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Appeal from the United States District Court for the Central District of California
Appeal from the United States District Court for the Central District of California (54K)
Doc #263370: Click preview link for longer preview.
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
SOUTHERN CALIFORNIA EDISON )
COMPANY, )
Plaintiff-Appellee, )
v. )
LORETTA M. LYNCH; HENRY M. )
DUQUE; RICHARD A. BILAS; CARL ) No. 01-56879
W. WOOD; GEOFFREY F. BROWN, ) D.C. No.
Commissioners of California ) CV-00-12056-RSWL
Public Utilities Commission, )
Defendants-Appellees. )
UTILITY REFORM NETWORK, )
Defendant-intervenor- )
Appellant.)
SOUTHERN CALIFORNIA EDISON )
COMPANY, )
Plaintiff-Appellee, )
RELIANT ENERGY SERVICES, INC.; )
MIRANT AMERICAS ENERGY ) No. 01-56993
MARKETING, LP, ) D.C. No.
Intervenors-Appellants, ) CV-00-12056-RSWL
v. )
LORETTA M. LYNCH; HENRY M. )
DUQUE; RICHARD A. BILAS; CARL )
W. WOOD; GEOFFREY F. BROWN, )
Defendants )
14655
14656 So. Cal. Edison v. Lynch
--------------------------------------------------------------------------------
SOUTHERN CALIFORNIA EDISON )
COMPANY, )
Plaintiff-Appellee, )
CALIFORNIA MANUFACTURERS AND )
TECHNOLOGY ASSN., ) No. 01-57020
Intervenor-Appellant, ) D.C. No.
v. ) CV-00-12056-RSWL
LORETTA M. LYNCH; HENRY M. ) OPINION
DUQUE; RICHARD A. BILAS; CARL )
W. WOOD; GEOFFREY F. BROWN, )
in their official capacities as )
Commissioner of the California )
Public Utilities Commission, )
Defendants-Appellees. )
Appeal from the United States District Court
for the Central District of California
Ronald S.W. Lew, District Judge, Presiding
Argued and Submitted
March 4, 2002--Pasadena, California
Filed September 23, 2002
Before: James R. Browning, Sidney R. Thomas and
Johnnie B. Rawlinson, Circuit Judges.
Opinion by Judge Thomas
14660 SO. CAL. EDISON v. LYNCH
--------------------------------------------------------------------------------
COUNSEL
Robert E. Finkelstein and Randolph L. Wu, The Utility
Reform Network, San Francisco, California; Michael J.
Strumwasser, Frederic D. Woocher, Johanna R. Shargel, Daniel
J. Sharfstein, Strumwasser & Woocher LLP, Santa Monica,
California; for the defendant-intervenor-appellant.
Terry J. Houlihan and Geoffrey T. Holtz, McCutchen, Doyle,
Brown & Enersen, LLP, San Francisco, California; John C.
Morrissey and Brian I. Cheng, McCutchen, Doyle, Brown &
Enersen, LLP, Los Angeles; California; for the intervenor-appellant
Reliant Energy Services, Inc.
Bryan A. Merryman and Lisa A. Cottle, White & Case LLP,
Los Angeles, California, for the intervenor-appellant Mirant
Americas Energy Marketing, LP.
Keith R. McCrea and Jim Bushee, Sutherland Asbill & Brennan
LLP, Washington, D.C., for the intervenor-appellant California
Manufacturers and Technology Association.
Gary M. Cohen, Arocles Aguilar, Harvey Y. Morris, and Carrie
G. Pratt, Public Utilities Commission of the State of California,
San Francisco, California, for the defendants-appellees.
Stephen Pickett, Barbara Reeves, and Kris G. Vyas, Southern
California Edison Company, Rosemead, California; Ronald L.
Olson, John W. Spiegel, and Henry Weissmann, Munger, Tolles
& Olson LLP, Los Angeles, California; for the plaintiff-appellee.
--------------------------------------------------------------------------------
OPINION
THOMAS, Circuit Judge:
In this appeal, we review the district court's order entering
a stipulated judgment in an action brought by Southern Cali-
SO. CAL. EDISON v. LYNCH 14661
--------------------------------------------------------------------------------
fornia Edison Co. ("SoCal Edison"), an electric public utility
that provides retail electric service in Southern California,
against the Commissioners ("Commissioners") of the California
Public Utilities Commission ("the Commission"), which
regulates the rates, practices and services of SoCal Edison and
other California public utilities. We affirm the judgment of
the district court in part and certify questions based on California
state law to the Supreme Court of California.
