File No. 70-9967
As filed with the Securities and Exchange Commission on December 21, 2001
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
AMENDMENT NO. 2
TO
FORM U-1 APPLICATION-DECLARATION
UNDER
THE PUBLIC UTILITY HOLDING COMPANY ACT OF 1935
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DOMINION RESOURCES, INC.
120 Tredegar Street
Richmond, VA 23219
(a registered holding company and
the parent of the other parties)
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DOMINION ENERGY, INC.
ELWOOD ENERGY, LLC
DOMINION RESERVES, INC.
DOMINION OHIO ES, INC.
DOMINION RESOURCES SERVICES, INC.
DOMINION ALLIANCE HOLDING, INC.
ELWOOD II HOLDINGS, LLC
ELWOOD III HOLDINGS, LLC
KINCAID GENERATION, LLC
DT SERVICES, INC.
DOMINION METERING SERVICES, INC.
James F. Stutts
Vice President and General Counsel
Dominion Resources, Inc.
120 Tredegar Street
Richmond, VA 23219
(Name and address of agent for service)
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The Commission is also requested to send copies
of any communication in connection with this matter to:
Norbert F. Chandler, Esq.
Managing Counsel
Dominion Resources Services, Inc.
Dominion Tower, 625 Liberty Avenue
Pittsburgh, PA 15222
File No. 70-9967
AMENDMENT NO. 2
TO
APPLICATION-DECLARATION
UNDER
SECTIONS 12(b) and 12(f)
AND
RULES 43, 45 AND 54
OF
THE PUBLIC UTILITY HOLDING COMPANY ACT OF 1935
FOR APPROVAL OF
DOMINION MONEY POOL
Item 1. Description of Proposed Transactions.
This Application-Declaration of Dominion Resources, Inc. ("DRI"), a
registered holding company under the Public Utility Holding Company Act of
1935 (the "Act"), seeks authority for the formation and operation of a
money pool for itself and its nonutility subsidiaries ("Subsidiaries")
excluding Consolidated Natural Gas Company ("CNG") and its subsidiaries.
The Subsidiaries consist of the following companies: Dominion Energy, Inc.,
Elwood Energy, LLC, Dominion Reserves, Inc., Dominion Ohio ES, Inc.,
Dominion Resources Services, Inc., Dominion Alliance Holdings, Inc.,
Elwood II Holdings, LLC, Elwood III Holdings, LLC, Kincaid Generation, LLC,
DT Services, Inc. and Dominion Metering Services, Inc.
On January 28, 2000, CNG was merged into a wholly-owned subsidiary of
DRI. This merger ("Merger") was approved by the Securities and Exchange
Commission (the "Commission") on December 15, 1999, HCAR No. 27113 (the
"Merger Order"). Management of DRI and its subsidiaries have been
integrating operations and financing activities of DRI and CNG subsequent
to the Merger.
By orders dated June 12 and July 16, 1986 (HCAR Nos. 24128 and 24150),
as amended by orders dated May 27, 1987 (HCAR No. 24399), February 14, 1990
(HCAR No. 25040), May 13, 1991 (HCAR No. 25311), April 8, 1994 (HCAR No. 26021),
and July 18, 1997 (HCAR No. 26742), the Commission permitted the application-
declaration of CNG and its subsidiaries to become effective, thereby
authorizing the establishment of the Consolidated Natural Gas System Money
Pool ("CNG Money Pool"). Consolidated Natural Gas Service Company, Inc. ("CNG
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Services")until January 1, 2001 both administered and participated in the
CNG Money Pool. The CNG Money Pool, subsequent to the merger of CNG Services
into Dominion Resources Services, Inc. ("DRI Services") on January 1, 2001, is
now administered by DRI Services. After satisfaction of the borrowing needs
of the CNG subsidiary companies authorized to participate in the CNG Money
Pool, DRI Services, as agent for the pool, invests excess funds and allocates
the earnings among those participant companies providing such excess funds.
DRI now seeks to form and operate through December 31, 2004 a DRI money
pool ("DRI Money Pool") in which DRI and existing and future
nonutility subsidiaries of DRI, (except CNG and subsidiaries of CNG), ("DRI
Subsidiaries") would participate. The CNG Money Pool would continue to
function as a vehicle for short-term financing for the CNG system as
currently authorized by the Commission. Additional subsidiaries of DRI
may become participants in the DRI Money Pool through post-effective
amendment filings.
