(As filed February 19, 2002)
File No. 70-9323
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
POS-AMC
(Post-Effective Amendment No. 4)
to
FORM U-1
APPLICATION OR DECLARATION
UNDER THE
PUBLIC UTILITY HOLDING COMPANY ACT OF 1935
ALLIANT ENERGY CORPORATION
ALLIANT ENERGY RESOURCES, INC.
222 West Washington Avenue
Madison, Wisconsin 53703
HEARTLAND PROPERTIES, INC.
122 West Washington Avenue, 6th Floor
Madison, Wisconsin 53703
(Names of companies filing this statement and addresses of
principal executive offices)
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ALLIANT ENERGY CORPORATION
(Name of top registered holding company parent)
----------------------------------------------------
Edward M. Gleason
Vice President - Treasurer and
Corporate Secretary
Alliant Energy Corporation
222 West Washington Avenue
Madison, Wisconsin 53703-0192
(Name and address of agent for service)
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The Commission is requested to send copies of all notices, orders and
communications in connection with this Application or Declaration to:
Barbara J. Swan, General Counsel William T. Baker, Jr., Esq.
Alliant Energy Corporation Thelen Reid & Priest LLP
222 West Washington Avenue 40 West 57th Street
Madison, Wisconsin 53703 New York, New York 10019
ITEM 1. DESCRIPTION OF PROPOSED TRANSACTION.
1.1 Background. Alliant Energy Corporation ("Alliant Energy") is a
registered holding company under the Public Utility Holding Company Act of 1935
(the "Act").(1) Its direct and indirect public utility subsidiaries are:
Wisconsin Power and Light Company, South Beloit Water, Gas and Electric Company,
and Interstate Power and Light Company (collectively the "Operating Companies").
Together, the Operating Companies provide service to approximately 930,000
electric and 398,000 retail gas utility customers in portions of Wisconsin,
Iowa, Minnesota and Illinois. Alliant Energy Resources ("AER"), a wholly-owned
non-utility subsidiary of Alliant Energy, serves as the holding company for many
of Alliant Energy's non-utility businesses and investments. AER, indirectly
through Heartland Properties, Inc. ("Heartland") and other subsidiaries, holds
investments in low-income, multi-family housing projects that qualify for Low
Income Housing Tax Credits ("LIHTC") under section 42 of the Internal Revenue
Code ("Code"). Alliant Energy, AER and Heartland are hereinafter referred to as
the "Applicants."
By order dated August 13, 1999 (Holding Co. Act Release No. 27060) in
this proceeding, the Commission authorized AER, through Heartland or other
subsidiaries, to invest up to $50 million from time to time over a five-year
period (through August 13, 2004) as a limited partner in limited partnerships
organized specifically to invest in LIHTC properties in the Alliant Energy
service territory. (2) By supplemental order dated June 11, 2001 (Holding Co.
Act Release No. 27418), the Commission modified its previous order in two
respects: (1) to eliminate the requirement that all LIHTC properties be located
in the
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(1) WPL Holdings, Inc., et al., Holding Company Act Release No. 26856 (Apr. 14,
1998).
(2) For state tax reasons, AER's investments in LIHTC projects in Minnesota
and Iowa are held by Alliant Energy Investments, Inc., a direct subsidiary
of AER and the parent of Heartland. Heartland manages AER's investments in
all LIHTC properties, wherever located.
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Alliant Energy service territory, and (2) to permit investments in LIHTC
properties through the acquisition of passive interests in manager-managed
limited liability companies ("LLCs") that are managed by an unaffiliated third
party. The August 13, 1999 and June 11, 2001 orders are hereinafter referred to
together as the "Prior Orders."(3)
Pursuant to the authorization granted under the Prior Orders, the
Applicants have invested, through December 31, 2001, a total of $22.3 million in
limited partnerships or LLCs holding LIHTC properties, leaving a balance of
$27.7 million under the authorized investment limit. The names of these entities
and the cumulative amounts invested in all LIHTC properties pursuant to the
Prior Orders are reported in the Applicants' most recent certificate pursuant to
Rule 24 in this proceeding, filed on February 12, 2002, to which reference is
made. In addition, the Applicants have made commitments to invest a total of $18
million in new and existing LIHTC properties, all of which will be funded before
the end of the current authorization period.
1.2 Summary of Requested Modifications. The Applicants are now requesting
that the Commission issue a further order in this proceeding to (1) extend the
authorization period to June 30, 2007 (or approximately three years), and (2)
increase the investment limit from $50 million to $125 million. No other changes
or modifications to the terms, conditions or limitations contained in the Prior
Orders are requested herein. To the extent necessary, Alliant Energy and/or AER
will fund future investments by Heartland or other subsidiaries of AER in LIHTC
properties through capital contributions or loans pursuant to Rule 45(b) or Rule
52, as applicable, and/or through loans under the Alliant Energy system
non-utility money pool. No additional authority is requested herein for Alliant
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(3) In an intervening order, dated July 10, 2000 (Holding Co. Act Release No.
