DF 98-032
New England Power Company
Petition for Increase in Short-Term Borrowing Authority
Order NISI Approving Request for Increase in Short-Term Borrowing
Authority
O R D E R N O. 22,907
April 28, 1998
On March 13, 1998, New England Power Company, Inc.
(NEP), filed a petition with the New Hampshire Public Utilities
Commission (Commission), pursuant to RSA 369, for authority to
increase its short-term borrowing authority from $375 million to
$750 million on a temporary basis. NEP's petition indicates that
following the completion of the divestiture of substantially all
of its non-nuclear generation assets, it will refile for a lower
maximum level of short-term borrowing authority.
In its Order No. 20,952 in DF 93-152, issued September
8, 1993, the Commission provided NEP authorization to issue and
renew its notes, bonds, and other evidences of indebtedness
payable in less than twelve months after the date thereof, in an
aggregate amount not to exceed $375 million. In the instant
petition, NEP indicates that the request for a higher level of
short-term borrowing authority of $750 million is for the purpose
of increasing its ability to finance the buyout of purchased
power contracts with non-utility generators and for the
repurchase of certain of its mortgage bonds. At the time of the
anticipated divestiture, NEP will have to defease its outstanding
mortgage bonds. In order to avoid any additional defeasance
costs at that time, NEP does not plan to issue any additional
mortgage bonds prior to divestiture. Therefore, NEP's primary
funding vehicle will be short-term debt.
NEP has indicated that, with its on-going short-term
borrowing needs in a range of $150 to $225 million, a net
potential short-term borrowing obligation associated with its
variable rate tax-exempt bonds of approximately $167 million, and
potential non-utility generator buyouts that are currently being
negotiated of approximately $330 million, a range of potential
short-term borrowing needs of $647 million to $722 million is
obtained. Accordingly, NEP has requested a total maximum
short-term borrowing capacity of $750 million.
Based upon our review of NEP's filing, and the proposed
purposes of the increased short-term borrowing authority, we will
approve the Company's request as filed. We will direct the
Company to file within 60 days of the divestiture its intentions
with respect to the higher maximum short-term borrowing authority
provided for herein. NEP should make the same filing in the
event the divestiture does not go forward by December 31, 1999.
Based upon the foregoing, it is hereby
ORDERED NISI, that New England Power Company, pursuant
to RSA 369, is authorized to increase its short-term borrowing
authority from $375 million to $750 million on a temporary basis;
and it is
FURTHER ORDERED, that New England Power Company shall
file within 60 days of the divestiture of substantially all of
its non-nuclear generation assets a statement of its intentions
with respect to the higher maximum short-term borrowing authority
provided for herein; and it is
FURTHER ORDERED, that, in the event that the
divestiture does not go forward by December 31, 1999, NEP shall
similarly file a statement of its intentions with respect to the
level of short-term debt as authorized herein; and it is
FURTHER ORDERED, that on or about January 1 and July 1
of each year New England Power Company shall file with this
Commission a detailed statement, duly sworn to by its treasurer,
showing the disposition of the proceeds of said borrowings; and
it is
FURTHER ORDERED, that pursuant to N.H. Admin. Rules,
Puc 1604.03 or Puc 1605.03, the Petitioner shall cause a copy of
this Order Nisi to be published once in a statewide newspaper of
general circulation or of circulation in those portions of the
state where operations are conducted, such publication to be no
later than May 5, 1998 and to be documented by affidavit filed
with this office on or before May 12, 1998; and it is
FURTHER ORDERED, that all persons interested in
responding to this petition be notified that they may submit
their comments or file a written request for a hearing on this
matter before the Commission no later than May 19, 1998; and it
is
FURTHER ORDERED, that any party interested in
responding to such comments or request for hearing shall do so no
later than May 26, 1998; and it is
FURTHER ORDERED, that this Order Nisi shall be
effective May 28, 1998, unless the Commission provides otherwise
in a supplemental order issued prior to the effective date.
By order of the Public Utilities Commission of New
Hampshire this twenty-eighth day of April, 1998.
Douglas L. Patch Bruce B. Ellsworth Susan S. Geiger
Chairman Commissioner Commissioner
Attested by:
Claire D. DiCicco
Assistant Secretary