last
day of the quarter for each Energy-Related Company, including a
narrative discussion of any losses incurred during the period if
applicable; (xxvii) a description of specific activities conducted by
each Energy-Related Company during the quarter (i.e., the purpose of
each subsidiary); and (xxviii) a statement for the period indicated the
amount of revenue for each Energy-Related Company attributable to
power, natural gas and any other energy commodity, expressed as a
percentage of total revenues from the physical sale of energy
commodities during the period. Southern will file Rule 24 certificates
to notify the Commission of its issuances of securities that are exempt
under the rules and regulations of the Act. Portions of the 1933 Act
filings or the 1934 Act reports that contain disclosures of
transactions occurring pursuant to the authorizations to be granted
pursuant to this Application may be incorporated by reference into this
proceeding through Rule 24 certificates of notification if the filings
or reports contain the specific information required as set forth
above. The certificates will also contain all other information
required by Rule 24, including the certification that each transaction
being reported on has been carried out in accordance with the terms and
conditions of, and for the purposes represented in, this Application.
Item 2.
The fees and expenses in connection with the proposed transactions
(other than those described in Item 1 hereof and other than underwriting
discounts and commissions) are estimated not to exceed $5,000,000. The
prospectus supplement relating to each offering of Common Stock, Long-term Debt,
Preferred Stock, Preferred Securities or Equity-linked Securities will reflect
the actual expenses based upon the amount of the related offering.
Item 3.
Item 3 is amended and restated to read as follows:
The applicant-declarants consider that Sections 6(a), 7, 9(a), 10,
12(b) and 12(f) of the Act and Rules 42, 45, 53 and 54 thereunder are applicable
to the proposed transactions. Any notes issued by SCS to evidence borrowings by
it as described herein and Interest Rate Hedges and Anticipatory Hedges entered
into by the Retail Operating Companies and SEGCO may be exempt pursuant to Rule
52 under the Act. Other transactions by SCS referred to herein will be in the
routine course of its business and not subject to Commission approval. Southern
considers that the proposed issuance and sale of Common Stock under the Plans
are subject to the provisions of Sections 6(a) and 7 of the Act and Rules 53 and
54 thereunder. Southern considers that any purchases of Common Stock by the
Employing Companies pursuant to the ESOP prior to contributing such stock to the
trust established pursuant to the ESOP are subject to the provisions of Sections
9(a) and 10 of the Act. The proposed transactions will be carried out in
accordance with the procedure specified in Rule 23 and pursuant to an order of
the Commission with respect thereto.
Rule 53 Analysis. The proposed transactions are subject to Rule 54,
which provides that, in determining whether to approve the issue or sale of a
security for purposes of financing the acquisition of an EWG or FUCO as those
terms are defined in sections 32 and 33, respectively, of the Act, the
Commission shall not make certain adverse findings if the conditions set forth
in Rule 53(a)(1) through (a)(4) are met, and are not otherwise made inapplicable
by reason of the existence of any of the circumstances described in Rule 53(b).
Southern currently meets all of the conditions of Rule 53(a). At March
31, 2005, Southern's "aggregate investment," as defined in Rule 53(a)(1), in
EWGs and FUCOs was approximately $265 million, or about 4.59% of Southern's
"consolidated retained earnings," also as defined in Rule 53(a)(1), as of March
31, 2005 ($5.769 billion) (5).
_________________________
NOTE 5
5 Although Southern owns all of the equity in four indirect subsidiaries (EPZ
Lease, Inc., Dutch Gas Lease, Inc., GAMOG Lease, Inc. and NUON Lease, Inc.),
Southern has no direct or indirect investment or any aggregate investment within
the meaning of Rule 53 in these FUCOs, including any direct or indirect
guarantees or credit positions related to any capital or financing leases. (See
Southern's application on Form U-1, File No. 70-9727, for further information.)
Southern has executed limited keep-well commitments whereby Southern would be
required to make capital contributions to SE Finance Capital Corp. II, SE
Finance Capital Corp. or SE Finance Company, Inc. in the event of a shortfall in
the scheduled debt service resulting from certain changes in the payments due
from Southern under the Southern Company Income Tax Allocation Agreement. The
maximum potential capital contribution required under these commitments is the
unamortized balance of the related loans, which totaled approximately $403
million as of March 31, 2005.
With respect to Rule 53(a)(1), however, the Commission has determined
that Southern's financing of investments in EWGs and FUCOs in an amount greater
than the amount that would otherwise be allowed by Rule 53(a)(1) would not have
either of the adverse effects set forth in Rule 53(c). See The Southern Company,
Holding Company Act Release No. 26501, dated April 1, 1996 (the "Rule 53(c)
Order"); and Holding Company Act Release No. 26646, dated January 15, 1997
(order denying request for reconsideration and motion to stay). The Rule 53(c)
Order allows Southern to invest 100% of its consolidated retained earnings in
EWGs and FUCOs.
