ML20102C135
| ML20102C135 | |
| Person / Time | |
|---|---|
| Site: | Waterford  |
| Issue date: | 02/28/1985 |
| From: | Churchill B LOUISIANA POWER & LIGHT CO., SHAW, PITTMAN, POTTS & TROWBRIDGE |
| To: | NRC ATOMIC SAFETY & LICENSING APPEAL PANEL (ASLAP) |
| References | |
| CON-#185-856 OL, NUDOCS 8503050284 | |
| Download: ML20102C135 (73) | |
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NUCLEAR REGULATCRY COMMISSION .
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Before the Atomic Safety and Licensing Appeal Board In the Matter of ) ~ ~ ~' " * " E a
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LOUISIANA POWER & LIGHT COMPANY ) Docket No. 50-382 OL
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(Waterford Steam Electric Station, ) Unit 3) ) APPLICANT'S ANSWER TO JOINT INTERVENORS' MOTION FOR LEAVE TO FILE SUPPLEMENTAL MEMORANDUM AND RESPONSE TO SUPPLEMENTAL MEMORANDUM On February 25, 1985, Joint Intervenors filed a supplemen-tal memorandum (" Supplement") in support of their November 8, 1984 motion.to reopen the record in this proceeding. Accompa-nying it was a motion seeking leave to file the Supplement (" Motion").1/ The Supplement contains allegations advanced by Joint Intervenors in support of the contention in their motion to reopen that Applicant lacks the necessary character and 1/ Applicant and the NRC Staff filed answers to the motion to reopen on November 30 and December 21, 1984, respectively. Joint Intervenors filed a reply to the answers on January 25, 1985, along with a motion for leave to file the reply. Appli-cant responded to the reply on February 1, 1985, and the Staff responded on February 12 and 28, 1985. } 8503050284 850228 PDR i O ADOCK 050003B2 PDR
competence to safely operate the Waterford Steam Electric Sta-O tion, Unit 3, in accordance with NRC regulatory requirements. Motion at 1. Joint Intervenors have not shown good cause for the need to file the Supplement. The filing is suspiciously untimely. Further, it consists primarily of arguments which represent Joint Intervenors' positions on current public debates in southeastern Louisiana which have nothing to do with the safe operation of Waterford 3. These debates concern the proposed allotment to LP&L and New Orleans Public Service Inc. (NOPSI) of the power generation from the Grand Gulf 1 nuclear power plant, the extent to which the City of New Orleans has regula-tory authority over NOPSI, and the appropriateness of the rotating blackout procedures used during the power outage caused by the freezing weather in January. None of the public debates bears any rational relationship to the operation of Wa-terford 3 or to the character and competence of Applicant to operate the plant. None of Joint Intervenors' allegations is supported by. competent evidence, and they rely on an extraordi-nary degree of misleading innuendo, factual distortion, and unsupported conclusions. Applicant urges that the motion for leave to file the Sup-plement be denied, and that the proffered Supplement be re-jected. n
I. JOINT INTERVENORS HAVE NOT SHOWN GOOD CAUSE TO FILE SUPPLEMENTAL ARGUMENTS The Commission's rules on motion practice are clearly set forth in 10 C.F.R. $ 2.730(c). The rules provide a simple pro-cedure: a movant files his motion, the respondant and other parties file their reply briefs, and the Appeal Board makes a decision on the basis of the filings. As discussed in Appli-cant's Answer in Opposition to Joint Intervenors' Motion for Leave to File' Reply, February 1, 1985 at 2, reply briefs can only be filed with leave from the Appeal Board. Such leave will only be granted sparingly and only upon a showing of good cause. The same requirements apply to " supplemental" argument. See Consumers Power Company (Big Rock Point Nuclear Plant), ALAB-636, 13 N.R.C. 312, 322 (1981); Cincinnati Gas & Electric Company (William H. Zimmer Nuclear Station), LBP-79-22, 10 N.R.C. 213, 218, n.5 (1979). The purpose of the rule is to avoid an unending exchange of argument and counter-argument be-tween mov' ant and respondant. The rule also insures that par-ties will come forth with their complete position in a single submission so that the Appeal Board can make a decision without having to wait for additional filings. Joint Intervenors' Supplement is at odds with these con-siderations. The Supplement represents Joint Intervenors' sec-ond attempt to add support to their November 8 motion to reopen the record. Their first attempt, filed as'a " reply" on January 25, has already spawned one round of counter-filings. It is n
