File No. 70-10009
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
AMENDMENT NO. 2 TO
FORM U-1
APPLICATION OR DECLARATION
under
The Public Utility Holding Company Act of 1935
THE SOUTHERN COMPANY ALABAMA POWER COMPANY
270 Peachtree Street, N.W. 600 North 18th Street
Atlanta, Georgia 30303 Birmingham, Alabama 35291
GULF POWER COMPANY GEORGIA POWER COMPANY
One Energy Place 241 Ralph McGill Boulevard, N.E.
Pensacola, Florida 32520 Atlanta, Georgia 30308
MISSISSIPPI POWER COMPANY SAVANNAH ELECTRIC AND POWER COMPANY
2992 West Beach 600 East Bay Street
Gulfport, Mississippi 39501 Savannah, Georgia 31401
(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 William E. Zales, Jr., Vice President
The Southern Company and Corporate Secretary
270 Peachtree Street, N.W. Alabama Power Company
Atlanta, Georgia 30303 600 North 18th Street
Birmingham, Alabama 35291
Warren E. Tate, Secretary and Treasurer Janice G. Wolfe
Gulf Power Company Corporate Secretary
One Energy Place Georgia Power Company
Pensacola, Florida 32520 241 Ralph McGill Boulevard, N.E.
Atlanta, Georgia 30308
Vickie L. Pierce Nancy E. Frankenhauser
Corporate Secretary Corporate Secretary
Mississippi Power Company Savannah Electric and Power Company
2992 West Beach 600 East Bay Street
Gulfport, Mississippi 39501 Savannah, Georgia 31401
(Names and addresses of agents for service)
The Commission is requested to mail signed copies of all orders,
notices and communications to:
Gale E. Klappa John D. McLanahan, Esq.
Executive Vice President Troutman Sanders LLP
The Southern Company 600 Peachtree Street, N.E.
270 Peachtree Street, NW Suite 5200
Atlanta, Georgia 30303 Atlanta, Georgia 30308-2216
Walter M. Beale, Jr.
Balch & Bingham LLP
1901 Sixth Avenue North, Suite 2600
Birmingham, Alabama 35203
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The Application pending in the foregoing file is amended and restated in its
entirety as follows:
ITEM 1. DESCRIPTION OF PROPOSED TRANSACTIONS.
The Southern Company ("Southern") is a registered holding company
under the Public Utility Holding Company Act of 1935, as amended (the "Act").
Alabama Power Company ("Alabama"), Georgia Power Company ("Georgia"), Gulf Power
Company ("Gulf"), Mississippi Power Company ("Mississippi") and Savannah
Electric and Power Company ("Savannah") (collectively, the "Operating
Affiliates") are wholly-owned electric utility subsidiaries of Southern.
The Operating Affiliates previously have acquired in the ordinary
course of business, by purchase or lease, coal hopper railroad cars for use in
transporting coal in dedicated unit train service to the respective company's
coal-fired generating plants. Alabama currently has approximately 4,300 such
railcars operating to transport coal to two of its plants. Georgia currently has
approximately 4,400 such railcars operating to transport coal to nine of its
plants. Gulf does not currently have any such railcars, but Mississippi has
entered into a lease agreement on behalf of itself and Gulf with respect to 800
cars for the transportation of coal to Plant Daniel, which is owned by
Mississippi and Gulf as tenants in common. Mississippi currently has
approximately 1,000 such railcars operating to transport coal to two of its
plants. Savannah currently has approximately 94 such railcars operating to
transport coal to one of its plants.
These railcars have been or will be acquired for the Operating
Affiliates' use based upon anticipated needs as indicated from coal burn
forecasts. Such forecasts are subject to periodic revision as a result of
changes in fuel prices, adjustments to the Southern electric system's economic
dispatch procedures and other causes. Thus, from time to time an Operating
Affiliate may, because of changes in such forecasts and other factors, have a
need for a lesser or greater number of railcars than then currently available to
it. During any surplus period it may be desirable and economically advantageous
to lease or sublease the excess railcars to non-affiliates. Accordingly, each
Operating Affiliate hereby requests authority, from time to time on or prior to
December 31, 2007, to lease or sublease to non-affiliates railcars not then
needed for its operations for the transportation of coal by such non-affiliates.
It is proposed that all such leases or subleases shall be directly from the
Operating Affiliates to such non-affiliates, except where an "energy related
company", as defined in Rule 58 under the Act, is used, for which approval is
not required.
It is proposed that any such non-affiliate lease or sublease will be
at market rates, which will be sufficient to cover all variable costs and make a
contribution to the fixed costs associated with such railcars, will not exceed
one year in duration and will give the respective Operating Affiliate the right
of termination, upon reasonable notice, to permit the return of the cars to
customer service if needed earlier. It is further proposed that no more than
2,500 railcars will be leased or subleased at any one time pursuant to authority
granted hereunder.
Revenues realized from any transaction pursuant to authority granted
hereunder will be credited against the respective Operating Affiliate's costs as
owner or lessee (as the case may be) of the railcars and reflected accordingly
in its ratemaking provisions, except to the extent the regulatory authority
having jurisdiction over the matter authorizes a different treatment. In the
case of Georgia, Gulf, Mississippi and Savannah, such revenues will be recorded
in Fuel Stock account number 151. In the case of Alabama such revenues will be
recorded in Rent from Electric Property account number 709-00017.
