(As filed June 21, 2002)
File No. 70-10052
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM U-1/A
Amendment No. 2
to
APPLICATION OR DECLARATION
UNDER THE
PUBLIC UTILITY HOLDING COMPANY ACT OF 1935
ALLIANT ENERGY CORPORATION
ALLIANT ENERGY CORPORATE SERVICES, INC.
ALLIANT ENERGY RESOURCES, INC.
ENERGYS, INC.
ALLIANT ENERGY GENERATION, INC.
HEARTLAND PROPERTIES, INC.
CAPITAL SQUARE FINANCIAL CORPORATION
HEARTLAND ENERGY GROUP, INC.
HEARTLAND ENERGY SERVICES, INC.
4902 N. Biltmore Lane
Madison, Wisconsin 53718
INTERSTATE POWER AND LIGHT COMPANY
ALLIANT ENERGY TRANSPORTATION, INC.
ALLIANT ENERGY INVESTMENTS, INC.
IOWA LAND AND BUILDING COMPANY
ALLIANT ENERGY INTERNATIONAL, INC.
ALLIANT ENERGY INTEGRATED SERVICES COMPANY
ALLIANT ENERGY INTEGRATED SERVICES-ENERGY MANAGEMENT LLC
ALLIANT ENERGY INTEGRATED SERVICES-ENERGY SOLUTIONS LLC
IOWA LAND AND BUILDING COMPANY
PRAIRIE RIDGE BUSINESS PARK, L.C.
TRANSFER SERVICES, INC.
WILLIAMS BULK TRANSFER INC.
Alliant Tower
200 First Street S.E.
Cedar Rapids, Iowa 52401
ALLIANT ENERGY FIELD SERVICES, LLC
5033 A Tangle Lane
Houston, Texas 77056
CEDAR RAPIDS AND IOWA CITY RAILWAY COMPANY
2330 12th Street, SW
Cedar Rapids, Iowa 52404
COGENEX CORPORATION
Boott Mills South, 100 Foot of John St.
Lowell, Massachusetts 01852
ENERGY PERFORMANCE SERVICES, INC.
INDUSTRIAL ENERGY APPLICATIONS, INC.
201 Third Avenue SE, Suite 300
Cedar Rapids, Iowa 52406
IEI BARGE SERVICES, INC.
18525 Hwy 20 West
East Dubuque, Illinois 61025
INDUSTRIAL ENERGY APPLICATIONS DELAWARE INC.
5925 Dry Creek Lane, NE
Cedar Rapids, Iowa 52402
RMT, INC.
744 Heartland Trail
Madison, Wisconsin 53717
SCHEDIN & ASSOCIATES, INC.
920 Plymouth Building
12 South Sixth Street
Minneapolis, Minnesota 55401
SVBK CONSULTING GROUP, INC.
37 N. Orange Ave., Suite 710
Orlando, Florida 32801
WHITING PETROLEUM CORPORATION
Mile High Center, Suite 2300
1700 Broadway
Denver, Colorado 80290
(Names of companies filing this statement and addresses of
principal executive offices)
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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
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The Application or Declaration filed in this proceeding on February 11,
2002, which was amended and restated in its entirety by Amendment No. 1, dated
March 22, 2002, is hereby further amended and restated in its entirety to read
as follows:
ITEM 1. DESCRIPTION OF PROPOSED TRANSACTION.
------------------------------------
A. Background. Alliant Energy Corporation ("Alliant Energy") is a
registered holding company under the Public Utility Holding Company Act of 1935
(the "Act"). Its direct wholly-owned public utility subsidiaries are: Interstate
Power and Light Company (formerly IES Utilities Inc.)(1) ("IP&L") and Wisconsin
Power and Light Company ("WP&L").(2) These companies provide electric and gas
utility service to customers in parts of Wisconsin, Iowa, Minnesota and
Illinois.
All of the other applicants named herein (that is, the applicants other
than Alliant Energy and IP&L) are non-utility subsidiaries that, with one
exception (which is noted below), are directly or indirectly wholly-owned by
Alliant Energy. They are more particularly described as follows:
Alliant Energy Corporate Services, Inc. ("Alliant Services"), a
subsidiary service company, and Alliant Energy Resources, Inc. ("AER"), which
serves as the non-utility holding company for substantially all of Alliant
Energy's non-utility investments and subsidiaries, are direct subsidiaries of
Alliant Energy.
The applicants include seven direct subsidiaries of AER, as follows:
1. Alliant Energy Integrated Services Company ("Integrated Services"),
which directly and through subsidiaries of its own, provides environmental
consulting and engineering services, produces and sells steam, and provides
energy-management services, including energy performance testing. Twelve of
Integrated Services' subsidiaries are named applicants herein: Industrial Energy
Applications, Inc., Heartland Energy Group, Inc., RMT, Inc., Alliant Energy
Integrated Services - Energy Solutions LLC, Alliant Energy Integrated Services -
Energy Management LLC, Cogenex Corporation, Energy Performance Services, Inc.,
Energys, Inc., Alliant Energy Field Services, LLC, Industrial Energy
Applications Delaware, Inc., Schedin & Associates, Inc., and SVBK Consulting
Group, Inc.