Participants will invest their surplus funds in the DRI Money Pool, and
the DRI Subsidiaries will borrow funds from the DRI Money Pool. DRI Money
Pool borrowings by the DRI Subsidiaries are exempt transactions under Rule 52
promulgated under the Act. DRI will not borrow from the DRI Money Pool, but
will be the ultimate provider of funds to the DRI Money Pool as needed. DRI
will obtain the funds to invest in the Money Pool (i) from internally
generated funds, (ii) under Commission orders dated December 15, 1999 or
May 24, 2001, HCAR Nos. 27112 and 27406, respectively, and/or (iii) any other
current financing authorizations or exemptions that may be available to DRI.
DRI Services will administer the Money Pool on an "at cost" basis.
The purpose of the DRI Money Pool would be similar to that of the CNG
Money Pool, that is to provide the DRI Subsidiary participants with internal
and external funds and to invest surplus funds of DRI and the Subsidiaries
in short-term money market instruments. The DRI Money Pool will offer the
DRI Subsidiaries lower short-term borrowing costs due to the elimination of
banking fees, a mechanism to earn a higher return on interest from surplus
funds that are loaned to other DRI Subsidiaries, and decreased reliance on
external funding sources.
Proceeds of any short-term borrowings from the DRI Money Pool by the
DRI Subsidiaries may be used (i) for the interim financing of construction
and capital expenditure programs, (ii) for working capital needs, (iii) for
the repayment or refinancing of debt, (iv) to meet unexpected contingencies,
payment and timing differences and cash requirement, (v) to otherwise
finance the borrower's own business, and (vi) for other lawful general
purposes.
The daily interest rate on loans from the DRI Money Pool and on all
deposits of cash in the money pool will equal the effective weighted average
rate of interest on DRI's outstanding commercial paper and/or revolving
credit borrowings. If no such DRI borrowings are outstanding on the date
of any outstanding loan , then the interest rate will be the Federal Funds'
effective rate of interest as quoted daily by the Federal Reserve Bank of
New York. The rate to be used for weekends and holidays will the the rate
on the prior business day.
Funds not required by the DRI Money Pool to make loans (with the
exception of funds required to satisfy the DRI Money Pool's liquidity
needs)would ordinarily be invested in one or more short-term
investments including: (i) obligations issued or guaranteed by the U.S.
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government and/or its agencies and instrumentalities, (ii) commercial paper,
(iii) certificates of deposits, (iv) bankers' acceptances, (v) repurchase
agreements, (vi) tax exempt notes, and (vii) other investments that are
permitted by Section 9(c) of the Act and Rule 40.
The interest income and investment income earned on loans and
investments of surplus funds would be allocated among the participants in
the DRI Money Pool in accordance with the proportion each participant's
contribution of funds bears to the total amount of funds in the DRI Money
Pool.
Each participant receiving a loan through the DRI Money Pool would be
required to repay the principal amount of the loan, together with all
interest accrued thereon, on demand. Interest on outstanding loans would be
paid to the DRI Money Pool monthly. All loans made through the DRI Money
Pool could be repaid by the borrower without premium or penalty.
All terms and conditions governing the operations of, and the
participation by DRI and the DRI Subsidiaries in, the DRI Money Pool will
be contained in a written agreement. A form of this agreement is filed
as Exhibit A.
DRI meets all of the conditions of Rule 53(a), except for Rule 53(a)(1),
and none of the adverse conditions specified in Rule 53(b) exist. At
September 30, 2001, DRI's aggregate investment, as defined in Rule 53(a)(1),
in EWGs and FUCOs was approximately $3.412 billion. This amount exceeds the
50% "safe harbor" limitation contained in the rule. DRI's consolidated
retained earnings as of September 30, 2001 were $1.213 billion. However, DRI
has requested that the Commission authorize DRI to invest up to 100% of its
consolidated retained earnings plus $8 billion in EWGs and FUCOs. See
Commission order dated May 24, 2001, HCAR No. 27406. The Commission in the
May 24 order retained jurisdiction over $6 billion of the amount requested.
DRI's current EWG and FUCO investment should not prohibit the proposed
transactions for which authority is requested herein.
