File No. 70-10186
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
AMENDMENT NO. 4 (POST-EFFECTIVE AMENDMENT NO. 1) 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 COMMUNICATIONS SERVICES, INC.
600 North 18th Street 5555 Glenridge Connector, Suite 500
Birmingham, Alabama 35291 Atlanta, Georgia 30342
GEORGIA POWER COMPANY SOUTHERN COMPANY CAPITAL FUNDING, INC.
241 Ralph McGill Boulevard, N.E. 1403 Foulk Road, Suite 102
Atlanta, Georgia 30308 Wilmington, Delaware 19803
GULF POWER COMPANY SOUTHERN COMPANY ENERGY SOLUTIONS LLC
One Energy Place 241 Ralph McGill Boulevard, N.E.
Pensacola, Florida 32520 Atlanta, Georgia 30308
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
(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)
Tommy Chisholm, Secretary
The Southern Company
270 Peachtree Street, N.W.
Atlanta, Georgia 30303
William E. Zales, Jr., Vice President Tommy Chisholm, Secretary
and Corporate Secretary Southern Communications Services, Inc.
Alabama Power Company 270 Peachtree Street N.W.
600 North 18th Street Atlanta, Georgia 30302
Birmingham, Alabama 35291
Janice G. Wolfe, Corporate Secretary Daniel P. McCollom, Secretary
Georgia Power Company Southern Company Capital Funding, Inc.
241 Ralph McGill Boulevard, N.E. 1403 Foulk Road, Suite 102
Atlanta, Georgia 30308 Wilmington, Delaware 19803
Susan N. Ritenour, Secretary and Treasurer Tommy Chisholm, Secretary
Gulf Power Company Southern Company Energy Solutions LLC
One Energy Place 270 Peachtree Street N.W.
Pensacola, Florida 32520 Atlanta, Georgia 30302
Vicki L. Pierce, Corporate Secretary Tommy Chisholm, Vice President and 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
Tommy Chisholm, Corporate 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
(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
The Application in the foregoing file is amended to include the
information below.
Item 1.
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.
The following text should be inserted at the end of Section 1.7 of Item
1:
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 ("Interest Rate Hedges"),
subject to certain limitations and restrictions, 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 whose
parent companies' senior debt ratings, 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
- 1 -
transactions would be for fixed periods and stated notional amounts. 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 Interest
Rate Hedge will not exceed those generally obtainable in competitive markets for
parties of comparable credit quality.
(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"),
subject to certain restrictions and limitations. 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
- 2 -
Trades") or a combination of On-Exchange Trades and Off-Exchange Trades.
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"), SFAS 138 ("Accounting for
Certain Derivative Instruments and Certain Hedging Activities") or other
standards relating to accounting for derivative transactions as are adopted and
implemented by the Financial Accounting Standards Board.
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), 12(c) 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
- 3 -
to an order of the Commission with respect thereto.
Rule 53 Analysis. The proposed transactions are subject to Rule 53,
which provides that, in determining whether to approve the issue or sale of a
security for purposes of financing the acquisition of an "exempt wholesale
generator" ("EWG") or "foreign utility company" ("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
September 30, 2004, Southern's "aggregate investment," as defined in Rule
53(a)(1), in EWGs and FUCOs was approximately $265 million, or about 4.78% of
Southern's "consolidated retained earnings," also as defined in Rule 53(a)(1),
as of September 30, 2004 ($5.540 billion).1
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)
------------------
1 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 $410
million as of September 30, 2004.
- 4 -
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 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(b) is amended as follows:
(b) Financial Statements.
Consolidated balance sheet, consolidated statements of
capitalization, stockholders' equity and comprehensive income
of Southern at September 30, 2004. (Designated in Southern's
Form 10-Q for the quarter ended September 30, 2004, File No.
1-3526.)
- 5 -
Statements of income and cash flows of Southern for the
quarter ended September 30, 2004. (Designated in Southern's
Form 10-Q for the quarter ended September 30, 2004, File No.
1-3526.)
Balance sheet of Alabama Power Company at September 30, 2004.
(Designated in Alabama Power Company's Form 10-Q for the
quarter ended September 30, 2004, File No. 1-3164.)
Statement of income of Alabama Power Company for the quarter
ended September 30, 2004. (Designated in Alabama Power
Company's Form 10-Q for the quarter ended September 30, 2004,
File No. 1-3164.)
Balance sheet of Georgia Power Company at September 30, 2004.
(Designated in Georgia Power Company's Form 10-Q for the
quarter ended September 30, 2004, File No. 1-6468.)
Statement of income of Georgia Power Company for the quarter
ended September 30, 2004. (Designated in Georgia Power
Company's Form 10-Q for the quarter ended September 30, 2004,
File No. 1-6468.)
Balance sheet of Gulf Power Company at September 30, 2004.