4 now well over three months since Joint Intervenors' motion to reopen was filed, and Joint Intervenors wish to make still more i allegedly supporting arguments. By continuing to add addition-al arguments, Joint Intervenors can indefinately postpone reso-lution of the issues. This process must come to an end. In light of the fact that all of their filings, including the original motion to reopen, have been late, and in light of the fact that Joint Intervenors have already once asked for leave to file additional arguments, they must show some compelling reason justifying the filing of the Supplement. Joint Intervenors have given no such compelling reason. They have made no showing of good cause. Their only attempt in this regard is their statement that they learned of the infor-mation forming the basis of their supplement only "within the last few weeks." Motion at 1. In fact, the "new information" upon which the Supplement draws has been available for about a month or more. Joint Intervenors' motion to reopen and the initial responses have been before the Board since December, 1984. Under these circumstances, it is unreasonable for Joint Intervenors to have waited a month to maxe a supplemental fil-ing at this late date, and Joint Intervenors have offered no excuse for doing so. Given the length of time the information was in their pos-l session, the timing of Joint Intervenors' filing is intriguing. On February 19, 1985, Board Notification 85-016 advised the Ap-peal Board that the Staff would recommend to the Commission in f ! 1 o
a briefing to take place on February 26 that Waterford 3 be al-lowed to ascend to full power. Joint Intervenors served their Supplement on February 25, the day before the scheduled briefing.2/ This is suspiciously similar to procedural tactics ' employed in the past by the Government Accountability Project (GAP), Joint Intervenors' counsel, in the Calloway and Diablo Canyon proceedings and in this proceeding when they filed their untimely motion to reopen just days after Applicant had an-nounced that Waterford 3 was physically complete and ready for fuel loading. See Applicant's Answer to Motion to Reopen at 7. Joint Intervenors have not explained why the information being profferred is necessary to supplement the hundreds of 1 pages'of material they have already submitted. Moreover, they have not even addressed the issue of whether the new arguments raised have a reasonable nexus to the basemat issue from which the Appeal Board's jurisdiction in this matter is derived. See ALAB-792 and ALAB-797. While the Appeal Board noted the diffi-culty involved in determining which of the many issues raised in the motion to reopen were unrelated to the basemat issue for purposes of determining jurisdiction, ALAB-797 at 2-3, it is difficult to see how the issues raised in the Supplement would have any conceivable relationship to the basemat issue. At the very least, Joint Intervenors should have addressed this point as part of their burden to show good cause for their untimely filing. 2/ The briefing has since been rescheduled for March 6, 1985.
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Joint Intervenors have clearly failed to demonstrate good cause for submitting supplemental argument, and the motion for leave to file the Supplement should therefore be denied. II. NOPSI SECURITIES OFFERING The first of the four allegations presented in the prof-fered Supplement is a startling example of factual distortion and misleading omissions by Joint Intervenors. They allege that Middle South Utilities, Inc., and NOPSI failed to dis-close, in a Form U-l Application-Declaration to the Securities and Exchange Commission, the City of New Orleans' legal posi-tion that the City's approval was needed for a securities of-fering by NOPSI. Supplement at 1-2. This, Joint Intervenors assert, casta doubt on the " honesty and integrity" of Middle South. Id. at 2. In support of the allegation, Joint Interve-nors provided a newspaper clipping (JI Exhibit 1) and the December 21, 1984 Form U-l (JI Exhibit 1A). In fact, far from being concealed, the City's legal posi-tion was specifically and directly disclosed in the Form U-1, and the matter has.been extensively and publically aired in conjunction with the offering. Exhibits F-1, F-1(a) and F-2 of the Form U-l are opinions and memorandum of counsel which dis-cuss in detail the legal controversy that Joint Intervenors ac-cuse Middle South of failing to reveal in the Form U-1. Joint Intervenors did not acknowledge the existence of the exhibits, and even though they were a part of the Form U-l Application-
