(As filed October 25, 2002)
File No. 70-9891
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
--------------------------------------------------------
POS AMC
Post-Effective Amendment No. 1
(Amendment No. 4)
to
APPLICATION OR DECLARATION
UNDER THE
PUBLIC UTILITY HOLDING COMPANY ACT OF 1935
---------------------------------------------------------
ALLIANT ENERGY CORPORATION
ALLIANT ENERGY RESOURCES, INC. AND ITS SUBSIDIARIES
4902 N. Biltmore Lane
Madison, Wisconsin 53718
ALLIANT ENERGY INTEGRATED SERVICES COMPANY AND ITS SUBSIDIARIES
ALLIANT ENERGY INVESTMENTS, INC. AND ITS SUBSIDIARIES
ALLIANT ENERGY TRANSPORTATION, INC. AND ITS SUBSIDIARIES
200 First Street S.E.
Cedar Rapids, Iowa 52401
WHITING PETROLEUM CORPORATION AND ITS SUBSIDIARIES
Mile High Center, Suite 2300
1700 Broadway
Denver, Colorado 80290-2300
(Names of companies filing this statement and
addresses of principal executive offices)
-----------------------------------------------------
ALLIANT ENERGY CORPORATION
(Name of top registered holding company parent)
-----------------------------------------------------
F. J. Buri, Corporate Secretary
Alliant Energy Corporation
4902 N. Biltmore Lane
Madison, Wisconsin 53718
(Name and address of agent for service)
-----------------------------------------------------
The Commission is requested to send copies of all notices, orders and
communications in connection with this Application or Declaration to:
Barbara J. Swan, General Counsel William T. Baker, Jr., Esq.
Alliant Energy Corporation Thelen Reid & Priest LLP
4902 N. Biltmore Lane 40 West 57th Street
Madison, Wisconsin 53718 New York, New York 10019
2
ITEM 1. DESCRIPTION OF PROPOSED TRANSACTION.
-----------------------------------
1.1 Introduction. By order dated October 3, 2001 (Holding Co. Act Release
No. 27448) (the "Prior Order"), Alliant Energy Corporation ("Alliant Energy"), a
registered holding company under the Public Utility Holding Company Act of 1935,
as amended (the "Act"), and certain of its non-utility subsidiaries were
authorized through December 31, 2004 (the "Authorization Period"), to engage in
a program of external long-term financing transactions, to provide guarantees
and other forms of credit support with respect to obligations of subsidiaries of
Alliant Energy, to enter into interest rate hedges, to engage in certain
non-utility energy-related activities, and to engage in certain other related
transactions. The Prior Order also authorized Alliant Energy to invest proceeds
of authorized financing in "exempt wholesale generators" ("EWGs") and "foreign
utility companies" ("FUCOs") in an aggregate amount up to 100% of Alliant
Energy's average consolidated retained earnings.(1)
Alliant Energy's public-utility subsidiaries include Wisconsin Power and
Light Company, South Beloit Water, Gas and Electric Company, and Interstate
Power and Light Company. Together, these companies provide public-utility
service to approximately 940,000 electric and 400,000 retail gas customers in
parts of Wisconsin, Iowa, Minnesota, and Illinois. Alliant Energy also
indirectly holds 26% of the common stock of ATC Management Inc. and a 26%
membership interest in American Transmission Company, LLC, which were formed to
acquire, own and manage the Wisconsin transmission assets of Alliant Energy
certain other Wisconsin electric utility companies. Alliant Energy's direct
non-utility subsidiaries include Alliant Energy Corporate Services, Inc., a
subsidiary service company, and Alliant Energy Resources, Inc. ("AER"), which
serves as the holding company for substantially all of Alliant Energy's
non-utility investments and subsidiaries. AER owns seven principal direct
subsidiaries that engage, directly and indirectly through other subsidiaries, in
(i) providing environmental consulting and engineering services, (ii) the
development, ownership and management of investments in affordable multi-unit
housing properties, (iii) providing various financial services, including the
origination and sale of mortgages for tax-advantaged affordable housing, (iv)
energy-related businesses, including, among others, the brokering and marketing
of electricity and natural gas, gas supply and fuel management services, oil and
gas production, steam production and sale, and energy-management services, (v)
developing, owning and/or operating EWGs and FUCOs, (vi) transportation, and
(vii) management of investments in telecommunications.