(Designated in Gulf Power Company's Form 10-Q for the quarter
ended September 30, 2004, File No. 0-2429.)
Statement of income of Gulf Power Company for the quarter
ended September 30, 2004. (Designated in Gulf Power Company's
Form 10-Q for the quarter ended September 30, 2004, File No.
0-2429.)
Balance sheet of Mississippi Power Company at September 30,
2004. (Designated in Mississippi Power Company's Form 10-Q for
the quarter ended September 30, 2004, File No. 001-11229.)
Statement of income of Mississippi Power Company for the
quarter ended September 30, 2004. (Designated in Mississippi
Power Company's Form 10-Q for the quarter ended September 30,
2004, File No. 001-11229.)
Balance sheet of Savannah Electric and Power Company at
September 30, 2004. (Designated in Savannah Electric and Power
Company's Form 10-Q for the quarter ended September 30, 2004,
File No. 1-5072.)
Statement of income of Savannah Electric and Power Company for
the quarter ended September 30, 2004. (Designated in Savannah
Electric and Power Company's Form 10-Q for the quarter ended
September 30, 2004, File No. 1-5072.)
- 6 -
Balance sheet of Southern Power Company at September 30, 2004
(Designated in Southern Power Company's Form 10-Q for the
quarter ended September 30, 2004, File No. 333-98553.
Statement of income of Southern Power Company at September 30,
2004 (Designated in Southern Power Company's Form10-Q for the
quarter ended September 30, 2004, File No. 333-98553).
Balance sheet of Southern Communications Services, Inc. at
December 31, 2003. (Designated in Southern Communications
Services, Inc.'s U-13-60 for the year ended December 31, 2003,
File No.
49-000159.)
Statement of income of Southern Communications Services, Inc.
for the period ending December 31, 2003. (Designated in
Southern Communications Services, Inc.'s U-13-60 for the year
ended December 31, 2003, File No. 49-000159.)
Balance sheet of Capital Funding at December 31, 2003.
(Designated in Southern's U5S for the year ended December 31,
2003, File No. 070-10203.)
Statement of income of Capital Funding for the period ending
December 31, 2003. (Designated in Southern's U5S for the year
ended December 31, 2003, File No. 070-10203.)
Balance sheet of Southern Company Energy Solutions LLC at
December 31, 2003. (Designated in Southern's U5S for the year
ended December 31, 2003, File No. 070-10203.)
Statement of income of Southern Company Energy Solutions LLC
for the period ending December 31, 2003. (Designated in
Southern's U5S for the year ended December 31, 2003, File No.
070-10203.)
Balance sheet of SCS at December 31, 2003. (Designated in
SCS's U-13-60 for the year ended December 31, 2003, File No.
49-00059.)
Statement of income of SCS for the period ending December 31,
2003. (Designated in SCS's U-13-60 for the year ended December
31, 2003, File No. 49-00059.)
Balance sheet of Southern Nuclear Operating Company, Inc. at
December 31, 2003. (Designated in Southern Nuclear Operating
Company, Inc.'s U-13-60 for the year ended December 31, 2003,
File No. 49-00099.)
Statement of income of Southern Nuclear Operating Company,
Inc. for the period ending December 31, 2003. (Designated in
Southern Nuclear Operating Company, Inc.'s U-13-60 for the
year ended December 31, 2003, File No. 49-00099.)
- 7 -
Balance sheet of Southern Electric Generating Company of
December 31, 2003. (Designated in Southern's U5S for the year
ended December 31, 2003, File No. 070-10203).
Statement of income for Southern Electric Generating Company
for the period ending December 31, 2003. (Designated in
Southern's U5S for the year ended December 31, 2003, File No.
070-10203).
Since September 30, 2004, 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: December 14, 2004 THE SOUTHERN COMPANY
By: /s/Tommy Chisholm
Tommy Chisholm
Secretary
ALABAMA POWER COMPANY
By: /s/Wayne Boston
Wayne Boston
Assistant Secretary
GEORGIA POWER COMPANY
By: /s/Wayne Boston
Wayne Boston
Assistant Secretary
- 8 -
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/Tommy Chisholm
Tommy Chisholm
Secretary
SOUTHERN COMPANY CAPITAL FUNDING, INC.
By: /s/Wayne Boston
Wayne Boston
Assistant Secretary
- 9 -
SOUTHERN COMPANY ENERGY SOLUTIONS LLC
By: /s/Tommy Chisholm
Tommy Chisholm
Secretary
SOUTHERN COMPANY SERVICES, INC.
By: /s/Tommy Chisholm
Tommy Chisholm
Vice President and Secretary
SOUTHERN NUCLEAR OPERATING COMPANY, INC.
By: /s/Wayne Boston
Wayne Boston
Assistant Secretary
SOUTHERN ELECTRIC GENERATING COMPANY
By: /s/Wayne Boston
Wayne Boston
Assistant Secretary
- 10 -