I
The origins of the present controversy began in 1996 with
the passage of Assembly Bill 1890 ("AB 1890"), which significantly
restructured California's power industry. Act of
September 23, 1996, 1996 Cal. Legis. Serv. 854, codified in
Cal. Pub. Util. Codess.ss.330-398.5. The idea animating AB
1890 was that deregulation would foster competition in electrical
generation, which would ultimately provide better service
and reduce the price of electricity to consumers. See
generally Cal. Pub. Util. Codess.330.1 Under prior law, the
Commission set the retail electricity rates charged by utilities
providing service in exclusive service territories. Id. at
ss.330(d). These regulated rates included reimbursement for
the cost of constructing power plants and contractual obligations
for the provision of electrical service. Id. atss.330(q).
The goal of AB 1890 was to create a deregulated market in
which price would be established by competition and consumers
could select their electrical power supplier.
The legislature recognized that the transition from a regulated
environment to a competitive market had the potential
to leave the utilities with unrecoverable, or "stranded" costs.
In general terms, stranded costs are those costs an electrical
supplier incurs in anticipation of serving customers that later
become unrecoverable because the supplier either cannot
263370
|
SCE
As referenced in this Appeal from the United States District Court for the Central District of California:
SOUTHERN CALIFORNIA EDISON )
CO – FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
SOUTHERN CALIFORNIA EDISON )
CO MPANY, )
Plaintiff-Appellee, )
v. )
LORETTA M. LYNCH; HENRY M. )
DUQUE; RICHARD A. BILAS; CARL ) No. 01-56879
W. WOOD; GEOFFREY F. BROWN, ) D.
_____________
SOUTHERN CALIFORNIA EDISON )
CO – F. BROWN, ) D.C. No.
Commissioners of California ) CV-00-12056-RSWL
Public Utilities Commission, )
Defendants-Appellees. )
UTILITY REFORM NETWORK, )
Defendant-intervenor- )
Appellant.)
SOUTHERN CALIFORNIA EDISON )
CO MPANY, )
Plaintiff-Appellee, )
RELIANT ENERGY SERVICES, INC.; )
MIRANT AMERICAS ENERGY ) No. 01-56993
MARKETING, LP, ) D.C. No.
Intervenors-Appellants, ) CV-00-12056-
_____________
SOUTHERN CALIFORNIA EDISON )
CO – LORETTA M. LYNCH; HENRY M. )
DUQUE; RICHARD A. BILAS; CARL )
W. WOOD; GEOFFREY F. BROWN, )
Defendants )
14655
14656 So. Cal. Edison v. Lynch
--------------------------------------------------------------------------------
SOUTHERN CALIFORNIA EDISON )
CO MPANY, )
Plaintiff-Appellee, )
CALIFORNIA MANUFACTURERS AND )
TECHNOLOGY ASSN., ) No. 01-57020
Intervenor-Appellant, ) D.C. No.
v. ) CV-00-12056-RSWL
LORETTA M.
_____________
Southern
California Edison Co – Public Utilities Commission of the State of California,
San Francisco, California, for the defendants-appellees.
Stephen Pickett, Barbara Reeves, and Kris G. Vyas, Southern
California Edison Co mpany, Rosemead, California; Ronald L.
Olson, John W. Spiegel, and Henry Weissmann, Munger, Tolles
& Olson LLP, Los Angeles, California; for the plaintiff-appellee.
--------------------------------------------------------------------------------
_____________
dt 170036
;
 Sutherland
As referenced in this Appeal from the United States District Court for the Central District of California:
Sutherland Asbill – A. Cottle, White & Case LLP,
Los Angeles, California, for the intervenor-appellant Mirant
Americas Energy Marketing, LP.
Keith R. McCrea and Jim Bushee, Sutherland Asbill & Brennan
LLP, Washington, D.C., for the intervenor-appellant California
Manufacturers and Technology Association.
Gary M. Cohen, Arocles Aguilar, Harvey Y. Morris,
_____________
dt 170434
;
Loretta M. Lynch;
| Henry M. Duque;
Richard A. Bilas;
More... |
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| 2002 |
Appeal from the United States District Court For the Central District of California
Appeal from the United States District Court For the Central District of California (13K)
Doc #263371: Click preview link for longer preview.
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
SOUTHERN CALIFORNIA EDISON )
COMPANY, )
Plaintiff-Appellee, )
v. )
)
LORETTA M. LYNCH; HENRY M. Duque; ) No. 01-56879
Richard A. Bilas; Carl W. Wood; ) D.C. No.
Geoffrey F. Brown,Commissioners ) CV-00-12056-RSWL
of California Public Utilities Commission, )
Defendants-Appelees. )
)
UTILITY REFORM NETWORK, )
Defendant-intervenor- )
Appellant. )
---------------------------------------
SOUTHERN CALIFORNIA EDISON )
COMPANY, )
Plaintiff-Appellee, )
RELIANT ENERGY SERVICES, INC.; )
Mirant Americas Energy ) No. 01-56993
Marketing, LP, ) D.C. No.