DRI's consolidated capitalization as of September 30, 2001 consisted
of 33.4% common equity, 6.4% preferred equity and 60.2% debt. Further, DRI's
interests in EWGs and FUCOs have contributed positively to its consolidated
earnings.
It is requested that Rule 24 Certificates of Notification for DRI Money
Pool transactions be filed on a calendar quarterly basis as part of the
quarterly Rule 24 filings reporting on other system financing transactions
made by DRI under File Nos. 70-9517, 70-9555 and 70-9679. Such combined
filings of financing would save the cost of separate filings and obviate
the need to look in separate places for reporting on system-wide financial
transactions of a similar nature.
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Item 2. Fees, Commissions and Expenses.
The fees, commissions and expenses to be paid or incurred, directly or
indirectly, in connection with seeking the authorizations herein requested
are estimated to be $30,000. This amount includes payments to be made to
counsel and Dominion Resources Services, Inc.
Item 3. Applicable Statutory Provisions.
Sections 12(b) and 12(f) of the Act and Rules 43, 45 and 54 under the
Act are or may be directly or indirectly applicable to the proposed
transactions for which authorization is sought in this Application-
Declaration.
In addition to the citations with respect to the CNG Money Pool given
above, system-wide money pools have been authorized for other registered
holding company systems. See The National Grid Group plc, HCAR No. 27154
(March 15, 2000); National Fuel Gas Company, HCAR No. 26847 (March 20, 1998);
and Connectiv, Inc., HCAR No. 26833 (February 26, 1998).
Item 4. Regulatory Approvals.
No other state commission and no other Federal commission has
jurisdiction of the proposed transactions.
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Item 5. Procedure.
It is respectfully requested that the Commission issue and publish as
soon as possible a notice with respect to the filing of this Application-
Declaration.
It is submitted that a recommended decision by a hearing or other
responsible officer of the Commission is not needed for approval of the
proposed transaction. The Division of Investment Management may assist in
the preparation of the Commission's decision. There should be no waiting
period between the issuance of the Commission's order and the date on which
it is to become effective.
Item 6. Exhibits and Financial Statements
(a) Exhibits
A Form of DRI Money Pool agreement.
F-1 Legal opinion.
(To be filed by amendment)
H Proposed form of Federal Register notice.
(b) Financial Statements
Financial statements are not submitted with respect to the authorizations
requested herein due to the nature and immaterial effect thereof on DRI's
financial statements on a consolidated basis. However, DRI will furnish
any financial information that the Commission shall request.
Item 7. Information as to Environmental Effects.
The authorizations requested herein do not involve a "major federal
action" nor "significantly affect the quality of the human environment" as
those terms are used in Section 10(2)(C) of the National Environmental Policy
Act, 42 U.S.C. Section 4321, et seq. The only federal actions pertain to the
Commission's approval of this Application-Declaration seeking authorization to
engage in certain financing and managerial activities under the 1935 Act. No
federal agency is preparing an environmental impact statement with respect to
this matter.
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SIGNATURES
Pursuant to the Public Utility Holding Company Act of 1935, the undersigned
company has caused this Application-Declaration to be signed on its behalf by
the undersigned thereunto duly authorized.
DOMINION RESOURCES, INC.
By: James F. Stutts
__________________
Name: James F. Stutts
Title: Vice President and
General Counsel
Date: December 21, 2001
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Exhibit A
DOMINION RESOURCES, INC.
AND PARTICIPATING SUBSIDIARIES
AGREEMENT REGARDING THE
OPERATION OF, AND PARTICIPATION IN,
THE DOMINION SYSTEM MONEY POOL
WHEREAS, Dominion Resources, Inc. ("DRI") has provided and/or arranged
for the short-term financing needs of itself and its subsidiary companies
("DRI System" or "System") from time to time; and
WHEREAS, the Securities and Exchange Commission ("Commission"), in its
order dated ___________ __, 2002, Release No. 35-_____, has authorized DRI
to arrange for, and coordinate, the short-term cash borrowing needs and
investment of excess short-term cash reserves of itself and certain
of its nonutility subsidiary companies on an intercompany pooled basis through
the DRI System Money Pool ("Money Pool"); and
WHEREAS, the Money Pool will be administered by Dominion Resources
Services, Inc. ("DRI Services");
NOW, THEREFORE, DRI and each of the undersigned DRI subsidiaries and DRI
Services, have signed this Agreement to set forth the terms of the operation of
the Money Pool, and the participation therein of DRI (as a lender to the Money
Pool), the administration thereof by DRI Services, and the participation therein
of each of the undersigned DRI subsidiaries (as lenders to and/or borrowers
from the Money Pool, each a "Participant") and those subsidiaries that shall
subsequently become Participants therein by signing this Agreement or an
amendment hereto.