Declaration, Joint Intervenors unaccountably failed to include l them in JI Exhibit lA. The Form U-l Exhibits F-1, F-1(a) and F-2 are attached hereto as Applicant Exhibits 1, 2 and 3, re-spectively. It gets worse. Joint Intervenors also failed to reveal that the issue was thoroughly addressed in a special public proceeding before the SEC in which the City of New Orleans in-tervened. Following the disclosure in the Form U-l in accor-dance with the provisions of the Public Utility Holding Company Act of 1935, the SEC published a notice affording opportunity for public comment and intervention in the proceeding. SEC Re-lease No. 23563, File 70-7069, January 4, 1985, 50 Fed. Reg. 1659 (January 11, 1985), attached hereto as Applicant Exhibit 4. The City of New Orleans filed a Notice of Appear-ance and Comments on January 29, in which it briefed its posi-tion on the City's right to regulate the sale of securities by NOPSI. Applicant Exhibit 5, attached. The companies' February 5, 1985 response to the City, and the SEC's Memorandum and Opinion (SEC Release No. 23612, File 70-7069, February 21, 1985) sustaining the companies' position, are attached as Applicant Exhibits 6 and 7, respectively. In addition, NOPSI had filed on February 1, 1985, a Form 8-K Current Report with the SEC pursuant to the public disclo-sure provisions on the Securities Exchange Act of 1934. The filing reported the current positions of the New Orleans City Council with respect to recapturing regulatory jurisdiction and e
O taking over NOPSI, and the law suits brought by the City and NOPSI ratepayers. Applicant Exhibit 8, attached. Aside from the allegation of nondisclosure being de-monstrably false, it is not relevant to this proceeding. Applicant is not a party to the securities offering. III. STATEMENTS OF VICE PRESIDENT Joint Intervenors allege that remarks made by Applicant's Senior Vice President, Roth S. Leddick, support their proposed contention on management competence. Supplement at 2-3. Their allegation is based entirely on their interpretation of state-ments paraphrased in a newspaper account of the meeting. (JI Exhibit 2). The newspaper article paraphrases Mr. Leddick as saying after a meeting with a local Rotary Club that changes in NRC regulatory requirements caused large increases in the cost of Waterford 3, and that the utility spent a large sum of money in response to the NRC investigation effort begun in April 1984, but it did not make the plant safer. Solely on the basis of this article, Joint Intervenors assert that Mr. Leddick's atti-tude toward NRC regulation is one of disrespect, that he does not understand the seriousness of quality assurance, that he believes that the inspection efforts were a " waste of time," and that he does not have the willingness or desire to carry out future programs. Supplement at 3. In no vay can the news-paper article be construed to support Joint Intervenors' assertions.
a As the article itself makes clear, Mr. Leddick was ad-dressing the Rotary Club for the purpose of explaining the
. costs of Waterford 3. His statement that increases in costs can be attributable to changes in NRC regulation is a view widely held by industry and was made in the context of explaining costs. It was not intended, as Joint Intervenors imply, to be an indictment of the NRC. The words in the arti-cle stating that the NRC " investigation cost LP&L $150 million but it did not make the plant safer," which Joint Intervenors claim have great significance, are actually the words of the reporter paraphrasing Mr. Leddick. JI Exhibit 2. Even if Mr.
Leddick said those exact words, when viewed in context it is obvious that Mr. Leddick was referring to the fact that the
$150 million investigation demonstrated that the plant had been properly. constructed such that substantial physical modifica-tions were not requi, red.
Applicant's extensive and comprehensive program undertaken in response to the NRC'u concerns, and the satisfactory resolu-tion of those concerns, under the direction of Mr. Leddick him-self, graphically demonstrate the exact opposite of Joint In-tervenors's unsupported charges concerning Mr. Leddick. See Applicant's. November 30, 1984 Answer to Motion to Reopen at 30 and attached Responses to Specific Allegations in the Joint In-
-tervenors' Motion to Reopen the Record at 77-79, Item C; see also NRC Staff's Response to Motion to Reopen at 17.