-------------------
(1) By order dated October 24, 2001 (Holding Co. Act Release No. 27456), the
Commission approved the merger of Interstate Power Company ("IPC"), which,
at that time, was also a direct wholly-owned subsidiary of Alliant Energy,
and IES Utilities Inc. ("IES"), with IES as the surviving company. The
merger of IPC into IES was effective as of January 1, 2002, and, in
connection therewith, IES changed its name to Interstate Power and Light
Company.
(2) WP&L owns all of the issued and outstanding common stock of South Beloit
Water, Gas & Electric Company.
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2. Alliant Energy Investments, Inc. ("Alliant Energy Investments"), a
non-utility holding company that engages through subsidiaries in, among other
businesses, the development, ownership and management of investments in
affordable multi-unit housing properties, holding real estate for future
development of utility-related assets, and other passive investments in land.
Four of Alliant Energy Investments' subsidiaries are named applicants herein:
Heartland Properties, Inc., Heartland Energy Services, Inc., Iowa Land and
Building Company, and Prairie Ridge Business Park, L.C. (Note: Prairie Ridge
Business Park, L.C. is a 70% owned subsidiary. The remaining interest is held by
an unaffiliated third party.)
3. Alliant Energy Transportation, Inc. ("Alliant Energy
Transportation"), a non-utility holding company that engages through
subsidiaries in rail transportation, river barge terminal and hauling
activities, and related warehousing activities. Four subsidiaries of Alliant
Energy Transportation are named applicants herein: Transfer Services, Inc.,
Cedar Rapids and Iowa City Railway Corporation, Williams Bulk Transfer Inc., and
IEI Barge Services, Inc.
4. Capital Square Financial Corporation, which provides various
financial services, including the origination and sale of mortgages for
tax-advantaged affordable housing.
5. Alliant Energy Generation, Inc., which is an intermediate
subsidiary formed to develop and invest in "exempt wholesale generators"
("EWGs"), as defined under Section 32 of the Act, and other unregulated domestic
generation projects.
6. Alliant Energy International, Inc., which develops and holds
investments in "foreign utility companies" ("FUCOs"), as defined under Section
33 of the Act.
7. Whiting Petroleum Corporation, which directly and through
investments in partnerships engages in oil and gas development and production.
AER and its direct and indirect non-utility subsidiaries named above
are herein referred to as the "Non-Utility Subsidiaries."
B. Current Short-term Debt/Money Pool Authorization. By order dated
December 18, 1998 in File No. 70-9317 (Holding Co. Act Release No. 26956), as
modified and extended by order dated December 15, 2000 (Holding Co. Act Release
No. 27304) (as so modified and extended, the "Current Money Pool Order"),
Alliant Energy is authorized to issue notes and/or commercial paper from time to
time through June 30, 2004, and to fund separate money pools for intrasystem
borrowings by certain of its utility subsidiaries and Alliant Services and by
the Non-Utility Subsidiaries. Specifically, Alliant Energy is authorized to
issue and sell notes and/or commercial paper in an aggregate principal amount at
any time outstanding not to exceed $1 billion and to utilize the proceeds of
such borrowings to make loans through the system utility money pool ("Utility
Money Pool") to IP&L, WP&L and Alliant Services in an aggregate amount not to
exceed $475 million in 2001 and $525 million through the remainder of the
authorization period, and for other corporate purposes, including, among others,
funding of temporary investments in EWGs and FUCOs. At March 31, 2002, Alliant
Energy had issued and outstanding $47.2 million of commercial paper notes.
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Alliant Energy is also authorized under the Current Money Pool Order to
provide guarantees or enter into expense agreements or otherwise provide credit
support in an amount not to exceed $600 million at any time outstanding in order
to support a separate commercial paper program established by AER, which is used
to fund the Alliant Energy system non-utility money pool ("Non-Utility Money
Pool").
Under the terms of the Current Money Pool Order, Alliant Energy is
authorized to issue commercial paper in denominations of not less than $100,000
to dealers at rates not to exceed the rate per annum prevailing at the time of
issuance for commercial paper of comparable qualities and maturities. Alliant
Energy may also issue commercial paper to institutions if the resulting cost of
money would be equal to or less than that available from dealer-placed
commercial paper or bank borrowings. Commercial paper notes may have maturities
of up to 270 days and must be rated at least A-1 by Standard & Poor's ("S&P") or
at least P-1 by Moody's Investor Services ("Moody's"). Borrowings by Alliant
Energy from banks may bear interest at a rate no higher than the effective cost
of money for unsecured prime commercial bank loans prevailing at the date of
borrowing.
Under the Current Money Pool Order, as modified by the Commission's
order approving the merger of IPC into IES,(3) IP&L is authorized to borrow up
to $250 million at any one time outstanding under the Utility Money Pool.
Borrowings by WP&L and Alliant Services under the Utility Money Pool are exempt
pursuant to Rule 52(a) in the case of WP&L and Rule 52(b) in the case of Alliant
Services. WP&L's participation in the Utility Money Pool as a borrower but not
as a lender has been approved by the Public Service Commission of Wisconsin
("PSCW").(4)
At March 31, 2002, the outstanding borrowings under the Utility Money
Pool by WP&L, IP&L and Alliant Services were $56.2 million, $29.2 million, and
$67.5 million, respectively. The effective cost of funds borrowed under the
Utility Money Pool is currently 2.25.