Intervenors-Appelants ) CV-00-12056-RSWL
v. )
LORETTA M. LYNCH; HENRY M. )
DUQUE; RICHARD A. BILAS; CARL )
W. WOOD; GEOFFREY F. BROWN, )
Defendants )
---------------------------------------
14646 SO. CAL. EDISON v. LYNCH
------------------------------------------------------------------------
SOUTHERN CALIFORNIA EDISON )
COMPANY, )
Plaintiff-Appellee, )
)
CALIFORNIA MANUFACTURERS AND )
TECHNOLOGY ASSN., ) No. 01-57020
Intervenor-Appellant, ) D.C. No.
v. ) CV-00-12056-RSWL
LORETTA M. LYNCH; HENRY M. )
ORDER DUQUE; RICHARD A. BILAS; )
CARLW. WOOD; GEOFFREY F. BROWN, ) ORDER
in their official capacities as )
Commissioner of the California )
Public Utilities Commission, )
Defendants-Appellees.)
---------------------------------------
Appeal from the United States District Court
for the Central District of California
Ronald S.W. Lew, District Judge, Presiding
Argued and Submitted
March 4, 2002--Pasadena, California
Filed September 23, 2002
Before: James R. Browning, Sidney R. Thomas and
Johnnie B. Rawlinson, Circuit Judges.
------------------------------------------------------------------------------------------------------
ORDER
We respectfully certify the following questions to the Supreme Court of California all as set forth in
the attached request:
14647 SO. CAL. EDISON v. LYNCH
------------------------------------------------------------------------
1. Does the stipulated judgment approved by the district court violatess.368 of Assembly Bill 1890
(Act of September 23, 1996, 1996 Cal. Legis. Serv. 854, codified in Cal. Pub. Util. Codess.ss.
330-398.5)?
2. Do the procedures employed in entering the stipulated judgment violate the Bagley-Keene Open
Meeting Act, Cal. Gov't Codess.ss.11120- 11132.5?
3. Does the stipulated judgment violatess.454 of the Public Utilities Code by altering utility
rates without a public hearing and the issuance of findings?
We stay all further proceedings in this case in this Court and the district court pending
receipt of the answers to the certified questions. If the Supreme Court of California declines
certification, we will resolve the issues according to our perception of California law.
The Clerk of the Court is hereby directed to transmit, under the official seal of the Ninth
Circuit, a copy of this order, the attached Request for Certification, and a copy of the opinion
filed concomitantly with this Order. The parties and amici are directed to file with the Supreme
Court of California copies of all briefs and excerpts of record submitted to this Court. This case
is withdrawn from submission until further order of the Court.
REQUEST FOR CERTIFICATION DIRECTED TO THE
SUPREME COURT OF CALIFORNIA
Pursuant to Rule 29.5 of the California Rules of Court, a panel of the United States Court of Appeals
for the Ninth Circuit, before which this appeal is pending, hereby certifies to the Supreme Court of
California the previously identified
263371
|
SCE
As referenced in this Appeal from the United States District Court For the Central District of California:
SOUTHERN CALIFORNIA EDISON )
CO – FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
SOUTHERN CALIFORNIA EDISON )
CO MPANY, )
Plaintiff-Appellee, )
v. )
)
LORETTA M. LYNCH; HENRY M. Duque; ) No. 01-56879
Richard A. Bilas; Carl W. Wood; ) D.C. No.
Geoffrey
_____________
SOUTHERN CALIFORNIA EDISON )
CO – C. No.
Geoffrey F. Brown,Commissioners ) CV-00-12056-RSWL
of California Public Utilities Commission, )
Defendants-Appelees. )
)
UTILITY REFORM NETWORK, )
Defendant-intervenor- )
Appellant. )
---------------------------------------
SOUTHERN CALIFORNIA EDISON )
CO MPANY, )
Plaintiff-Appellee, )
RELIANT ENERGY SERVICES, INC.; )
Mirant Americas Energy ) No. 01-56993
Marketing, LP, ) D.C. No.
Intervenors-Appelants ) CV-00-12056-
_____________
SOUTHERN CALIFORNIA EDISON )
CO – v. )
LORETTA M. LYNCH; HENRY M. )
DUQUE; RICHARD A. BILAS; CARL )
W. WOOD; GEOFFREY F. BROWN, )
Defendants )
---------------------------------------
14646 SO. CAL. EDISON v. LYNCH
------------------------------------------------------------------------
SOUTHERN CALIFORNIA EDISON )
CO MPANY, )
Plaintiff-Appellee, )
)
CALIFORNIA MANUFACTURERS AND )
TECHNOLOGY ASSN., ) No. 01-57020
Intervenor-Appellant, ) D.C. No.
v. ) CV-00-12056-RSWL
LORETTA M.
_____________
SOUTHERN CALIFORNIA EDISON )
CO – the
issues should not restrict the Court's consideration of the issues.