27198), the Commission authorized Heartland to reacquire an interest in a
fund holding 17 LIHTC properties, some of which were outside the Alliant
Energy service territory.
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Energy to issue securities (including guarantees) in order to fund investments
by AER.(4)
As required under the Prior Orders, AER will continue to invest in LIHTC
projects through Heartland or other subsidiaries only as a passive investor, and
will invest in such projects solely for the purpose of obtaining the federal and
state income tax credits that are available. Further, each investment in an
LIHTC project will be self-liquidating, in the sense that the asset will wind
down as the tax credits expire.(5)
1.3 Reasons for Requested Modifications. As indicated, through December 31,
2001, the Applicants have invested or made commitments to invest in LIHTC
properties an aggregate amount of $40.3 million. There is generally about a two
year lag between the date when commitments are made and the date of final
funding. Thus, Heartland anticipates that, in the near future, it will have
opportunities to make commitments in new LIHTC projects that will not need to be
funded until after the end of the current authorization period (August 13,
2004). Exhibit H hereto shows the cumulative amount of equity investments in
LIHTC projects that would be required in order to maintain the tax credit stream
at 2002 levels (approximately $9.3 million). The amount of additional investment
authority requested herein will enable Alliant Energy to increase the amount of
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(4) Alliant Energy is currently authorized to issue and sell equity and
long-term debt securities and to guarantee obligations of its subsidiaries
by order dated October 3, 2001 (Holding Co. Act Release No. 27448). Alliant
Energy is also currently authorized to guarantee short-term borrowings by
AER, the proceeds of which are used to fund advances to the Alliant Energy
system non-utility money pool, pursuant to an order dated December 18, 1998
(Holding Co. Act Release No. 26956), as modified and extended by order
dated December 15, 2000 (Holding Co. Act Release No. 27304). The terms of
these orders are not affected by this Post-Effective Amendment.
(5) These are the criteria by which the Commission has analyzed similar
investments in the past. See Exelon Corp., Holding Co. Act Release No.
27256 (Oct. 19, 2000).
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annual tax credits modestly as Alliant Energy's federal tax liability increases.
Item 2. Fees, Commissions and Expenses.
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The estimated fees, commissions and expenses to be incurred in
connection with the filing of this Post-Effective Amendment are $5,000.
Item 3. Applicable Statutory Provisions.
-------------------------------
The Applicants' proposal to make passive investments in LIHTC
properties through Heartland or another subsidiary of AER is subject to Sections
9(c)(3) of the Act and Rule 54 thereunder. The standards of Section 9(c)(3) have
previously been addressed in this proceeding.
Rule 54 Analysis. Rule 54 provides that in determining whether to
approve the issue or sale of a security by a registered holding company for
purposes other than the acquisition of an "exempt wholesale generator" ("EWG")
or a "foreign utility company" ("FUCO"), or other transactions by such
registered holding company or its subsidiaries other than with respect to EWGs
or FUCOs, the Commission shall not consider the effect of the capitalization or
earnings of any subsidiary which is an EWG or a FUCO upon the registered holding
company if paragraphs (a), (b) and (c) of Rule 53 are satisfied.
Alliant Energy currently does not satisfy all of the conditions of
Rule 53(a). As of September 30, 2001, Alliant Energy's "aggregate investment,"
as defined in Rule 53(a)(1), in EWGs and FUCOs was approximately $588.5 million,
or approximately 72.55% of Alliant Energy's average "consolidated retained
earnings," also as defined in Rule 53(a)(1), for the four quarters ended
September 30, 2001 ($811.2 million), which exceeds the 50% "safe harbor"
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limitation contained in Rule 53(a). However, by order dated October 3, 2001
(Holding Co. Act Release No. 27448), the Commission has authorized Alliant
Energy to increase its "aggregate investment" in EWGs and FUCOs to an amount
equal to 100% of Alliant Energy's average "consolidated retained earnings."
Therefore, although Alliant Energy's "aggregate investment" in EWGs and FUCOs
currently exceeds the 50% "safe harbor" limitation, this investment level is
permitted under the October 3, 2001 order.