As indicated, AER has established a separate commercial paper program
and bank credit facilities totaling $600 million, which are used to fund loans
under the Non-Utility Money Pool to the participating Non-Utility Subsidiaries
(as listed in Item 1.F, below). Alliant Energy currently guarantees all
commercial paper notes issued by AER, as well as borrowings under the bank
credit facilities maintained by AER.(5) At March 31, 2002, AER had issued and
outstanding $468.7 million of commercial paper notes.
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(3) See n. 1, above.
(4) WP&L is currently authorized by the PSCW to make short-term borrowings under
the Utility Money Pool in an aggregate principal amount outstanding at any
one time not to exceed $240 million. Under Wisconsin law, WP&L is prohibited
from making any loan to any affiliate, including any loan of surplus funds
through a system money pool arrangement.
(5) The Commission noted in the Current Money Pool Order that Rule 52 exempts
AER's financing arrangements that comply with its terms.
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C. Specific Authorizations Requested. In this Application or
Declaration, the applicants seek to restate, modify and extend their
authorization under the Current Money Pool Order for the period through
December 31, 2004 ("Authorization Period"). Specifically, authorization is
requested for each of the following proposed transactions:
1. Alliant Energy requests authority to issue and sell from time to
time commercial paper to dealers and notes and other forms of
short-term indebtedness to banks and other institutional lenders
("Short-term Debt") in an aggregate principal amount at any time
outstanding not to exceed $1 billion (its current authorization) and to
utilize the proceeds thereof to fund loans to IP&L and Alliant Services
through the Utility Money Pool and to AER and the other participating
Non-Utility Subsidiaries through the Non-Utility Money Pool, and for
other corporate purposes, including funding of investments in EWGs and
FUCOs. WP&L intends to terminate its participation in the Utility Money
Pool and is therefore not an applicant in this proceeding.
2. IP&L requests authorization to issue and sell Short-term Debt in a
principal amount which, when added to the principal amount of any
borrowings by IP&L under the Utility Money Pool, will not at any time
exceed $300 million. To the extent required, the Utility Money Pool
participants request authorization to make loans and extend credit to
each other under the Utility Money Pool.(6)
3. Alliant Energy seeks to have the flexibility to either guarantee
borrowings by AER to fund the Non-Utility Money Pool, as is currently
the case, or to make direct loans to the Non-Utility Money Pool.
Accordingly, as an alternative to making direct loans to the
Non-Utility Money Pool, Alliant Energy requests authorization to
guarantee borrowings by AER in an aggregate amount not to exceed $700
million at any time outstanding to fund loans to Non-Utility
Subsidiaries through the Non-Utility Money Pool.(7)
4. Alliant Energy, on behalf of itself and its participating Utility
and Non-Utility Subsidiaries, proposes to maintain and continue the
operation of the Utility Money Pool and the Non-Utility Money Pool,
with certain changes described below.
Upon the effective date of the Commission's final order in this
proceeding, the applicants will relinquish their authority under the Current
Money Pool Order, as modified by the terms of the Commission's October 24, 2001
order approving the merger of IPC into IES.
-------------------
(6) Borrowings by and extensions of credit to Alliant Services under the Utility
Money Pool to finance the existing business of Alliant Services will be
exempt pursuant to Rules 52 and 45(b)(1).
(7) The guaranty authority requested herein is in addition to the guaranty
authority that Alliant Energy has obtained in File No. 70-9891 (Holding Co.
Act Release No. 27448, Oct. 3, 2001).
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D. Reasons for Proposed Changes in Short-term Borrowing Arrangements.
Under the Current Money Pool Order, short-term borrowings and/or commercial
paper sales by Alliant Energy represent the only source of external funds that
are available for short-term borrowings by IP&L, WP&L and Alliant Services; none
of these companies currently maintains any external short-term credit
facilities, and IP&L has no authority under the Current Money Pool Order to
incur short-term indebtedness, other than through the Utility Money Pool.(8)
Until recently, Alliant Energy's commercial paper was rated A-1 by S&P and P-1
by Moody's. Thus, Alliant Energy's effective cost of funds was equal to or lower
than the effective cost of funds that any of the Utility Money Pool participants
could have obtained on its own by issuing commercial paper and other forms of
short-term notes to lenders other than Alliant Energy. Alliant Energy and the
other Utility Money Pool participants were also able to realize administrative
cost reductions by consolidating all short-term borrowing arrangements at the
Alliant Energy level. Recently, however, Alliant Energy's commercial paper was
downgraded to A-2 by S&P and to P-2 by Moody's. Under the Current Money Pool
Order, Alliant Energy is not authorized to issue commercial paper unless it is
rated at least A-1 by S&P or at least P-1 by Moody's. Thus, without the relief
requested herein, Alliant Energy is effectively foreclosed from issuing
commercial paper in amounts exceeding that permitted by Section 6(b) of the Act,
even though commercial paper rated A-2/P-2 continues to represent Alliant
Energy's lowest cost short-term borrowing option.(9)
Furthermore, with the downgrading of its commercial paper rating,
Alliant Energy has determined that IP&L and WP&L may have the ability to issue
commercial paper or other forms of short-term debt at a lower effective cost
than Alliant Energy. Accordingly, as described below, IP&L is seeking authority
in this proceeding to issue Short-term Debt directly when such borrowings would
have a lower effective cost than borrowings under the Utility Money Pool. Also,
because of the downgrading in Alliant Energy's commercial paper, it is not
possible at the current time for WP&L to participate in the Utility Money Pool
as a borrower.(10) WP&L will therefore establish its own external short-term
funding arrangements and terminate its participation in the Utility Money
Pool.(11) Nevertheless, Alliant Energy wishes to maintain and fund two separate
money pools such that, in the event Alliant Energy's commercial paper rating is
-------------------
(8) Although external borrowings by WP&L and Alliant Services would be exempt
under Rule 52, both companies currently satisfy all of their requirements
for short-term indebtedness through borrowings under the Utility Money Pool.