I. Caption of the Case
The caption of the case is:
SOUTHERN CALIFORNIA EDISON )
CO MPANY, )
Plaintiff-Appellee, )
v. ) No. 01-56879
LORETTA M. LYNCH; HENRY M. DUQUE; ) D.C. No.
Richard A. Bilas; Carl W. Wood; ) CV-
_____________
SOUTHERN CALIFORNIA EDISON )
CO – Geoffrey F. Brown, )
Commissioners of California )
Public Utilities Commission, )
Defendants-Appellees. )
)
UTILITY REFORM NETWORK, )
Defendant-intervenor- )
Appellant. )
14649 SO. CAL. EDISON v. LYNCH
------------------------------------------------------------------
SOUTHERN CALIFORNIA EDISON )
CO MPANY, )
Plaintiff-Appellee, )
v. ) No. 01-56993
Reliant Energy Services, Inc.; ) D.C. No.
Mirant Americas Energy ) CV-00-12056-RSWL
Marketing, LP. )
_____________
dt 170037
;
Sutherland
As referenced in this Appeal from the United States District Court For the Central District of California:
Sutherland Asbill – A. Cottle, White & Case LLP, Los Angeles, California, for the
intervenor-appellant Mirant Americas Energy Marketing, LP.
Keith R. McCrea and Jim Bushee, Sutherland Asbill & Brennan LLP, Washington, D.C., for the
intervenor-appellant California Manufacturers and Technology Association.
II. Questions of Law to be Answered
1.
_____________
dt 170435
;
Loretta M. Lynch;
| Henry M. Duque;
Richard A. Bilas;
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| 2001 |
Court Order
Court Order (38K)
Doc #263548: Click preview link for longer preview.
SUPREME COURT OF THE STATE OF NEW YORK
COUNTY OF NEW YORK
PUBLIC SERVICE COMPANY OF NEW
MEXICO, HVOLT ENTERPRISES,INC., HVK,
INC., and HVNM, INC.,
Plaintiffs, Index No.
vs. COMPLAINT
---------
WESTERN RESOURCES, INC.,
Defendant.
Plaintiffs, Public Service Company of New Mexico ("PNM"), HVOLT Enterprises,
Inc. ("HVOLT"), HVK, Inc. ("HVK"), and HVNM, Inc. ("HVNM" and, together with
PNM, HVOLT, and HVK, the "Plaintiffs"), by their counsel Pillsbury Winthrop LLP,
for their complaint allege as follows:
INTRODUCTION
------------
1. This action seeks money damages for breach of contract and several
declarations, pursuant to Section 3001 of the Civil Practice Law and Rules,
construing the meaning and scope of an agreement among Plaintiffs and defendant
Western Resources, Inc. ("WRI"). In the Agreement and Plan of Restructuring and
Merger among WRI, HVOLT, PNM, HVK and HVNM dated as of November 8, 2000 (the
"Transaction Agreement"), the parties agreed to a multi-step transaction that
would result in (a) WRI's non-utility assets being "split-off" to WRI's
shareholders; (b) the combination of PNM (through a holding company in the
process of being formed) with HVOLT; and (c) the combination of WRI with HVOLT.
As a result of these steps, if successful, PNM and the utility assets of WRI
would be owned by a common parent - HVOLT - and the former shareholders of PNM
and WRI would be shareholders of HVOLT. The first step in this process requires
the split-off of the non-utility businesses, including certain non-utility
assets, of WRI, all of which would be owned by Westar Industries, Inc.
("Westar"), a direct, wholly-owned subsidiary of WRI, in the form of a share
exchange with existing WRI shareholders. The split-off is a condition precedent
to PNM's obligations to complete the transaction.
2. The State Corporation Commission of the State of Kansas (the "KCC") has
asserted jurisdiction over the split-off and has ruled, in two separate orders,
that the split-off is unlawful and cannot be completed with or without the other
transactions set forth in the Transaction Agreement. These orders prevent WRI
from satisfying the conditions precedent to PNM's obligation to complete the
transaction that the split-off occur and that there be no order enjoining or
prohibiting the transaction. The KCC also rejected WRI's request for a rate
increase and, instead, ordered a reduction in WRI's electric rates. Such
reduction in WRI rates would have a "material adverse effect" on the combined
enterprise, entitling PNM and HVOLT to terminate the Transaction Agreement. The
5
{PAGE}
KCC orders have also resulted in the breach of the representation and warranty
made by WRI to HVOLT that the split-off did not require regulatory approval.
3. Following the KCC orders prohibiting the split-off, WRI has proposed
alternatives to the split-off, none of which are permitted by the Transaction
Agreement. WRI provided information to PNM about only one of those alternatives,
which would result in dilution of the interests of PNM shareholders. WRI
maintains that this alternative is permitted under the Transaction Agreement,
does not require PNM consent, and entitles WRI shareholders to additional shares
of HVOLT. PNM does not agree with WRI.
