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ENERGY/RHG CA-26

Decision _________

BEFORE THE PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIA

In the Matter of the Application of SOUTHWEST )

GAS CORPORATION U-905-G, for authority to: )

(a) issue one or more types of Debt Securities in )

principal amount of up to $251,000,000; (b) issue ) Application 00-09-068

one or more series of Preferred Securities in ) (Filed September 29, 2000)

principal amount of up to $60,000,000; (c) issue up )

to 6,000,000 shares of its $1 par value Common )

Stock; and (d) refinance previously issued short- )

term debt securities. )

)

O P I N I O N

Summary

Southwest requests authority, pursuant to Public Utilities (PU) Code § 818 for the following:

1. To issue and sell Debt Securities, in aggregate principal amount not exceeding $84,280,000;

2. To issue and sell one or more series of Preferred Securities, in aggregate amount not exceeding $60,000,000;

3. To issue and sell up to 4,765,200 shares of its $1 par value Common Stock; and

4. To refinance, refund, or replace short-term debt securities.

This Application was originally filed as a Petition to extend the time period of the financing authority granted to Southwest by Decision (D.) 97-05-037 in A.97-02-049, as modified by D.99-12-016, to issue: one or more types of Debt Securities in principal amount of $251,000,000; $60,000,000 of Preferred Securities; and 6,000,000 shares of $1 par value Common Stock (the Petition was filed over one year after the effective date of the decision, hence the Application).

Notice of the filing of the Application appeared on the Commission's Daily Calendar of October 17, 2000. No protests have been received.

Background

Southwest, a California corporation, is a public utility under the jurisdiction of this Commission, and is primarily engaged in the business of distributing and selling natural gas in certain portions of San Bernardino, El Dorado, Placer and Nevada Counties, Californias. Southwest is also engaged in the intrastate transmission, sale, and distribution of natural gas as a public utility certain portions of the states of Nevada, and Arizona and is a "natural gas company," within the meaning of the Natural Gas Act, subject to the jurisdiction of the Federal Energy Regulatory Commission with respect to interstate transmission facilities and sales of natural gas for resale on its northern Nevada system.

D.97-05-035 as modified, granted Southwest to issue $251,000,000 of Debt Securities, $60,000,000 of Preferred Securities, and 6,000,000 shares of $1 par value Common Stock. Of this authority, $141,720,000 of Debt Securities and 1,234,800 shares of $1 par value Common have been issued. The remaining unused authority will expire in December 31, 2000.

Discussion

By A.00-09-068, Southwest requests authorization (until all the securities are fully used) to issue and sell the following remaining authority: (1) Debt Securities in aggregate principal amount not exceeding $84,280,000; (2) Preferred Securities in aggregate amount not exceeding $60,000,000; and (3) up to 4,765,200 shares of its $1 par value Common Stock. Southwest also requests in the Application to refinance, refund, or replace short-term debt securities.

Southwest states in the Application that the requested amount will address part of its expected external financing requirements over the next three years.

The terms, conditions, types, and amount of debt and equity securities that Southwest requests in the Application were previously established by the Commission in D.97-05-037 as modified. D.97-05-037 as modified, also authorized Southwest to use the proceeds from the debt and equity securities to refinance, refund, or replace short-term debt indebtedness.

PU Code § 1904(b)

Whenever the Commission authorizes a utility to issue debt, the Commission is required to charge and collect a fee in accordance with PU Code § 1904(b) which states as follows:

For a certificate authorizing an issue of bonds, notes, or other evidences of indebtedness, two dollars ($2) for each one thousand dollars ($1,000) of the face value of the authorized issue or fraction thereof up to one million dollars ($1,000,000), one dollar ($1) for each one thousand dollars ($1,000) over one million dollars ($1,000,000) and up to ten million dollars ($10,000,000), and fifty cents ($0.50) for each one thousand dollars ($1,000) over ten million dollars ($10,000,000), with a minimum fee in any case of fifty dollars ($50). No fee need be paid on such portion of any such issue as may be used to guarantee, take over, refund, discharge, or retire any stock, bond, note or other evidence of indebtedness on which a fee has theretofore been paid to the commission. If the commission modified the amount of the issue requested in any case and the applicant thereupon elects not to avail itself of the commission's authorization, no fee shall be paid, and if such fee is paid prior to the issuance of such certificate by the commission, such fee shall be returned.

This decision authorizes Southwest to issue $84,380,000 of Debt Securities, $60,000,000 Preferred Securities, and 4,765,200 shares of its $1 par value Common Stock whereby the fee has been previously paid for. Therefore, pursuant to PU Code 1904(b), no fee is required in this authorization.

This is an uncontested matter in which the decision grants the relief requested. Accordingly, pursuant to PU Code 311(g)(2), the otherwise applicable 30-day period for public review and comment is being waived.

Findings of Fact

1. In A.00-09-068, Southwest seeks authority to issue $84,280,000 of Debt Securities, $60,000,000 of Preferred Securities, and 4,765,200 shares of $1 par value Common Stock.

2. The terms, conditions, types, and amount of debt and equity securities that Southwest requests under A.00-09-068 were previously established by the Commission in D.97-05-037 as modified.

3. Southwest states that it needs authority to issue debt and equity securities to meet part of its external financing requirements over the next three years.

4. Notice of the filing of the Application appeared on the Commission's Daily Calendar of October 17, 2000, and no protests have been received. There is no known opposition to the Application and no reason to delay granting the authority requested.

Conclusions of Law

1. A public hearing is not necessary.

2. The Application should be granted to the extent set forth in the order which follows.

3. The debt and equity securities requested by Southwest in this Application should be subject to the terms and conditions established by the Commission in D.97-05-037 as modified.

4. The proposed issue of debt and equity securities is for lawful purposes and the money, property, or labor to be obtained is required for these purposes. Proceeds from the securities issue may not be charged to operating expense or income.

5. There is no fee associated with A.00-09-068.

6. The following order should be effective on the date of signature.

ORDER

1. On or after the effective date of this order, Southwest Gas Corporation, upon terms and conditions substantially consistent with those set forth or contemplated in Application

00-09-068 (Application), is authorized to issue and sell (until all the securities are fully used) (1) Debt Securities in aggregate principal amount not exceeding $84,280,000; (2) Preferred Securities in aggregate amount not exceeding $60,000,000; (3) up to 4,765,200 shares of its $1 par value Common Stock; and (4) refinance, refund, or replace short-term debt securities.

2. The types of Debt Securities and the terms and conditions attached to the issuance of Debt Securities, Preferred Securities and shares of Common Stock authorized in this decision shall be those established by the Commission in Decision (D.) 97-05-037 as modified by

D.99-12-016.

3. The Application is granted as set forth above.

4. A.00-09-068 is closed.

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