(9) Since December 1, 2001, Alliant Energy has relied upon the exemption
afforded by Section 6(b) of the Act to issue commercial paper.
(10) As previously noted, Wisconsin law prohibits WP&L from extending credit to
any affiliate, through a money pool or otherwise. In addition, the PSCW's
approval for WP&L to participate in the Utility Money Pool as a borrower was
originally conditioned upon Alliant Energy having an A-1/P-1 rating for its
commercial paper and maintaining completely segregated external funding
arrangements for the Utility Money Pool and the Non-Utility Money Pool.
Since Alliant Energy's commercial paper is no longer rated A-1/P-1, there is
no choice but to have WP&L obtain its own external sources of short-term
debt.
(11) External short-term borrowings by WP&L will be exempt under Rule 52(a) to
the extent approved by the PSCW.
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restored to A-1/P-1, the current Utility Money Pool structure could be restored
(i.e., with WP&L as a participating Utility Money Pool borrower), subject to
receipt of any necessary regulatory approvals.
E. Description of Short-term Debt. Alliant Energy and IP&L propose to
issue and sell from time to time Short-term Debt in the form of commercial paper
notes, bank notes, and other forms of short-term indebtedness. All Short-term
Debt will have maturities of less than one year from the date of issuance.
Alliant Energy requests authority to issue up to $1.0 billion of Short-term Debt
at any time outstanding, and IP&L requests authorization to issue Short-term
Debt and/or incur borrowings under the Utility Money Pool in an aggregate
principal amount at any time outstanding not to exceed $300 million.
Alliant Energy proposes to use up to $350 million of the proceeds of
Short-term Debt at any one time outstanding to make loans to IP&L and Alliant
Services through the Utility Money Pool and up to $700 million at any one time
outstanding to make loans to the Non-Utility Subsidiaries through the
Non-Utility Money Pool. IP&L also proposes to utilize proceeds of Short-term
Debt to make advances to the Utility Money Pool, but only to the extent that
such borrowing capacity is not required by IP&L in order to satisfy its own
needs.
Commercial paper may be sold in established domestic or European
commercial paper markets. Such commercial paper would typically be sold to
dealers at the discount rate per annum prevailing at the date of issuance for
commercial paper of comparable quality and maturities sold to commercial paper
dealers generally. It is expected that the dealers acquiring such commercial
paper will reoffer it at a discount to corporate, institutional and, with
respect to European commercial paper, individual investors. It is anticipated
that such commercial paper will be reoffered to investors such as commercial
banks, insurance companies, pension funds, investment trusts, foundations,
colleges and universities, finance companies and nonfinancial corporations.
Commercial paper issued by Alliant Energy and IP&L will be rated investment
grade by S&P or Moody's.
Alliant Energy and IP&L may also establish and maintain back-up credit
lines with banks or other institutional lenders to support their commercial
paper program(s) and other credit arrangements and/or borrowing facilities
generally available to borrowers with comparable credit ratings as they may deem
appropriate in light of their needs and existing market conditions providing for
revolving credit or other loans and having commitment periods not longer than
the Authorization Period. Only the amounts drawn and outstanding under these
agreements and facilities will be counted against the proposed limits on
Short-term Debt.
The effective cost of money on all Short-term Debt will not exceed at
the time of issuance 300 basis points over the London Interbank Offered Rate
("LIBOR") for maturities of one year or less.
Alliant Energy represents 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 (inclusive of Short-term Debt) of WP&L
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and IP&L at 30% or above during the Authorization Period. As indicated, at
March 31, 2002, Alliant Energy had issued and outstanding $47.2 million of
Short-term Debt in the form of commercial paper notes. At March 31, 2002,
Alliant Energy's consolidated capitalization consisted of 39.2% common equity,
2.4% preferred stock, 54% long-term debt and 4% Short-term Debt. If the full
amount of short-term borrowings for which authority is sought in this proceeding
($1 billion) were outstanding on such date, Alliant Energy's common equity as a
percentage of consolidated capitalization (inclusive of Short-term Debt) would
be 33.1%.
F. Operation of Money Pools.
------------------------
1. Utility Money Pool. Alliant Energy, IP&L and Alliant Services
will continue to participate in the Utility Money Pool, which will be operated
and administered by Alliant Services in the same manner in which it now is, with
the exception that funds made available to the Utility Money Pool from external
sources may be derived from external borrowings by Alliant Energy or IP&L, or
both. Filed herewith as Exhibit B-1 is a copy of the proposed Amended and
Restated Utility Money Pool Agreement, which incorporates this alternative
funding option.