4. As a result of these breaches and failures of condition precedent, PNM
and HVOLT seek:
o A declaratory judgment that the condition precedent requiring the
split-off cannot be satisfied and that, as a result, PNM is not
obligated to perform its obligations under the Transaction Agreement.
o A declaratory judgment that the condition precedent requiring that
there be no order enjoining or otherwise prohibiting the consummation
of the transactions contemplated in the Transaction Agreement cannot be
satisfied and that, as a result, PNM is not obligated to perform its
obligations under the Transaction Agreement.
o A declaratory judgment that any alternatives to the split-off that are
materially different from the Transaction Agreement cannot satisfy the
condition precedent that the split-off occur prior to the mergers.
o A declaratory judgment that any alternatives to the split-off that are
materially different from the Transaction Agreement do not entitle WRI
shareholders to additional shares of HVOLT.
o A declaratory judgment that HVOLT is not obligated to effect the
transaction because of the material adverse effect of the KCC rate
orders.
o A declaratory judgment that the termination date of the Transaction
Agreement is December 31, 2001.
o A declaratory judgment that, as a result of the KCC orders denying WRI
the ability to complete the split-off, PNM is not obligated to seek
shareholder and KCC approval of the Transaction Agreement.
o Damages resulting from WRI's breach of its representation and warranty
to HVOLT that the split-off did not require regulatory approval.
PARTIES, JURISDICTION AND VENUE
-------------------------------
5. Plaintiff PNM is a New Mexico corporation, with its principal place of
business at Alvarado Square, Albuquerque, New Mexico 87158. PNM is a
certificated public utility company regulated by the New Mexico Public
Regulation Commission and is primarily engaged in the generation, transmission,
distribution and sale of electricity and in the transmission, distribution and
sale of natural gas.
263548
|
HVOLT
As referenced in this Court Order:
HVOLT ENTERPRISES, – 1
{TEXT}
Exhibit 99.1
SUPREME COURT OF THE STATE OF NEW YORK
COUNTY OF NEW YORK
PUBLIC SERVICE COMPANY OF NEW
MEXICO, HVOLT ENTERPRISES, INC., HVK,
INC., and HVNM, INC.,
Plaintiffs, Index No.
vs. COMPLAINT
---------
WESTERN RESOURCES, INC.,
Defendant.
Plaintiffs, Public Service Company of New Mexico ("PNM"),
_____________
HVOLT Enterprises, – INC., HVK,
INC., and HVNM, INC.,
Plaintiffs, Index No.
vs. COMPLAINT
---------
WESTERN RESOURCES, INC.,
Defendant.
Plaintiffs, Public Service Company of New Mexico ("PNM"), HVOLT Enterprises,
Inc. ("HVOLT"), HVK, Inc. ("HVK"), and HVNM, Inc. ("HVNM" and, together with
PNM, HVOLT, and HVK, the "Plaintiffs"), by their counsel Pillsbury
_____________
HVOLT
Enterprises, – 5 of the Transaction
Agreement as a result of the Split-Off and Reconsideration Orders.
WHEREFORE, Plaintiffs Public Service Company of New Mexico, HVOLT
Enterprises, Inc., HVK, Inc. and HVNM, Inc. demand:
a. a declaratory judgment that the conditions precedent set forth in
Sections 8.1(e)
_____________
dt 143348
;
ONEOK
As referenced in this Court Order:
ONEOK, Inc. – has
interests in non-utility businesses, such as an 85 percent interest in
Protection One, Inc., a 100 percent interest in Protection One Europe, and a 45
percent interest in ONEOK, Inc.
10. This action arises out of a contract covering not less than $1 million,
containing a provision choosing New York law to govern and a provision in which
the
_____________
dt 1501225
;
ONEOK
As referenced in this Court Order:
ONEOK, Inc. – has
interests in non-utility businesses, such as an 85 percent interest in
Protection One, Inc., a 100 percent interest in Protection One Europe, and a 45
percent interest in ONEOK, Inc.
10. This action arises out of a contract covering not less than $1 million,
containing a provision choosing New York law to govern and a provision in which
the
_____________
dt 1501281
;
|
Pillsbury
As referenced in this Court Order:
Pillsbury Winthrop – HVOLT Enterprises,
Inc. ("HVOLT"), HVK, Inc. ("HVK"), and HVNM, Inc. ("HVNM" and, together with
PNM, HVOLT, and HVK, the "Plaintiffs"), by their counsel Pillsbury Winthrop LLP,
for their complaint allege as follows:
INTRODUCTION
------------
1. This action seeks money damages for breach of contract and several
declarations, pursuant
_____________
PILLSBURY WINTHROP – h. granting such other and further relief as the Court may deem just and
proper.