These proposed transactions are substantially identical to those
authorized by the Commission for the Operating Affiliates in File No. 70-7528
(HCAR 35-25298, April 15, 1991).
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Leases or subleases of railcars by an Operating Affiliate to another
Operating Affiliate will be reported in accordance with Item 8 of the Annual
Report on Form U5S.
ITEM 2. FEES, COMMISSIONS AND EXPENSES.
The estimated fees and expenses to be paid or incurred in
connection with the proposed transactions are as follows:
Legal Fees..................... $ 5,000
Miscellaneous.................. 5,000
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Total................... $10,000
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ITEM 3. APPLICABLE STATUTORY PROVISIONS.
The applicants consider that the proposed transactions with
non-affiliates, as described herein, may be subject to Sections 9(a) and 10 of
the Act.
The proposed transactions will be carried out in accordance with the
procedure specified in Rule 23 and pursuant to an order of the Securities and
Exchange Commission (the "Commission") with respect thereto. It is expected that
the proposed transactions will be consummated from time to time as described in
Item 1 hereof in such a manner and to such extent as may be permitted in order
to obtain the maximum benefit therefrom.
Rule 54 Analysis: The proposed transactions are also subject to Rule
54, which provides that, in determining whether to approve an application which
does not relate to any "exempt wholesale generator" ("EWG") or "foreign utility
company" ("FUCO"), the Commission shall not consider the effect of the
capitalization or earnings of any such EWG or FUCO which is a subsidiary of a
registered holding company if the requirements of Rule 53(a), (b) and (c) are
satisfied.
Southern currently meets all of the conditions of Rule 53(a). At
December 31, 2001, Southern's "aggregate investment," as defined in Rule
53(a)(1), in EWGs and FUCOs was approximately $102.5 million, or 2.24% of
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Southern's "consolidated retained earnings," also as defined in Rule 53(a)(1),
as of December 31, 2001 ($4.569 billion).1
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.
ITEM 4. REGULATORY APPROVAL.
The proposed transaction is not subject to the jurisdiction of any
state commission. The proposed transaction is not subject to the jurisdiction of
any Federal commission other than the Commission.
___________________________
1 As discussed in Southern's Application on Form U-1 (File No. 70-9727) relating
to the spin-off of Mirant Corporation ("Mirant"), Southern and Mirant
reorganized certain energy-related and FUCO activities and Mirant completed a
tax-free distribution to Southern of these activities on March 5, 2001 (the
"Mini-Spin"). On April 2, 2001, Southern completed the spin-off of its remaining
ownership interest in Mirant to Southern's shareholders. Therefore, the four
indirect subsidiaries (EPZ Lease, Inc., Dutch Gas Lease, Inc., GAMOG Lease, Inc.
and NUON Lease, Inc.) obtained through the Mini-Spin are the only remaining FUCO
investments held by Southern. Although Southern now owns all of the equity in
these companies as a result of the Mini-Spin, 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. Furthermore, the only remaining EWG
investment held by Southern after the spin-off is Southern Company-Florida LLC,
which was organized during the first quarter of 2001. Southern has executed
limited keep-well commitments whereby Southern would be required to make capital
contributions to Southern Energy Finance Capital Corp. or to Southern Energy
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 $388 million as of December 31, 2001.
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ITEM 5. PROCEDURE.
The Operating Affiliates request that the Commission's order herein be
issued as soon as the rules will allow and that there be no thirty-day period
between the issuance of the Commission's order and the date on which it is to
become effective. The Operating Affiliates hereby waive a recommended decision
by a hearing officer or other responsible officer of the Commission and hereby
consent that the Division of Investment Management may assist in the preparation
of the Commission's decision and/or order herein, unless such division opposes
the matter covered by this application or declaration.
ITEM 6. EXHIBITS AND FINANCIAL STATEMENTS.
(a) Exhibits.
A - None.
B - None.
C - None.
D - None.
E - None.
F-1 - Opinion of Balch & Bingham LLP, counsel
to Alabama and Mississippi.
(Previously Filed)
F-2 - Opinion of Troutman Sanders LLP, counsel
to Southern, Georgia and Savannah.
(Previously Filed)
F-3 - Opinion of Beggs & Lane, counsel to Gulf.
(Previously Filed)
G - None
H - Form of Notice. (Previously Filed)
(b) Financial Statements.
No financial statements are filed herewith since the financial
condition of the Operating Affiliates is not material to the proposed
transactions.
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ITEM. 7. INFORMATION AS TO ENVIRONMENTAL EFFECTS.
(a) In view of the nature of the proposed transactions described
herein, the Commission's action in this matter will not constitute any major
federal action significantly affecting the quality of the human environment.
(b) No other federal agency has prepared or is preparing an
environmental impact statement with regard to the proposed transactions.
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SIGNATURES
Pursuant to the requirements of the Public Utility Holding Company Act
of 1935, the undersigned companies have duly caused this statement to be signed
on their behalf by the undersigned thereunto duly authorized.
Date: May 22, 2002 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
GULF POWER COMPANY
By: /s/Wayne Boston
Wayne Boston, Assistant Secretary
MISSISSIPPI POWER COMPANY
By: /s/Wayne Boston
Wayne Boston, Assistant Secretary
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SAVANNAH ELECTRIC AND POWER COMPANY
By: /s/Wayne Boston
Wayne Boston, Assistant Secretary
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