Of relevance to this Post-Effective Amendment, the Prior Order specifically
authorized Alliant Energy to issue and sell from time to time during the
Authorization Period, directly or indirectly through one or more financing
subsidiaries, common stock, long-term debt, and preferred stock and other forms
of preferred or equity-linked securities in an aggregate amount at any time
outstanding not to exceed $1.5 billion, subject to the following conditions,
----------
(1) The Prior Order reserved jurisdiction over: (1) Alliant Energy's request to
issue securities that are rated below investment grade, (2) energy marketing
activities outside the United States and Canada, (3) other energy-related
activities outside the United States, and (4) the use by Alliant Energy of
financing proceeds to invest in EWGs and FUCOs in excess of the limit authorized
in the Prior Order.
restrictions, and limitations, among others: (1) the interest rate on long-term
debt and dividend rate on preferred or equity-linked securities may not exceed
at the time of issuance 500 basis points over the yield to maturity of a U.S.
Treasury security having a remaining term equal to the term of such securities,
(2) all preferred and equity-linked securities must be redeemed no later than 50
years after the issuance thereof, and (3) except in accordance with a further
order of the Commission in this proceeding, Alliant Energy will not issue any
long-term debt or preferred stock or other type of preferred or equity-linked
securities unless such securities are rated at the investment grade level as
established by at least one nationally recognized statistical rating
organization ("NRSRO"), as that term is used in paragraphs (c)(2)(vi)(E), (F)
and (H) of Rule 15c3-1 under the Securities Exchange Act of 1934.
Under the Prior Order, Alliant Energy has committed that it will maintain
common equity as a percentage of its consolidated capitalization (inclusive of
short-term debt) at 30% or above during the Authorization Period, and will also
maintain common equity as a percentage of capitalization of each of its
public-utility subsidiaries at 30% or above during the Authorization Period.
1.2 Requested Modifications to the Prior Order. Since the date of the
Prior Order, and particularly in the past few months, the credit markets have
tightened significantly for energy companies in general and electric utilities
and electric utility holding companies in particular. Spreads over U.S. Treasury
securities, which are typically used as the base rate for long-term debt and
other senior securities, have widened dramatically. For example, at the time
that the Prior Order was issued, the spreads over U.S. Treasury securities for a
company of Alliant Energy's credit quality ranged between 165 and 205 basis
points for long-term unsecured holding company debt. Those spreads have widened
in recent weeks to between 190 and 590 basis points, driven by investor concerns
about the utility sector and corporate bonds in general, as well as the impact
of a non-recovering economy on earnings and credit quality. The broadening range
of credit spreads for similarly rated issuers reflects increasing concentration
on individual issuer differentiation and illustrates the increasing volatility
of credit spreads. Thus, the current maximum interest rate and dividend spread
of 500 basis points, as authorized under the Prior Order, may limit Alliant
Energy's ability to access capital markets at a time when it is most critical to
do so. In this regard, recent orders issued to other registered holding
companies have provided greater flexibility to issue long-term debt and
preferred securities having higher spreads over U.S. Treasury securities, so
long as the rates are consistent with interest rates on similar securities of
comparable credit quality and maturities issued by other companies.2
The Prior Order also requires that any preferred stock or other preferred
securities issued by Alliant Energy be redeemed not later that 50 years after
issuance. More recent orders have allowed preferred stocks that are
----------
(2) See e.g., Reliant Energy, Inc., et al., Holding Co. Act Release No. 27548
(July 5, 2002) and Pepco Holdings Inc., et al., Holding Co. Act Release No.
27557 (July 31, 2002). Each company is authorized to issue long-term debt and
preferred securities having interest or dividend rates not to exceed the greater
of (i) 500 basis points over the comparable term U.S. Treasury securities or
(ii) a gross spread over U.S. Treasuries that is consistent with similar
securities of comparable credit quality and maturities issued by other
companies.
-2-
perpetual.(3) Finally, the Prior Order specifies that Alliant Energy may not
issue any long-term debt securities or preferred stock or other types of
preferred or equity-linked securities without further authorization of the
Commission unless such securities have been rated investment grade by at least
one NRSRO. In more recent orders, this requirement has been limited to
publicly-issued senior securities or to senior securities for which a rating has
in fact been obtained.(4)
Accordingly, in order to have greater flexibility in issuing long-term
senior securities and to conform the Prior Order in certain respects to more
recent orders that the Commission has issued, Alliant Energy hereby requests
that the Commission issue a supplemental order approving the following
modifications to the terms of the Prior Order:
(i) The interest rate on long-term debt securities issued by Alliant Energy
may not exceed at the time of issuance the greater of (i) 500 basis points over
the yield to maturity of comparable term U.S. Treasury securities or (ii) a
gross spread over U.S. Treasury securities that is consistent with similar
securities of comparable credit quality and maturities issued by other
companies.