Dated: New York, New York
October 12, 2001
PILLSBURY WINTHROP LLP
-----------------------------
E. Leo Milonas
David M. Lindley
Leo T. Crowley
One Battery Park Plaza
New York, New York 10004
212.858.1000
_____________
dt 170946
;
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Supplemental Order
Supplemental Order (18K)
Doc #263555: This document is immediately available for purchase, but does not have a preview available for viewing.
{DOCUMENT}
{TYPE}EX-99
{SEQUENCE}2
{FILENAME}f8k_exh99.txt
{DESCRIPTION}EXHIBIT 99.1 5-25-2001 FILING
{TEXT}
EXHIBIT 99.1
THE STATE CORPORATION COMMISSION
OF THE STATE OF KANSAS
Before Commissioners: John Wine, Chair
Cynthia L. Claus
Brian J. Moline
In the Matter of the Investigation of Actions of )
Western Resources, Inc. to Separate its ) Docket No. Ol-WSRE-949-GIE
Jurisdictional Electric Public Utility Business )
from its Unregulated Businesses. )
SUPPLEMENTAL ORDER
For the reasons stated below, the State Corporation Commission of the
State of Kansas ("Commission") supplements the May 8, 2001 Order Initiating
Investigation and declares that the Asset Allocation and Separation Agreement
("Asset Allocation Agreement") between Western Resources, Inc. ("WRY) and its
affiliate, Westar Industries, Inc. ("Westar"), and amendments thereto, as
contained in the S-l Registration Statement No. 333-47424 ("Registration
Statement") pending before the Securities and Exchange Comrnission ("SEC"), is
of no force and legal effect because WRI has not obtained Commission approval as
required by Kansas law. Further, the Commission orders WRI and each subsidiary
of WRI to take no action, directly or indirectly, that would increase the share
of debt in the capital structure in the electric business of WRI ("Western
Resources Electric Business" or "WREB"), including the sale of rights to
purchase Westar common stock in the rights offering described in the
Registration Statement. Finally, the Commission will hold a hearing on June
14, 200l at 9:00 a.m. on various matters relating to this order.
I. Introduction and Overview
1. On May 8, 2001, the Commission entered its Order Initiating
Investigation ("OII") into whether the participation by WRI and its affiliates
in the transactions and relationships described in said order, and any other
transactions or relationships which may emerge from the investigation, is
consistent with Kansas law, including the statutory obligations of WREB (WRI's
electric division, KPL, and its wholly-owned subsidiary KG&E) to provide
efficient and reliable service to Kansas customers at just and reasonable rates.
In the OII, the Commission described the public information concerning actions
and plans of WRI to restructure the relationship between WRI's electric
{PAGE}
businesses and its unregulated businesses, including an allocation of debt and
equity between WRI and Westar, and including a rights offering under which WRI's
shareholders could purchase shares of Westar, that provided the factual basis to
warrant such investigation. The Commission required WRI and Westar to file a
verified statement explaining these transactions within 60 days from May 8,200l.
2. On May 18, 2001, Westar filed Amendment No. 3 to the Registration
Statement on Form S-l with the SEC. On the same date, WRI filed these documents
with the Commission in accordance with the Commission's May 8, 200l Order
Initiating Investigation. These documents contained a letter signed by Mr. Paul
Geist, President of Westar, to the SEC. The Geist letter, written on behalf of
Westar, requested the SEC to accelerate the effective date of its Registration
Statement to May 21, 2001, so as to allow Westar to proceed immediately with its
proposed rights offering. No reason or justification for the accelerated
treatment was provided in the letter despite the pending Commission
investigation.
3. The rights offering incorporates an Asset Allocation and Separation
Agreement ("Asset Allocation Agreement") between Westar and WRI, as more fully
described in paragraph 4 of the OII. If WRI implements its Asset Allocation
Agreement, WRI's capital structure would reflect substantially all of WRI's
pre-restructuring debt, including debt incurred for private business ventures of
WFU and not for purposes of acquisition of "used and useful" electric utility
assets. The resulting capital structure for WREB may impair WRI's ability to
provide sufficient and efficient electric service at just and reasonable rates
and fulfill its public service duties and obligations to ratepayers.
4. The Geist letter to the SEC evidences Westar's and WRI's intent to
proceed with the proposed rights offering without regard to the outcome of the
Commission's investigation and review process established in this docket, and
without regard to the possible practical difficulties of restoring WRI's
financial condition, particularly its capital structure, to its
pre-restructuring state should the Commission ultimately determine that WRI's
actions in the restructuring transactions are inconsistent with its public
service duties and obligations to ratepayers.
2
{PAGE}
5. The concerns set forth in the OII, along with continuing problems in
WRI's unregulated investment in Protection One as noted in said order, as well
as the publicly stated intent to carry out structural changes regardless of the
existing Commission order, require immediate action set forth herein to prevent
irreparable harm to the public interest and safety.