Under the proposed terms of the Amended and Restated Utility Money Pool
Agreement, funds would be available from the following sources for short-term
loans to the Utility Money Pool participants (other than Alliant Energy) from
time to time: (1) surplus funds in the treasuries of any of the Utility Money
Pool participants ("Internal Funds"), and (2) proceeds received by any of the
Utility Money Pool participants from the issuance of Short-term Debt ("External
Funds"), in each case to the extent permitted by applicable laws and regulatory
orders. Funds would be made available from such sources in such order as Alliant
Services, as the administrator of the Utility Money Pool, may determine would
result in a lower cost of borrowing, consistent with the individual borrowing
needs and financial standing of Utility Money Pool participants that invest
funds in the Utility Money Pool.
Each Utility Money Pool participant that is authorized or permitted to
borrow from the Utility Money Pool would borrow pro rata from each Utility Money
Pool participant that advances funds to the Utility Money Pool in the proportion
that the total amount advanced by such participant bears to the total amount
then advanced to the Utility Money Pool by all participants. On any day when
more than one source of funds (i.e., both Internal Funds and External Funds),
with different rates of interest, are used to fund loans through the Utility
Money Pool, each borrowing participant would borrow pro rata from each such
funding source in the same proportion that the amount of funds provided by that
funding source bears to the total amount of funds advanced to the Utility Money
Pool.
The cost of compensating balances, if any, and fees paid to banks to
maintain credit lines and accounts by Alliant Energy or IP&L that are used to
fund loans to the Utility Money Pool would initially be paid by the party
maintaining such credit lines and accounts. These costs would be retroactively
allocated every month among the Utility Money Pool borrowers in proportion to
each such borrowers' estimated peak short-term borrowing requirements.
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The daily outstanding balance of all loans to the Utility Money Pool
participants shall accrue interest as follows: (a) if only Internal Funds
comprise the daily outstanding balance of all loans outstanding during a
calendar month, the interest rate applicable to such daily balances shall be the
average for the month of the CD yield equivalent of the 30-day Federal Reserve
"AA" Industrial Commercial Paper Composite Rate (the daily rate, "Composite,"
and the monthly average of such Composite, the "Average Composite"), or, if no
such Composite was established for that particular day, then the applicable rate
would be the Composite for the next preceding day for which such Composite was
established, and (b) if only External Funds comprise the daily outstanding
balance of all loans outstanding during a calendar month, the interest rate
applicable to such daily outstanding balance shall be the lending participant's
cost for such External Funds or, if more than one participant had made available
External Funds at any time during the month, the applicable interest rate shall
be a composite rate, equal to the weighted average of the costs incurred by the
respective participants for such External Funds. In cases where the daily
outstanding balances of all loans outstanding at any time during the month
include both Internal Funds and External Funds, the interest rate applicable to
the daily outstanding balances for the month shall be the weighted average of
the (i) cost of all Internal Funds contributed by participants, and (ii) the
cost of all such External Funds. The interest rate paid on funds advanced to the
Utility Money Pool by any participant will be equal to the cost of borrowing
from the Utility Money Pool. That is, the applicable rate would be the Composite
rate in the case of Internal Funds, the lending company's cost of borrowing in
the case of External Funds, and a weighted average cost of funds if funds
advanced to the Utility Money Pool at any one time consist of both Internal
Funds and External Funds.
Funds not required by the Utility Money Pool participants to make loans
(with the exception of funds required to satisfy the Utility Money Pool's
liquidity requirements) will be invested in one or more short-term investments:
(i) interest-bearing accounts with banks; (ii) obligations issued or guaranteed
by the U.S. government and/or its agencies and instrumentalities, including
obligations under repurchase agreements; (iv) commercial paper rated not less
than A-1 by S&P or P-1 by Moody's, or their equivalent by a nationally
recognized rating agency; (iii) obligations issued or guaranteed by any state or
political subdivision thereof, provided that such obligations are rated not less
than "A" by a nationally recognized rating agency; (iv) bankers' acceptances;
(v) money market funds; (vi) bank certificates of deposit; (vii) Eurodollar
funds; and (viii) such other investments as are permitted by Section 9(c) of the
Act and Rule 40 thereunder.
Any income earned on investments of surplus funds would be allocated at
the end of each calendar month among those Utility Money Pool participants that
have invested funds in accordance with the proportion that each participant's
average contribution of funds in the Utility Money Pool for the month bears to
the total amount of funds invested in the Utility Money Pool for the month.
Each participant receiving a loan through the Utility Money Pool would
be required to repay the principal amount of such loan, together with all
interest accrued thereon, on demand and in any event within 365 days of the date
of such loan. All loans made through the Utility Money Pool may be prepaid by
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the borrower without premium or penalty and without prior notice. No loans
through the Utility Money Pool would be made to, and no borrowings through the
Utility Money Pool would be made by, Alliant Energy.