ARTICLE I
GENERAL
1. Only nonutility subsidiaries of DRI, except Consolidated Natural Gas
Company ("CNG") and subsidiaries of CNG, can be Participants in the
Money Pool.
2. DRI Services hereby undertakes to operate the Money Pool on behalf
of the Participants. DRI Services undertakes to maintain a list of
each Participant in the Money Pool. Exhibit A is a list of the
Participants as of the date of this Agreement.
3. This Agreement sets forth the procedures regarding the operation of
the Money Pool and the methods for each Participant to receive loans from
the Money Pool or to deposit excess cash reserves ("Surplus Cash") in the
Money Pool for the use by other Participants.
4. This Agreement shall be subject to the provisions of the Public Utility
Holding Company Act of 1935, as it may be amended from time to time (the
"Act"), any Rules promulgated under the Act, and any Orders issued from
time to time by the Commission under the Act.
5. Upon payment of all outstanding loans from or deposits of Surplus Cash to
the Money Pool, accrued interest, and its allocable share of fees to DRI
Services, any Participant may terminate its participation in the Money
Pool pursuant to this Agreement at any time.
ARTICLE II
BORROWINGS, DEPOSITS
1. Subject to any individual maximum borrowing limit that may be imposed
by DRI, in its sole discretion, from time-to-time, and further subject
to any limits that may be imposed on a consolidated System basis
and have an effect on an individual Participant's borrowing limit, each
Participant shall be entitled, on request, to borrow from the Money Pool
various amounts in $1,000 increments ("Loans"), and for such period as
determined by the Participant.
2. Loans from the Money Pool shall be made in the form of open account
advances. Open account advances are repayable not more than one year
from the date of the first advance.
3. Loans are payable on demand, may be prepaid without premium or penalty,
and bear interest, payable monthly.
4. All Loans by a Participant from the Money Pool shall be evidenced by
book entries.
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5. If any Participant has Surplus Cash in excess of its immediate needs,
it may deposit such Surplus Cash in the Money Pool. DRI Services, as
agent for the Participants, shall pool such Surplus Cash with all other
funds available when determining the amount that must be borrowed from
DRI from day to day.
6. Any Participant may withdraw funds contributed to the Money Pool at any
time.
7. All deposits of cash in the Money Pool by DRI or deposits of Surplus
Cash by a Participant shall be evidenced by book entries.
8. Each Participant agrees to keep DRI Services advised of its borrowing
needs and/or Surplus Cash position. DRI Services shall utilize such
information to determine the net borrowing needs or Surplus Cash
position of the consolidated DRI System and coordinate borrowings from
DRI to meet the net borrowing needs or arrange for the investment of
Surplus Cash on behalf of the Participants.
ARTICLE III
DETERMINATION OF BORROWING RATES
1. DRI Services will calculate, on a daily basis, the interest rate
("Daily Rate") applicable to all Loans by Participants from the
Money Pool.
2. The Daily Rate on Loans from the Money Pool shall equal the effective
weighted average rate of interest on DRI's outstanding commercial paper
and/or revolving credit borrowings. If no such DRI borrowings are
outstanding on the date of any outstanding Loan, then the interest rate
shall be the Federal Funds' effective rate of interest as quoted daily
by the Federal Reserve Bank of New York. The rate to be used for weekends
and holidays will be the rate on the prior business day.
3. The Daily Rate shall be applied to the aggregate principal amount of
any Loan of a Participant that remains outstanding at the end of any day.
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ARTICLE IV
DETERMINATION OF DEPOSIT RATES
1. Subject to paragraph 3 below, all deposits of cash in the Money Pool
by DRI or deposits of Surplus Cash deposited in the Money Pool by a
Participant, shall earn interest at the Daily Rate as calculated by
DRI Services pursuant to Article III.
2. The Daily Rate shall be applied to the aggregate principal amount of
any deposit of Surplus Cash that remains in the Money Pool at the end
of any day.