6. For the reasons discussed below, the Commission (a) declares that
the Asset Allocation Agreement, and any amendments thereto, are of no legal
effect unless and until approved by the Commission; and (b) prohibits WRI from
causing Westar to complete the rights offering. The Commission will hold a
hearing on June 12, 200l at 9:00 a.m. to (a) afford WRI the opportunity to
explain why the requirements of this supplemental order should not be continued
in effect, (b) consider whether the requirements of this supplemental order
should be extended for an additional period of time or made permanent, and (c)
receive from other interested persons recommendations on how the Commission
should proceed with the investigation required in this docket.
II. The Asset Allocation Agreement Is of No Force and Legal Effect Because WRI
Has not Obtained the Commission Approval Required by Kansas Statutes.
7. On November 8, 2000, Westar and WRI entered into an Asset Allocation
Agreement. On May 2,2001, Westar and WRI entered into Amendment 1 to Asset
Allocation and Separation Agreement. The Asset Allocation Agreement is the
mechanism which initiates WRI's plan to separate the unregulated investments of
Westar from WREB, the traditional electric business, and to allocate debt and
equity between the two companies according to a schedule attached to Asset
Allocation Agreement.
8. Under two separate statutory provisions, WFU had an obligation to
obtain Commission approval before entering into the Asset Allocation Agreement.
First, any transaction that constitutes a "contract or agreement with reference
to or affecting" the certificate of convenience and necessity is not valid until
it is approved by the Commission pursuant to K.S.A. 2000 Supp. 66-136. A
reasonable capital structure is necessary to carry out a utility's obligation
under its certificate of convenience and necessity. By substantially affecting
WFUZB's capital structure, the Asset Allocation Agreement, and the rights
offering, will affect WRI's ability to carry out the public utility
responsibilities required by and associated with WREB's certificates of
convenience.
3
{PAGE}
9. Second, because WRI holds more than 10 percent of Westar's stock,
the relationship between the two companies is subject to the Commission's
jurisdiction under K.S.A. 66-1401, et seq., for the purposes of that act. Any
"management . . . contract" or similar agreement entered into between the
affiliate and the public utility cannot be "effective" unless it is first filed
with the Commission. Such contracts or agreements, after being filed, can be
263555
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Western
As referenced in this Supplemental Order:
Western Resources, Inc – STATE OF KANSAS
Before Commissioners: John Wine, Chair
Cynthia L. Claus
Brian J. Moline
In the Matter of the Investigation of Actions of )
Western Resources, Inc . to Separate its ) Docket No. Ol-WSRE-949-GIE
Jurisdictional Electric Public Utility Business )
from its Unregulated Businesses. )
SUPPLEMENTAL ORDER
For the
_____________
Western Resources, Inc – Kansas ("Commission") supplements the May 8, 2001 Order Initiating
Investigation and declares that the Asset Allocation and Separation Agreement
("Asset Allocation Agreement") between Western Resources, Inc . ("WRY) and its
affiliate, Westar Industries, Inc. ("Westar"), and amendments thereto, as
contained in the S-l Registration Statement No. 333-47424 ("
_____________
Western Resources, Inc – served upon counsel for WRI and Westar. The
Commission records indicate that the general counsel of WRI and Westar is
Richard D. Terrill, Western Resources, Inc ., 818 Kansas Avenue, Topeka,
Kansas, 66612.
(F) The Commission retains jurisdiction over the subject matter and the
parties for the purpose of
_____________
dt 143339
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Full Doc
| 2002 |
Stipulated Facts and Remedies
Stipulated Facts and Remedies (18K)
Doc #263613: Click preview link for longer preview.
STIPULATED FACTS AND REMEDIES
A.
The Signatories stipulate to the following facts and recitations of law. FERC Staff asserts that some or all of the legal provisions may have been violated by EPE. EPE asserts that it has not violated any of these provisions. In the interest of settlement, the Signatories are making no determination regarding, and are requesting no Commission determination regarding, violation of these provisions.
1.
Under Orders No. 888 and 889, El Paso Electric Company (EPE) was required to separate its transmission and wholesale marketing operations on January 3, 1997.
2.
At that time, EPE had difficulty hiring employees to serve as marketers in the new division. As a result, EPE decided that, rather than hire a full-time staff to perform the function, an alliance with a large power marketer would best serve the Companys needs. After discussing the issue with several such marketers, EPE decided to enter into an agreement with Enron Capital and Trade, Inc. (ECT or Enron).
3.
On January 16, 1997, the parties executed a Power Consulting Services Agreement. The PCSA stated that ECT would serve as EPEs consultant to advise EPE with respect to certain aspects of its wholesale and retail power supply obligations. The PCSA created three primary responsibilities for Enron to perform:
a.