(ii) The dividend or distribution rate on preferred stock or other
preferred or equity-linked securities issued by Alliant Energy may not exceed at
the time of issuance the greater of (i) 500 basis points over the yield to
maturity of comparable term U.S. Treasury securities or (ii) a gross spread over
U.S. Treasury securities that is consistent with similar securities of
comparable credit quality and maturities issued by other companies.
(iii) Preferred stock or other preferred securities issued by Alliant
Energy may be redeemable or perpetual in duration.
(iv) Without further order of the Commission, Alliant Energy will not
publicly issue any long-term debt securities, preferred stock or other types of
preferred or equity-linked securities unless such securities are rated as
investment grade by at least one NRSRO.
Except as specified immediately above, no other changes or modifications in
the terms, conditions or limitations imposed under the Prior Order are requested
herein. Without limiting the foregoing, Alliant Energy commits that it will
maintain common equity as a percentage of its consolidated capitalization
(inclusive of short-term debt) at 30% or above during the Authorization Period,
and will also maintain common equity as a percentage of capitalization of each
of its public-utility subsidiaries at 30% or above during the Authorization
Period.
----------
(3) Id.
(4) Id. Also see American Electric Power Company, Inc., Holding Co. Act Release
No. 27517 (Apr. 11, 2002).
-3-
ITEM 2. FEES, COMMISSIONS AND EXPENSES.
------------------------------
The additional fees, commissions and expenses paid or incurred in
connection with this Post-Effective Amendment will not exceed $2,000.
ITEM 3. APPLICABLE STATUTORY PROVISIONS.
-------------------------------
Sections 6(a) and 7 of the Act are applicable to the modifications to the
Prior Order that are requested by this Post-Effective Amendment.
The proposed transactions are also subject to the requirements of Rules 53
and 54. Under Rule 53, in determining whether to approve the issue or sale of
any security (including any guarantee) by a registered holding company for the
purpose of financing the acquisition of any EWG, the Commission may not make
certain adverse findings under Sections 7 and 12 of the Act if the conditions
set forth in paragraphs (a), (b) and (c) of Rule 53 are satisfied. Rule 54
provides that in determining whether to approve the issue or sale of a security
by a registered holding company for purposes other than the acquisition of an
EWG or FUCO, or other transactions by such registered holding company or its
subsidiaries other than with respect to EWGs or FUCOs, the Commission shall not
consider the effect of the capitalization or earnings of any subsidiary which is
an EWG or a FUCO upon the registered holding company if paragraphs (a), (b) and
(c) of Rule 53 are satisfied.
Alliant Energy currently does not meet all of the conditions of Rule 53(a).
As of June 30, 2002, Alliant Energy's "aggregate investment," as defined in Rule
53(a)(1), in EWGs and FUCOs was approximately $537 million, or approximately 67%
of Alliant Energy's average "consolidated retained earnings," also as defined in
Rule 53(a)(1), for the four quarters ended June 30, 2002 ($801 million), which
exceeds the 50% "safe harbor" limitation contained in Rule 53(a). However, under
the Prior Order, the Commission has authorized Alliant Energy to increase its
"aggregate investment" in EWGs and FUCOs to an amount equal to 100% of Alliant
Energy's average "consolidated retained earnings." Therefore, although Alliant
Energy's "aggregate investment" in EWGs and FUCOs currently exceeds the 50%
"safe harbor" limitation, this investment level is permitted under the Prior
Order.
In any event, even taking into account the capitalization of and earnings
from EWGs and FUCOs in which Alliant Energy has an interest, there would be no
basis for withholding approval of the proposed transaction. With regard to
capitalization, since the issuance of the Prior Order, there has been no
material adverse impact on Alliant Energy's consolidated capitalization
resulting from Alliant Energy's investments in EWGs and FUCOs. At June 30, 2002,
Alliant Energy's consolidated capitalization consisted of 37.0% common equity,
2.3% preferred stock, 54.3% long-term debt (including variable rate demand bonds
classified as current), and 6.4% short-term debt (including current maturities
of long-term debt), versus 36.3% common equity, 2.6% preferred stock, 51.2%
long-term debt (including variable rate demand bonds classified as current), and
9.9% short-term debt (including current maturities of long-term debt) at
September 30, 2001 (the end of the quarter immediately preceding issuance of the
Prior Order). These ratios are within acceptable industry ranges. The proposed
transactions will not have any material impact on capitalization. Further, since
-4-
the date of the Prior Order, there has been no material change in Alliant
Energy's level of earnings from EWGs and FUCOs.