3. If, at any time, there is more Surplus Cash deposited by Participants in
the Money Pool than is needed by other Participants (such increment of
Surplus Cash to be referred to as "Excess Surplus Cash"), DRI Services,
as Agent for the Participants that deposited such Excess Surplus Cash,
shall invest such Excess Surplus Cash in instruments which are authorized
temporary cash investments under the Investment Policy of DRI as set forth
in Exhibit B hereto. All interest accrued on such investments shall be
allocable to the Participants that deposited such Excess Surplus Cash
in the Money Pool.
ARTICLE V
RECORD OF CURRENT ACCOUNTS
1. DRI Services shall maintain a current daily accounting of all Loans from,
or deposits of Surplus Cash in, the Money Pool by each Participant. Such
accounting shall be maintained in electronic format and shall indicate
the Daily Rate in effect from time to time.
2. Upon request, DRI Services shall provide any Participant copies of such
current accounting.
ARTICLE VI
INTEREST PAYMENTS
1. All accrued and unpaid interest on all Loans from the Money Pool shall
be payable monthly by each Participant until the principal amount of the
Loan has been fully repaid.
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2. Accrued interest on all deposits in the Money Pool by DRI or a Participant
shall be disbursed to the appropriate party on a monthly basis. DRI
Services shall be entitled to apply any such interest payable against any
outstanding interest receivable that may be due for Loans that may have
been outstanding by a Participant at other times during that month.
ARTICLE VII
AVAILABILITY OF FUNDS TO PARTICIPANTS
1. Based on the individual funding requirements communicated by each
Participant to DRI Services from time to time, DRI Services shall endeavor
to arrange borrowings from DRI so that the funding requirements of each
Participant may be fully satisfied.
2. DRI may not borrow any funds from the Money Pool. DRI, however, shall have
the right to withdraw funds it has deposited in the Money Pool to the
extent such funds are no longer needed to cover the borrowing needs of
subsidiary Participants.
ARTICLE VIII
REPAYMENT OF LOANS
1. All Loans are payable upon demand by DRI Services.
2. Each Participant shall have the right at any time to fully repay to the
Money Pool any outstanding Loan.
ARTICLE IX
TERM, GOVERNING LAW
1. Subject to any Participant's individual right to terminate participation
under this Agreement as set out in Article I, 5, this Agreement shall
remain in effect until such date as may be approved by DRI, DRI Services
and each Participant.
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2. Notwithstanding the termination of participation in the Money Pool by any
Participant, this Agreement shall remain in effect with respect to all
other Participants.
3. This Agreement may be amended or superseded at any time, by a written
instrument signed by DRI, DRI Services and each Participant.
4. This Agreement shall be governed by, and construed in accordance with,
the laws of the Commonwealth of Virginia.
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IN WITNESS WHEREOF, the parties have hereunto executed this Agreement as
of _____ , 2002.
DOMINION RESOURCES, INC.
By:______________________
Its:_____________________
DOMINION RESOURCES SERVICES, INC.
By:______________________
Its:_____________________
(PARTICIPANTS)
_________________________
By:______________________
Its:_____________________
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EXHIBIT A
to Money Pool
Agreement
DOMINION SYSTEM
MONEY POOL
Participants as of _______ , 2002:
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EXHIBIT B
to Money Pool
Agreement
AUTHORIZED TEMPORARY CASH INVESTMENTS UNDER SECTION III OF THE
INVESTMENT POLICY OF DOMINION RESOURCES, INC.
The following list represents the types of securities and the qualifications
specific to each that are authorized to be purchased for the Company's account.
(A) U.S. Government Securities
(1) Securities issued by the U. S. Treasury may be purchased. This
includes Bills, Notes and Bonds.
(2) Maximum maturity shall be one year.
(B) U. S. Government Agencies
(1) Securities of the following government agencies may be purchased:
Federal National Mortgage Association
Government National Mortgage Association
Federal Home Loan Banks
Federal Land Banks
Federal Home Loan Mortgage Corporation
Federal Intermediate Credit Banks
(2) Maximum maturity shall be one year.
(C) Certificates of Deposit
(1) May purchase CDs issued by any bank headquartered in the
United States meeting the following qualifications:
(a) Total assets must rank in the top 50 domestic bank
universe.
(b) The bank must have a short-term debt rating no less
than 'A-1','P-1' by Standard & Poor's and Moody's,
respectively.