2. Non-Utility Money Pool. The Non-Utility Money Pool will continue to
be operated on the same terms and conditions as the Utility Money Pool, except
that, as indicated above, instead of guaranteeing a separate commercial paper
facility maintained by AER to fund the Non-Utility Money Pool, Alliant Energy
intends for the foreseeable future to directly fund the Non-Utility Money with
up to $700 million of proceeds of commercial paper and other short-term
borrowings. This will enable AER to terminate its separate commercial paper
facility, thereby eliminating duplicate program costs. Notwithstanding the
foregoing, in the event that Alliant Energy subsequently determines to restore
AER's separate commercial paper facility, it seeks to have the flexibility to
guarantee borrowings by AER. Accordingly, Alliant Energy requests authority to
guarantee up to $700 million borrowings by AER in order to fund the Non-Utility
Money Pool in lieu of making direct advances to the Non-Utility Money Pool in
that amount. Filed herewith as Exhibit B-2 is a copy of the proposed Amended and
Restated Non-Utility Money Pool Agreement.
The interest rates for Internal Funds and External Funds loaned through
or invested in the Non-Utility Money Pool will be determined in the same manner
as described above. All loans to, and borrowings from, the Non-Utility Money
Pool to finance the existing businesses of the Non-Utility Money Pool
participants will be exempt pursuant to the terms of Rule 52 under the Act.
In addition to Alliant Energy and AER, the following direct and
indirect subsidiaries of AER are currently participants in the Non-Utility Money
Pool:
Alliant Energy Field Services, LLC
Alliant Energy Generation, Inc.
Alliant Energy Integrated Services Company
Alliant Energy Integrated Services - Energy Management LLC Alliant
Energy Integrated Services - Energy Solutions LLC Alliant Energy
International, Inc.
Alliant Energy Investments, Inc.
Alliant Energy Transportation Inc.
Capital Square Financial Corporation
Cedar Rapids and Iowa City Railway Company
Cogenex Corporation
Energy Performance Services, Inc.
Energys, Inc.
Heartland Energy Group, Inc.
Heartland Properties, Inc.
Heartland Energy Services, Inc.
IEI Barge Services, Inc.
Industrial Energy Applications, Inc.
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Industrial Energy Applications Delaware Inc.
Iowa Land and Building Company
Prairie Ridge Business Park, L.C.
RMT, Inc.
Schedin & Associates, Inc.
SVBK Consulting Group, Inc.
Transfer Services, Inc.
Whiting Petroleum Corporation
Williams Bulk Transfer Inc.
No loans through the Non-Utility Money Pool would be made to, and no
borrowings through the Non-Utility Money Pool would be made by Alliant Energy.
G. Use of Proceeds. As indicated above, the proceeds of Short-term
Debt issued by Alliant Energy will be used primarily to fund loans to its
subsidiaries through the Utility and Non-Utility Money Pools, and for other
lawful corporate purposes, including temporary funding of investments in EWGs
and FUCOs and other exempt or authorized investments (e.g., "energy-related
companies" under Rule 58), subject to the limitations of Rule 53 or Rule 58, as
applicable, or the limitations imposed under any applicable order(s). The
proceeds of Short-term Debt issued by IP&L and of Money Pool borrowings by IP&L
and Alliant Services will be used for working capital, to fund capital projects,
and for other lawful corporate purposes, provided, however, that no part of the
proceeds of Short-term Debt issued by IP&L or Money Pool borrowings by IP&L or
Alliant Services will be used to make investments in any EWG or FUCO. The
proceeds of borrowings under the Non-Utility Money Pool by AER and the other
participating Non-Utility Subsidiaries will be used for working capital, to fund
capital projects, and for other lawful corporate purposes, including but not
limited to temporarily funding of investments in EWGs and FUCOs and other exempt
or authorized investments (e.g., "energy-related companies" under Rule 58),
subject to the limitations of Rule 53 or Rule 58, as applicable, or the
limitations imposed under any applicable order(s).
H. Reports. Alliant Services will continue to administer the Utility
and Non-Utility Money Pools and provide cash management and banking services to
the participants on an "at cost" basis. Alliant Services will prepare and file
reports pursuant to Rule 24 with respect to the external short-term financing
activity of Alliant Energy and IP&L and borrowings under the Utility Money Pool
and certificates on Form U-6B-2 pursuant to Rule 52 with respect to external
short-term financing activity of AER and borrowings under the Non-Utility Money
Pool.(12) These reports will be filed within 45 days of the end of each calendar
quarter.
-------------------
(12) In order to combine information on all Utility Money Pool activity in one
report, it is proposed that information on borrowings by Alliant Services
under the Utility Money Pool, although exempt pursuant to Rule 52, be
combined with information on Utility Money Pool activity of the other
Utility Money Pool participants on the Rule 24 reports rather than reported
separately on Form U-6B-2.
13
ITEM 2. FEES, COMMISSIONS AND EXPENSES.
------------------------------
The fees, commissions and expenses incurred or to be incurred in
connection with the transactions proposed herein are estimated at not more than
$75,000. Rating agency fees (for the commercial paper) and compensating balances
and other fees paid to banks to maintain the credit lines supporting the
commercial paper are included in the proposed limit on the effective cost of
money on Short-term Debt.
ITEM 3. APPLICABLE STATUTORY PROVISIONS.