In any event, even taking into account the capitalization of and
earnings from EWGs and FUCOs in which Alliant Energy has an interest, there
would be no basis for withholding approval of the proposed transaction. With
regard to capitalization, since the issuance of the October 3, 2001 order, there
has been no material adverse impact on Alliant Energy's consolidated
capitalization resulting from Alliant Energy's investments in EWGs and FUCOs. On
a pro forma basis, giving effect to a sale of common stock and issuance of
long-term debt in November 2001, Alliant Energy's consolidated capitalization
consists of 45.5% equity, 46.9% long-term debt, and 7.6% short-term debt
(including current maturities of long-term debt). These ratios are within
acceptable industry ranges. The proposed transactions will not have any material
impact on capitalization. Further, since the date of the October 3, 2001 order,
there has been no material change in Alliant Energy's level of earnings from
EWGs and FUCOs.
Alliant Energy satisfies all of the other conditions of paragraphs (a)
and (b) of Rule 53. With reference to Rule 53(a)(2), Alliant Energy maintains
books and records in conformity with, and otherwise adheres to, the requirements
thereof. With reference to Rule 53(a)(3), no more than 2% of the employees of
Alliant Energy's domestic public utility companies render services, at any one
time, directly or indirectly, to EWGs or FUCOs in which Alliant Energy directly
or indirectly holds an interest. With reference to Rule 53(a)(4), Alliant Energy
will continue to provide a copy of each application and certificate relating to
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EWGs and FUCOs and relevant portions of its Form U5S to each regulator referred
to therein, and will otherwise comply with the requirements thereof concerning
the furnishing of information. With reference to Rule 53(b), none of the
circumstances enumerated in subparagraphs (1), (2) and (3) thereunder have
occurred. Finally, Rule 53(c) by its terms is inapplicable since the proposed
transaction does not involve the issue or sale of a security to finance the
acquisition of an EWG or FUCO.
Item 4. Regulatory Approval.
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No state commission and no federal commission, other than this
Commission, has jurisdiction over the proposed transaction.
Item 5. Procedure.
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The Applicants request that the Commission publish a notice under Rule
23 with respect to this Post-Effective Amendment as soon as practicable and
issue a supplemental order in this proceeding as soon as its rules allow. The
Applicants further request that there be no 30-day waiting period between the
issuance of the Commission's supplemental order and the date on which it is to
become effective; waive a recommended decision by a hearing or other responsible
officer of the Commission; and consent to the participation of the Division of
Investment Management in the preparation of the Commission's decision and/or
order with respect to this Post-Effective Amendment, unless such Division
opposes the matters covered hereby.
Item 6. Exhibits and Financial Statements.
---------------------------------
(a) Exhibits
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A - None.
B - None.
C - None.
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D - None.
E - None.
F - Opinion of Counsel. (To be filed by amendment).
G - Form of Federal Register Notice.
H - Tax Credit Planning Schedule. (Filed
confidentially pursuant to Rule 104).
(b) Financial Statements.
--------------------
FS-1 Balance Sheet of Alliant Energy and consolidated
subsidiaries, as of September 30, 2001 (incorporated by
reference to the Quarterly Report on Form 10-Q of Alliant
Energy for the period ended September 30, 2001) (File No.
1-9894).
FS-2. Statement of Income of Alliant Energy and consolidated
subsidiaries for the nine months ended September 30, 2001
(incorporated by reference to the Quarterly Report on Form
10-Q of Alliant Energy for the period ended September 30,
2001) (File No. 1-9894).
FS-3 Unaudited Consolidated Balance Sheet of Heartland (including
Iowa and Minnesota investments), as of December 31, 2001
(incorporated by reference to Rule 24 report filed in this
proceeding on February 12, 2002).
FS-4 Unaudited Consolidated Statement of Income of Heartland
(including Iowa and Minnesota investments) for the year
ended December 31, 2001 (incorporated by reference to Rule
24 report filed in this proceeding on February 12, 2002).
Item 7. Information as to Environmental Effects.
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None of the matters that are the subject of this Post-Effective
Amendment involves a "major federal action" nor does it "significantly affect
the quality of the human environment" as those terms are used in section
102(2)(C) of the National Environmental Policy Act. The proposals contained
herein will not result in changes in the operation of the Applicants that will
have an impact on the environment. The Applicants are not aware of any federal
agency that has prepared or is preparing an environmental impact statement with
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respect to the proposals contained herein.
SIGNATURES
Pursuant to the requirements of the Public Utility Holding Company Act
of 1935, as amended, the undersigned companies have duly caused this statement
filed herein to be signed on their behalf by the undersigned thereunto duly
authorized.
ALLIANT ENERGY CORPORATION
ALLIANT ENERGY RESOURCES, INC.
By: /s/ Edward M. Gleason
Name: Edward M. Gleason
Title: Vice President - Treasurer and Corporate
Secretary
HEARTLAND PROPERTIES, INC.
By: /s/ Ruth A. Domack
Name: Ruth A. Domack
Title: President
Date: February 19, 2002