(2) Maximum maturity shall be one year.
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(D) Banker's Acceptances
(1) May purchase BAs issued by any bank headquartered in the
United States meeting the following qualifications:
(a) Total assets must rank in the top 50 domestic bank
universe.
(b) The bank must have a short-term debt rating no less
than 'A-1','P-1' by Standard & Poor's and Moody's,
respectively.
(2) May purchase BAs issued by a non-U.S. bank meeting the
following qualifications:
(a) Total assets must rank in the top 25 worldwide bank
universe.
(b) The Thomson BankWatch, Inc. quality rating must be
'A/B' or better.
(3) Maximum maturity shall be one year.
(E) Eurodollar Certificates of Deposit and Eurodollar Time
Deposits
(1) May purchase Eurodollar CDs and Eurodollar Time Deposits
issued by the London, Nassau or Cayman branches of any
bank headquartered in the United States meeting the
following qualifications:
(a) Total assets must rank in the top 50 domestic
bank universe.
(b) The bank must have a short-term debt rating no less
than 'A-1','P-1' by Standard & Poor's and Moody's,
respectively.
(2) May purchase Eurodollar CDs and Eurodollar Time Deposits
issued by any non-U.S. bank meeting the following
qualifications:
(a) Total assets must rank in the top 25 worldwide bank universe.
(b) The bank must have a short-term debt rating no less
than 'A-1','P-1' by Standard & Poor's and Moody's,
respectively.
(3) Maximum maturity shall be one year.
(F) Commercial Paper
(1) May purchase CP from any issuer which has a short-term
debt rating no less than 'A-1','P-1' by Standard & Poor's
and Moody's, respectively.
(2) Maximum maturity shall be 270 days.
(G) Repurchase Agreements
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(1) May purchase Repos from any domestic bank that has met
the criteria in C, above.
(2) May purchase Repos from any of the following securities firms:
J. P. Morgan, Securities, Inc. Merrill Lynch
Morgan Stanley & Co. Bank of America Securities
Credit Suisse-First Boston Wachovia Capital Markets, Inc.
First Union Capital Markets, Inc. Salomon-Smith Barney.
Goldman Sachs & Co. SunTrust Capital Markets, Inc.
(3) Collateral to be accepted in a repurchase agreement must meet the
following criteria:
(a) Consist of securities that meet or exceed quality guidelines
to qualify for actual purchase. (Exception: No maximum maturity
will apply to underlying collateral.)
(b) Market value of the underlying collateral must equal or exceed
the principal amount of the repurchase agreement.
(4) Maximum maturity shall be two weeks or 10 business days.
(H) Tax-Exempt Commercial Paper
(1) May purchase tax-exempt CP from any issuer which has a
short-term debt rating no less than 'A-1', 'P-1' by
Standard & Poor's and Moody's, respectively.
(2) Maximum maturity shall be 270 days.
(I) Corporate Bonds
(1) May purchase bonds issued by any corporation whose long-
term debt ratings are no less than 'A' or 'A2' by Standard
& Poor's or Moody's, respectively.
(2) Investments shall be limited to securities which have
one year or less remaining to maturity, or which can be
tendered back to the issuer at par value one year or less
from the date of purchase.
(J) Preferred Stock
(1) May purchase preferred stock from any issuer whose
preferred stock ratings are no less than 'A' or 'a2' by
Standard & Poor's or Moody's, respectively.
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(2) Investments shall be limited to securities which have
one year or less remaining to maturity, or which can be
tendered back to the issuer at par value one year or less
from the date of purchase.
(K) Money Market Funds
(1) May purchase money market funds whose portfolio composition
consists of securities which meet or exceed quality guidelines
to qualify for actual purchase.