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,
none of the circumstances described in Rule 53(b) has occurred. Finally, Rule
53(c) is, by its terms, inapplicable since the requirements of paragraphs 53(a)
and 53(b) are satisfied.
Item 4.
No state commission and no federal commission (other than the
Commission) has jurisdiction over the proposed transactions.
Item 5.
Item 5 is restated as follows:
The applicant-declarants hereby request that the Commission's order be
issued as soon as the rules allow. The applicant-declarants hereby waive a
recommended decision by a hearing officer or other responsible officer of the
Commission, consent that the Division of Investment Management may assist in the
preparation of the Commission's decision and/or order in this matter, unless
such Division opposes the transactions proposed herein, and request that there
be no 30-day waiting period between the issuance of the Commission's order and
the date on which it is to become effective.
Item 6.
Item 6(a) is amended to restate the following additional exhibits:
(a) Exhibits
K - Projected Cash Flow Summary of Southern for years
2005-2007 (Filed confidentially pursuant to Rule
104).
L - Projected Capitalization of Southern for years
2005-2007 (Filed confidentially pursuant to Rule
104).
M - Projected Cash Flow Summary of Holdings for years
2005-2007 (Filed confidentially pursuant to Rule
104).
N - Projected Capitalization of Holdings for years
2005-2007 (Filed confidentially pursuant to Rule
104).
O - Summary of Guarantees (Filed confidentially pursuant
to Rule 104).
Item 6(b) is amended and restated as follows:
(b) Financial Statements.
Consolidated balance sheet, consolidated statements of
capitalization, stockholders' equity and comprehensive income
of Southern at March 31, 2005. (Designated in Southern's Form
10-Q for the quarter ended March 31, 2005, File No. 1-3526.)
Statements of income and cash flows of Southern for the
quarter ended March 31, 2005. (Designated in Southern's Form
10-Q for the quarter ended March 31, 2005, File No. 1-3526.)
Balance sheet of Alabama Power Company at March 31, 2005.
(Designated in Alabama Power Company's Form 10-Q for the
quarter ended March 31, 2005, File No. 1-3164.)
Statement of income of Alabama Power Company for the quarter
ended March 31, 2005. (Designated in Alabama Power Company's
Form 10-Q for the quarter ended March 31, 2005, File No.
1-3164.)
Balance sheet of Georgia Power Company at March 31, 2005.
(Designated in Georgia Power Company's Form 10-Q for the
quarter ended March 31, 2005, File No. 1-6468.)
Statement of income of Georgia Power Company for the quarter
ended March 31, 2005. (Designated in Georgia Power Company's
Form 10-Q for the quarter ended March 31, 2005, File No.
1-6468.)
Balance sheet of Gulf Power Company at March 31, 2005.
(Designated in Gulf Power Company's Form 10-Q for the quarter
ended March 31, 2005, File No. 0-2429.)
Statement of income of Gulf Power Company for the quarter
ended March 31, 2005. (Designated in Gulf Power Company's Form
10-Q for the quarter ended March 31, 2005, File No. 0-2429.)
Balance sheet of Mississippi Power Company at March 31, 2005.
(Designated in Mississippi Power Company's Form 10-Q for the
quarter ended March 31, 2005, File No. 001-11229.)
Statement of income of Mississippi Power Company for the
quarter ended March 31, 2005. (Designated in Mississippi Power
Company's Form 10-Q for the quarter ended March 31, 2005, File
No. 001-11229.)
Balance sheet of Savannah Electric and Power Company at March
31, 2005. (Designated in Savannah Electric and Power Company's
Form 10-Q for the quarter ended March 31, 2005, File No.
1-5072.)
Statement of income of Savannah Electric and Power Company for
the quarter ended March 31, 2005. (Designated in Savannah
Electric and Power Company's Form 10-Q for the quarter ended
March 31, 2005, File No. 1-5072.)
Balance sheet of Southern Power Company at March 31, 2005.
(Designated in Southern Power Company's Form 10-Q for the
quarter ended March 31, 2005, File No. 333-98553.)
Statement of income of Southern Power Company for the quarter
ended March 31, 2005 (Designated in Southern Power Company's
Form 10-Q for the quarter ended March 31, 2005, File No.
333-98553.)
Balance sheet of Southern Communications Services, Inc. at
December 31, 2004. (Designated in Southern Communications
Services, Inc.'s U-13-60 for the year ended December 31, 2004,
File No. 49-000159.)