-------------------------------
A. General. Sections 6(a), 7, 9(a), 10, 12, 32 and 33 of the Act and
Rules 24, 42, 43, 45 and 52 thereunder are applicable to the proposed
transactions.
B. Rule 53/54 Analysis. 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 March 31, 2002, Alliant Energy's "aggregate investment," as
defined in Rule 53(a)(1), in EWGs and FUCOs was approximately $762.1 million, or
approximately 94.33% of Alliant Energy's average "consolidated retained
earnings," also as defined in Rule 53(a)(1), for the four quarters ended
March 31, 2002 ($807.9 million), which exceeds the 50% "safe harbor" limitation
contained in Rule 53(a). However, by order dated October 3, 2001 (Holding Co.
Act Release No. 27448), 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
October 3, 2001 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 October 3, 2001 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
March 31, 2002, Alliant Energy's consolidated capitalization consisted of 39.6%
common equity, versus 37.3% at September 30, 2001 (the end of the quarter
immediately preceding the October 3, 2001 order). The transactions proposed
herein merely continue existing short-term funding arrangements at the same
14
authorized levels. Hence, the proposed transactions will not have any material
impact on capitalization. Finally, since the date of the October 3, 2001 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.
--------------------
The participation by IP&L in the Utility Money Pool under the Amended
and Restated Utility Money Pool Agreement is subject to the approval of Illinois
Commerce Commission ("ICC") and the Minnesota Public Utilities Commission
("MPUC"). In addition, the issuance of Short-term Debt by IP&L requires approval
by the MPUC. IP&L has filed applications with the ICC and MPUC for approval of
the proposed transactions. (Exhibits D-1, D-3 and D-5 hereto). The orders issued
by the ICC and MPUC will be filed as Exhibits D-2, D-4 and D-6 by Post-Effective
Amendment in this proceeding. Except as provided above, no state commission and
no federal commission, other than this Commission, has jurisdiction over the
proposed transactions.
ITEM 5. PROCEDURE.
---------
The Commission has published a notice under Rule 23 with respect to the
filing of this Application or Declaration, and no request for hearing was made.
The applicants request that the Commission's order approving the proposed
transactions be issued as soon as its rules permit, and that such order reserve
jurisdiction over the issuance of Short-term Debt by IP&L and IP&L's
participation in the Utility Money Pool under the Amended and Restated Utility
Money Pool Agreement pending receipt by IP&L of orders of the ICC and MPUC. The
applicants further request that there should not be a 30-day waiting period
between issuance of the Commission's order and the date on which the order are
to become effective, hereby waive a recommended decision by a hearing officer or
any other responsible officer of the Commission, and consent that the Division
of Investment Management may assist in the preparation of the Commission's
decision and/or orders, unless the Division opposes the matters proposed herein.
ITEM 6. EXHIBITS AND FINANCIAL STATEMENTS.
---------------------------------
A. EXHIBITS.
--------
A - None.
15
B-1 - Form of Amended and Restated Utility Money Pool Agreement
(including form of grid note). (Previously filed).
B-2 - Form of Amended and Restated Non-Utility Money Pool
Agreement (including form of grid note). (Previously
filed).
C - None.
D-1 - Application of IP&L to Illinois Commerce Commission for
approval of Amended and Restated Utility Money Pool
Agreement. (Filed herewith).
D-2 - Order of Illinois Commerce Commission approving Amended
and Restated Utility Money Pool Agreement. (To be filed by
amendment).
D-3 - Application of IP&L to Minnesota Public Utilities
Commission for approval of Amended and Restated Utility
Money Pool Agreement. (Filed herewith).
D-4 - Order of Minnesota Public Utilities Commission approving
Amended and Restated Utility Money Pool Agreement. (To be
filed by amendment).
D-5 - Application of IP&L to Minnesota Public Utilities
Commission for approval of capital structure. (Filed
herewith).
D-6 - Order of the Minnesota Public Utilities Commission
approving capital structure of IP&L. (To be filed by
amendment).
E - None.
F - Opinion of Counsel. (Filed herewith).
G - Form of Federal Register Notice. (Previously filed).
B. FINANCIAL STATEMENTS.
--------------------
FS-1 Consolidated Balance Sheet of Alliant Energy
Corporation as of December 31, 2001 (incorporated by
reference to the Annual Report on Form 10-K of
Alliant Energy Corporation for the year ended
December 31, 2001) (File No. 1-9894).
FS-2 Consolidated Statement of Income of Alliant Energy
Corporation for the year ended December 31, 2001
(incorporated by reference to the Annual Report on
Form 10-K of Alliant Energy Corporation for the year
ended December 31, 2001) (File No. 1-9894).
16
FS-3 Balance Sheet of IES Utilities Inc., as of December
31, 2001 (incorporated by reference to the Annual
Report on Form 10-K of IES Utilities, Inc. for the
year ended December 31, 2001) (File No. 0-4117-1).
FS-4 Statement of Income of IES Utilities Inc., for the
year ended December 31, 2001 (incorporated by
reference to the Annual Report on Form 10-K of IES
Utilities, Inc. for the year ended December 31, 2001)
(File No. 0-4117-1).