Enron would perform the traditional economic dispatch analysis to minimize the marginal cost of serving the total electric load of EPE.
b.
During normal business hours defined as from 7:00 a.m. to 3:00 p.m. or 7:30 a.m. to 3:30 p.m. Enron would make recommendations regarding fuel and electricity purchases and sales to EPEs power supply group headed by Pedro Serrano, Jr. Mr. Serrano served as Assistant Vice President of Resource Planning and Contracts for EPE. EPE retained responsibility for conducting prescheduling activities, including volume and pricing parameters. Enron assisted in performing prescheduling functions for EPE, including some day-ahead preschedule sales.
c.
During non-business hours defined as from 3:00 p.m. to 7:00 a.m. or 3:30 p.m. to 7:30 a.m. ECT would make real-time changes to energy schedules after contacting EPEs dispatchers. EPEs dispatchers could reject such schedules for reliability reasons. In practice, Enron operated
263613
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El Paso Electric
As referenced in this Stipulated Facts and Remedies:
El Paso Electric Co – are making no determination regarding, and are requesting no Commission determination regarding, violation of these provisions.
1.
Under Orders No. 888 and 889, El Paso Electric Co mpany (EPE) was required to separate its transmission and wholesale marketing operations on January 3, 1997.
2.
At that time, EPE had difficulty
_____________
EL PASO ELECTRIC CO – PAGE TO
STIPULATED FACTS AND REMEDIES
COMMISSION TRIAL STAFF
By:
/s/ Joel M. Cockrell
Title:
Commission Trial Staff
Date:
December 3, 2002
9a
EL PASO ELECTRIC CO MPANY SIGNATURE PAGE TO
STIPULATED FACTS AND REMEDIES
EL PASO ELECTRIC COMPANY
By:
/s/ Walter Demond
Title:
Attorney for El Paso Electric Company
_____________
EL PASO ELECTRIC CO – Joel M. Cockrell
Title:
Commission Trial Staff
Date:
December 3, 2002
9a
EL PASO ELECTRIC COMPANY SIGNATURE PAGE TO
STIPULATED FACTS AND REMEDIES
EL PASO ELECTRIC CO MPANY
By:
/s/ Walter Demond
Title:
Attorney for El Paso Electric Company
Date:
December 3, 2002
9b
_____________
El Paso Electric Co – 9a
EL PASO ELECTRIC COMPANY SIGNATURE PAGE TO
STIPULATED FACTS AND REMEDIES
EL PASO ELECTRIC COMPANY
By:
/s/ Walter Demond
Title:
Attorney for El Paso Electric Co mpany
Date:
December 3, 2002
9b
_____________
dt 169891
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| Full Doc
| 2002 |
Final Order
Final Order (5K)
Doc #263631: This document is immediately available for purchase, but does not have a preview available for viewing.
El Paso Electric Co
Prepared by R.R. Donnelley Financial -- Final Order
BEFORE THE NEW MEXICO PUBLIC REGULATION COMMISSION
IN THE MATTER OF THE APPLICATION OF EL PASO ELECTRIC COMPANY FOR CHANGES TO ITS RATES AND CHARGES PURSUANT TO NMPRC RULE 530 AND RULE 550,
EL PASO ELECTRIC COMPANY,
Applicant.
Utility Case No. 3606
FINAL ORDER
THIS MATTER comes before the New Mexico Public Regulation Commission (?Commission? or ?NMPRC?) upon the Certification of Stipulation issued by Hearing . . .
263631
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El Paso Electric
As referenced in this Final Order:
EL PASO ELECTRIC CO – Order
EX-99.05 7 dex9905.htm FINAL ORDER
BEFORE THE NEW MEXICO PUBLIC REGULATION COMMISSION
IN THE MATTER OF THE APPLICATION OF EL PASO ELECTRIC CO MPANY FOR CHANGES TO ITS RATES AND CHARGES PURSUANT TO NMPRC RULE 530 AND RULE 550,
EL PASO ELECTRIC COMPANY,
Applicant.
Utility Case
_____________
EL PASO ELECTRIC CO – OF THE APPLICATION OF EL PASO ELECTRIC COMPANY FOR CHANGES TO ITS RATES AND CHARGES PURSUANT TO NMPRC RULE 530 AND RULE 550,
EL PASO ELECTRIC CO MPANY,
Applicant.
Utility Case No. 3606
FINAL ORDER
THIS MATTER comes before the New Mexico Public Regulation Commission (Commission or NMPRC) upon the
_____________
El Paso Electric Co – issued by Hearing Examiner Michael Barlow in this matter on October 23, 2001, and upon the Stipulation filed on June 6, 2001 , by El Paso Electric Co mpany (EPE), the Attorney General of New Mexico (AG) the New Mexico Industrial Energy Consumers (NMIEC), the Department of Defense and the New
_____________
dt 169905
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