Statement of income of Southern Communications Services, Inc.
for the period ending December 31, 2004. (Designated in
Southern Communications Services, Inc.'s U-13-60 for the year
ended December 31, 2004, File No. 49-000159.)
Balance sheet of Capital Funding at December 31, 2004.
(Designated in Southern's U5S for the year ended December 31,
2004, File No. 070-10203.)
Statement of income of Capital Funding for the period ending
December 31, 2004. (Designated in Southern's U5S for the year
ended December 31, 2004, File No. 070-10203.)
Balance sheet of Southern Company Energy Solutions LLC at
December 31, 2004. (Designated in Southern's U5S for the year
ended December 31, 2004, File No. 070-10203.)
Statement of income of Southern Company Energy Solutions LLC
for the period ending December 31, 2004. (Designated in
Southern's U5S for the year ended December 31, 2004, File No.
070-10203.)
Balance sheet of Southern Company Holdings, Inc. at December
31, 2004. (Designated in Southern's U5S for the year ended
December 31, 2004, File No. 070-10203.)
Statement of income of Southern Company Holdings, Inc. for the
period ending December 31, 2004. (Designated in Southern's U5S
for the year ended December 31, 2004, File No. 070-10203.)
Balance sheet of SCS at December 31, 2004. (Designated in
SCS's U-13-60 for the year ended December 31, 2004, File No.
49-00059.)
Statement of income of SCS for the period ending December 31,
2004. (Designated in SCS's U-13-60 for the year ended December
31, 2004, File No. 49-00059.)
Balance sheet of Southern Nuclear Operating Company, Inc. at
December 31, 2004. (Designated in Southern Nuclear Operating
Company, Inc.'s U-13-60 for the year ended December 31, 2004,
File No. 49-00099.)
Statement of income of Southern Nuclear Operating Company,
Inc. for the period ending December 31, 2004.
(Designated in Southern Nuclear Operating Company,
Inc.'s U-13-60 for the year ended December 31, 2004,
File No. 49-00099.)
Balance sheet of Southern Electric Generating Company of
December 31, 2004. (Designated in Southern's U5S for
the year ended December 31, 2004, File No. 070-10203.)
Statement of income for Southern Electric Generating Company
for the period ending December 31, 2004. (Designated in
Southern's U5S for the year ended December 31, 2004, File No.
070-10203.)
Since March 31, 2005, there have been no material adverse changes, not
in the ordinary course of business, in the financial condition of the
applicant-declarants from that set forth in or contemplated by the foregoing
financial statements.
SIGNATURE
Pursuant to the requirements of the Public Utility Holding Company Act
of 1935, each of the undersigned companies has duly caused this amendment to be
signed on its behalf by the undersigned hereunto duly authorized.
Dated: June 30, 2005 THE SOUTHERN COMPANY
By:/s/ Patricia L. Roberts
Patricia L. Roberts
Assistant Secretary
ALABAMA POWER COMPANY
By: /s/ Wayne Boston
Wayne Boston
Assistant Secretary
GEORGIA POWER COMPANY
By: /s/ Wayne Boston
Wayne Boston
Assistant Secretary
GULF POWER COMPANY
By: /s/ Wayne Boston
Wayne Boston
Assistant Secretary
MISSISSIPPI POWER COMPANY
By:/s/ Wayne Boston
Wayne Boston
Assistant Secretary
SAVANNAH ELECTRIC AND POWER COMPANY
By: /s/ Wayne Boston
Wayne Boston
Assistant Secretary
SOUTHERN POWER COMPANY
By: /s/ Wayne Boston
Wayne Boston
Assistant Secretary
SOUTHERN COMMUNICATIONS SERVICES, INC.
By: /s/ Patricia L. Roberts
Patricia L. Roberts
Secretary
SOUTHERN COMPANY CAPITAL FUNDING, INC.
By: /s/Wayne Boston
Wayne Boston
Assistant Secretary
SOUTHERN COMPANY ENERGY SOLUTIONS, LLC
By: /s/ Patricia L. Roberts
Patricia L. Roberts
Secretary
SOUTHERN COMPANY HOLDINGS, INC.
By:/s/ Patricia L. Roberts
Patricia L. Roberts
Secretary
SOUTHERN NUCLEAR OPERATING COMPANY, INC.
By: /s/ Wayne Boston
Wayne Boston
Assistant Secretary
SOUTHERN COMPANY SERVICES, INC.
By: /s/ Patricia L. Roberts
Patricia L. Roberts
Assistant Secretary
SOUTHERN ELECTRIC GENERATING COMPANY
By: /s/ Wayne Boston
Wayne Boston
Assistant Secretary