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Exhibit H
UNITED STATES OF AMERICA
before the
SECURITIES AND EXCHANGE COMMISSION
PUBLIC UTILITY HOLDING COMPANY ACT OF 1935
Release No. / , 2002
_________________________________________
:
In the Matter of :
:
DOMINION RESOURCES, INC., ET AL. :
120 Tredegar Street :
Richmond, Virginia 23219 :
:
(70- ) :
_________________________________________:
NOTICE OF PROPOSED MONEY POOL
Dominion Resources, Inc. ("DRI"), a registered holding company; and
its subsidiaries ("DRI Subsidiaries") Dominion Energy, Inc. Elwood Energy LLC,
Dominion Reserves, Inc. Dominion Ohio ES, Inc, Dominion Resources Services,
Inc. and Dominion Alliance Holding, Inc., 120 Tredegar Street, Richmond,
VA 23219; Elwood II Holdings LLC, 21100 Noel Road, Elwood, IL 60421;
Kincaid Generation, LLC, Box 260, Kincaid, IL 62540; DT Services, Inc., and
Dominion Metering Services, Inc., 701 East Cary Street, Richmond, VA 23219
have filed with the Commission an Application-Declaration pursuant to the
Public Utility Holding Company Act of 1935 (the "1935 Act"), designating
Sections 12(b) and 12(f), and Rules 43, 45 and 54 promulgated thereunder
as applicable to the proposed transactions.
The applicants seek authority to form and operate through December 31,
2004 a DRI money pool ("DRI Money Pool") in which DRI and the DRI Subsidiaries
would participate. A CNG Money Pool would continue to function as a vehicle
for short-term financing for the CNG system as currently authorized by the
Commission.
Participants will invest their surplus funds in the DRI Money Pool,
and the DRI Subsidiaries will borrow funds from the DRI Money Pool. DRI
will not borrow from the DRI Money Pool, but will be the ultimate provider
of funds to the DRI Money Pool as needed. Dominion Resources Services, Inc.
will administer the Money Pool on an "at cost" basis.
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The purpose of the DRI Money Pool would be similar to that of the CNG
Money Pool, that is to provide the DRI Subsidiaries with internal and external
funds and to invest surplus funds of DRI and the DRI Subsidiaries in
short-term money market instruments. The DRI Money Pool will offer the DRI
Subsidiaries lower short-term borrowing costs due to the elimination of
banking fees, a mechanism to earn a higher return on interest from surplus
funds that are loaned to other DRI Subsidiaries, and decreased reliance on
external funding sources.
Funds not required by the DRI Money Pool to make loans (with the
exception of funds required to satisfy the DRI Money Pool's liquidity needs)
would ordinarily be invested in one or more short-term investments including:
(i) obligations issued or guaranteed by the U.S. government and/or its
agencies and instrumentalities, (ii) commercial paper, (iii) certificates of
deposits, (iv) bankers' acceptances, (v) repurchase agreements, (vi) tax exempt
notes, and (vii) other investments that are permitted by Section 9(c) of the
Act and Rule 40.
The daily interest rate on loans from the DRI Money Pool and on all
deposits of cash in the money pool will equal the effective weighted average
rate of interest on DRI's outstanding commercial paper and/or revolving credit
borrowings. If no such DRI borrowings are outstanding on the date of any
outstanding loan, then the interest rate will be the Federal Funds's effective
rate of interest as quoted daily by the Federal Reserve Bank of New York.
The rate to be used for weekends and holidays will the the rate on the prior
business day.
The interest income and investment income earned on loans and investments
of surplus funds would be allocated among the participants in the DRI
Money Pool in accordance with the proportion each participant's contribution
of funds bears to the total amount of funds in the DRI Money Pool.
Each participant receiving a loan through the DRI Money Pool would be
required to repay the principal amount of the loan, together with all interest
accrued thereon, on demand. Interest on outstanding loans would be paid to
the DRI Money Pool monthly. All loans made through the DRI Money Pool could
be repaid by the borrower without premium or penalty.
All terms and conditions governing the operations of, and the
participation by DRI and the DRI Subsidiaries in, the DRI Money Pool will be
contained in a written agreement.
The Application or Declaration and any amendments thereto are available
for public inspection through the Commission's Office of Public Reference.
Interested persons wishing to comment or request a hearing should submit
their views in writing by January , 2002 to the Secretary, Securities and
Exchange Commission, Washington, D.C. 20549, and serve a copy on DRI at the
address specified above. Proof of service (by affidavit or, in case of any
attorney at law, by certificate) should be filed with the request. Any
request for a hearing shall identify specifically the issues of fact or law
that are disputed. A person who so requests will be notified of any
hearing, if ordered, and will receive a copy of any notice or order issued in
this matter. After said date, the Application-Declaration, as filed or as
it may be amended, may be permitted to become effective.
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For the Commission, by the Office of Public Utility
Regulation, pursuant to delegated authority.
Jonathan G. Katz
Secretary
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