Alliant Energy satisfies all of the other conditions of paragraphs (a) and
(b) of Rule 53. With reference to Rule 53(a)(2), Alliant Energy maintains books
and records in conformity with, and otherwise adheres to, the requirements
thereof. With reference to Rule 53(a)(3), no more than 2% of the employees of
Alliant Energy's domestic public utility companies render services, at any one
time, directly or indirectly, to EWGs or FUCOs in which Alliant Energy directly
or indirectly holds an interest. With reference to Rule 53(a)(4), Alliant Energy
will continue to provide a copy of each application and certificate relating to
EWGs and FUCOs and relevant portions of its Form U5S to each regulator referred
to therein, and will otherwise comply with the requirements thereof concerning
the furnishing of information. In addition, none of the adverse conditions
specified in Rule 53(b) exists.
ITEM 4. REGULATORY APPROVALS.
--------------------
No state commission, and no federal commission, other than the Commission,
has jurisdiction over the proposed transactions.
ITEM 5. PROCEDURE.
---------
The Commission is requested to publish a notice under Rule 23 with respect
to the filing of this Post-Effective Amendment as soon as practicable. Alliant
Energy requests that the Commission's order be issued as soon as the rules
allow, and that there should not be a 30-day waiting period between issuance of
the Commission's order and the date on which the order is to become effective.
Alliant Energy hereby waives a recommended decision by a hearing officer or any
other responsible officer of the Commission and consents that the Division of
Investment Management may assist in the preparation of the Commission's decision
and/or order, unless the Division opposes the matters proposed herein. Alliant
Energy requests that the Commission continue its reservation of jurisdiction
over the matters listed in the next to last paragraph of the Prior Order, as
modified, with respect to the investment grade rating commitment, by the order
issued in this proceeding.
ITEM 6. EXHIBITS AND FINANCIAL STATEMENTS.
---------------------------------
A. EXHIBITS.
--------
The following additional exhibit is filed as part of this Post-Effective
Amendment:
G-1 Proposed Form of Federal Register Notice.
-5-
B. FINANCIAL STATEMENTS.
--------------------
FS-1 Balance Sheet of Alliant Energy and consolidated subsidiaries,
as of December 31, 2001 (incorporated by reference to the Annual
Report on Form 10-K of Alliant Energy for the year ended
December 31, 2001) (File No. 1-9894).
FS-2 Statements of Income of Alliant Energy and consolidated
subsidiaries for the twelve months ended December 31, 2001
(incorporated by reference to the Annual Report on Form 10-K of
Alliant Energy for the period ended December 31, 2001) (File No.
1-9894).
FS-3 Balance Sheet of Alliant Energy and consolidated subsidiaries,
as of June 30, 2002 (incorporated by reference to the Quarterly
Report on Form 10-Q of Alliant Energy for the quarter ended June
30, 2002) (File No. 1-9894).
FS-4 Statements of Income of Alliant Energy and consolidated
subsidiaries for the six months ended June 30, 2002
(incorporated by reference to the Quarterly Report on Form 10-Q
of Alliant Energy for the quarter ended June 30, 2002) (File No.
1-9894).
ITEM 7. INFORMATION AS TO ENVIRONMENTAL EFFECTS.
---------------------------------------
None of the matters that are the subject of this Post-Effective Amendment
involves a "major federal action" nor does it "significantly affect the quality
of the human environment" as those terms are used in section 102(2)(C) of the
National Environmental Policy Act. The transactions that are the subject of this
Post-Effective Amendment will not result in changes in the operation of the
applicants that will have an impact on the environment. The applicants are not
aware of any federal agency that has prepared or is preparing an environmental
impact statement with respect to the transactions that are the subject of this
Post-Effective Amendment.
-6-
SIGNATURES
Pursuant to the requirements of the Public Utility Holding Company Act of
1935, as amended, the undersigned companies have duly caused this Post-Effective
Amendment filed herein to be signed on their behalves by the undersigned
thereunto duly authorized.
ALLIANT ENERGY CORPORATION
ALLIANT ENERGY RESOURCES, INC.
By: /s/ F. J. Buri
----------
Name: F. J. Buri
Title: Corporate Secretary
ALLIANT ENERGY INTEGRATED SERVICES
COMPANY
ALLIANT ENERGY INVESTMENTS, INC.
ALLIANT ENERGY TRANSPORTATION, INC.
By: /s/ F. J. Buri
----------
Name: F. J. Buri
Title: Secretary
WHITING PETROLEUM CORPORATION
By: /s/ F. J. Buri
----------
Name: F. J. Buri
Title: Assistant Secretary
Date: October 25, 2002
-7-