FS-5 Balance Sheet of IPC, as of December 31, 2001
(incorporated by reference to Amendment No. 1 to the
Current Report on Form 8-K/A of Alliant Energy
Corporation dated February 20, 2001) (File No.
1-9894).
FS-6 Statement of Income of IPC, for the year ended
December 31, 2001 (incorporated by reference to
Amendment No. 1 to the Current Report on Form 8-K/A
of Alliant Energy Corporation dated February 20,
2001) (File No. 1-9894).
FS-7 Unaudited Pro Forma Combined Balance Sheet of
Interstate Power and Light Company, as of December
31, 2001 (incorporated by reference to the Current
Report on Form 8-K of Interstate Power and Light
Company dated April 24, 2002) (File No. 0-4117-1).
FS-8 Consolidated Balance Sheet of Alliant Energy
Corporation as of March 31, 2002 (incorporated by
reference to the Quarterly Report on Form 10-Q of
Alliant Energy Corporation for the period ended March
31, 2002) (File No. 1-9894).
FS-9 Consolidated Statement of Income of Alliant Energy
Corporation for the three months ended March 31, 2002
(incorporated by reference to the Quarterly Report on
Form 10-Q of Alliant Energy Corporation for the
period ended March 31, 2002) (File No. 1-9894).
FS-10 Consolidated Balance Sheet of Interstate Power and
Light Company as of March 31, 2002 (incorporated by
reference to the Quarterly Report on Form 10-Q of
Interstate Power and Light Company for the period
ended March 31, 2002) (File No. 0-4117-1).
FS-11 Consolidated Statement of Income of Interstate Power
and Light Company for the three months ended March
31, 2002 (incorporated by reference to the Quarterly
Report on Form 10-Q of Interstate Power and Light
Company for the period ended March 31, 2002) (File
No. 0-4117-1).
17
ITEM 7. INFORMATION AS TO ENVIRONMENTAL EFFECTS.
---------------------------------------
The matters that are the subject of this Application or Declaration do
not involve a "major federal action," nor do they "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 proposed herein 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 Application or Declaration.
18
SIGNATURES
Pursuant to the requirements of the Public Utility Holding Company Act
of 1935, as amended, the undersigned companies have duly caused this statement
filed herein to be signed on their behalf by the undersigned thereunto duly
authorized.
ALLIANT ENERGY CORPORATION
INTERSTATE POWER AND LIGHT COMPANY
ALLIANT ENERGY CORPORATE SERVICES, INC.
ALLIANT ENERGY RESOURCES, INC.
WILLIAMS BULK TRANSFER INC.
By: /s/ F. J. Buri
-----------
Name: F. J. Buri
Title: Corporate Secretary
ALLIANT ENERGY GENERATION, INC.
ALLIANT ENERGY INTEGRATED SERVICES
COMPANY
ALLIANT ENERGY INTERNATIONAL, INC.
ALLIANT ENERGY INVESTMENTS, INC.
ALLIANT ENERGY TRANSPORTATION, INC.
COGENEX CORPORATION
ENERGY PERFORMANCE SERVICES, INC.
IOWA LAND AND BUILDING COMPANY
By: /s/ F. J. Buri
-----------
Name: F. J. Buri
Title: Secretary
CEDAR RAPIDS AND IOWA CITY RAILWAY
COMPANY
ENERGYS, INC.
HEARTLAND ENERGY GROUP, INC.
HEARTLAND ENERGY SERVICES, INC.
IEI BARGE SERVICES, INC.
INDUSTRIAL ENERGY APPLICATIONS, INC.
INDUSTRIAL ENERGY APPLICATIONS DELAWARE
INC.
TRANSFER SERVICES, INC.
By: /s/ Thomas L. Hanson
-----------------
Name: Thomas L. Hanson
Title: Treasurer and Secretary
(signatures continued on next page)
19
ALLIANT ENERGY FIELD SERVICES, LLC
By: /s/ Jim Overbey
-----------
Name: Jim Overbey
Title: Manager
ALLIANT ENERGY INTEGRATED SERVICES-
ENERGY MANAGEMENT LLC
ALLIANT ENERGY INTEGRATED SERVICES-
ENERGY SOLUTIONS LLC
By: /s/ Charles Castine
---------------
Name: Charles Castine
Title: Manager
WHITING PETROLEUM CORPORATION
By: /s/ F. J. Buri
-----------
Name: F. J. Buri
Title: Assistant Secretary
RMT, INC.
By: /s/ Thomas L. Hanson
-----------------
Name: Thomas L. Hanson
Title: Assistant Treasurer
HEARTLAND PROPERTIES, INC.
CAPITAL SQUARE FINANCIAL CORPORATION
By: /s/ Ruth A. Domack
---------------
Name: Ruth A. Domack
Title: President
(signatures continued on next page)
20
PRAIRIE RIDGE BUSINESS PARK, L.C.
BY: IOWA LAND AND BUILDING COMPANY,
A PARTNER
By: /s/ Thomas L. Aller
----------------
Name: Thomas L. Aller
Title: Vice President
SCHEDIN & ASSOCIATES, INC.
SVBK CONSULTING GROUP, INC.
By: /s/ John T. Steinhoff
------------------
Name: John T. Steinhoff
Title: President
Date: June 21, 2002