_g. l b
This Appeal Board has repeatedly cautioned Joint Interve-nors' against reliance on undocumented newspaper articles such as Exhibit 2 in support of their arguments. Louisiana Power & Light Company (Waterford Steam Electric Station, Unit 3), ALAB-753, 18 N.R.C. 1321, 1330, n.16 (1983); Id., ALAB-732, 17 N.R.C. 1076, 1089 (1983); Memorandum and Order, February 28, 1984 at 3 (unpublished). Such articles do not rise to the level of competent evidence, Pacific Gas & Electric Company (Diablo Canyon Nuclear Power Plant, Units 1 and 2), ALAB-775, 19 N.R.C. 1361, 1366-67 (1984), and cannot serve as a basis for Joint Intervenors' motion to reopen the record. Memorandum and Order, supra. IV. JANUARY 21 POWER OUTAGE Misleading innuendos and unsupported leaps in logic char-acterize Joint Intervenors' third allegation concerning the loss of power that occurred on Applicant's system during the freezing weather in January of this year. Supplement at 3-5. The thrust of +he allegation is that, because the power outage occurred, Applicant is not competent to operate Waterford 3. There is no support, in logic or in fact, for such an allega-tion. Applicant's technical competence to operate Waterford 3 safely has not been brought into question by these events, and not even the Joint Intervenors' newspaper clippings -- which do not constitute competent evidence -- make such a suggestion. l I .- i The only link suggested between the power outage and the s Waterford 3 facility is the assertion that individuals who had once been involved in the project, but no longer are, were in charge of operation of the fossil units which lost power as a result of the cold weather. Supplement at 5. There is no evi-dence whatsoevar that the' loss of power was caused by technical incompetence, and certainly no relationship demonstrated be-tween the events surrounding the power outage and the con-struction of Waterford 3. In any event, the contention in Joint Intervenors' motion to reopen which the Supplement seeks to support is that Applicant lacks the requisite character and competence to operate the plant. Motion to Reopen at 15. Joint Intervenors' have established by affidavit that the indi-viduals they would like to blame for the power failure are not involved in the operation of Waterford 3. Supplement at 5; see JI Exhibit 9. In addition, Joint Intervenors attempt to leave the im-pression that there is a real question in the minds of the New Orleans City Council of whether Applicant deliberately "orches-trated" the power failure. Supplement at 4. The charge is ob-viously frivolous. A careful reading of Joint Intervenors newspaper accounts indicates that no such allegation was made by the City Council, not even at the council meeting in which the chairman of Middle South Utilities, Inc., was present to discuss the power failure. See JI Exhibit 4, column 7. That allegation, much heralded by the press, was apparently made unofficially by a single councilman. Id.
n- ~ 4 l g l .- In the same light, Joint Intervenors state that the City p Council "has begun an investigation to determine the causes of l , the blackout and whether LP&L and NOPSI management deliberately caused the blad:out to promote the need for Grand Gulf 1 and ! Waterford 3." Supplement at 4. Nothing in the newspaper arti-cles cited in support of that statement, JI Exhibits 4 and 5 (incorrectly cited as Exhibit 7), or any of Joint Intervenors l other exhibits, even remotely lends credence to such an outra-geous allegation. See, e.g., JI Exhibit 4, column 2, which states that "[t]he New Orleans City Council called for an in-vestigation of whether rotating blackouts -- ordered by LP&L and its sister power company, New Orleans Public Service Inc.. after the generating failures -- were necessary." Joint Intervenors then say that "[ilt appears that the New Orleans City Council's investigations may find that LP&L man-agement either deliberately, or through gross mismanagement, caused a blackout of New Orleans..." Supplement at 4. There is not a shred of support for such a statement in any of Joint Intervenors' exhibits. In fact, the report of that investiga-tion 3/ makes no suggestion of such intent and does not other-wise support the allegation. 3/ See "Second Report on Loss of Electric Power in City of l New Orleans on January 21, 1985," January 29, 1985 (attached to, but unrelated to, JI Exhibit 9 and not cited in the Supple-ment). l l l -
V. ALLOCATION OF GRAND GULF GENERATION Joint Intervenors' final allegation is that Middle South Utilities, Inc., rather than Applicant, will be ultimately re-sponsible for the management of Waterford 3. Supplement at 5-7. The allegation is unsupported, is contrary to the facts of record, and is irrelevant to safety concerns. The management responsibilities for Waterford 3 are clear-ly set out-in the operating license application. Applicant is an operating company subsidiary of Middle South Utilities, a public utility holding company. Each operating company of the Middle South system operates the facilities in its service area. Amended Application for Licenses, General Information, at 2. Applicant, as owner of Waterford 3, is responsible for the design, construction, and operation of the plant. FSAR, S 1.4. There has been no showing that Middle South has been, or is inclined to be, involved in the management of Waterford 3, or that there would be any reason to suspect that safety at Waterford 3 would be subordinated to other considerations. Joint Intervenors only basis for the charge is, once again, a newspaper account, and, once again, an account which has not been accurately characterized. Joint Intervenors' al-lege that an LP&L executive testified that the chairman of Mid-die South had coerced the president of LP&L to purchase a larger share of the power from Grand Gulf 1 by threatening him with dismissal. The newspaper article itself, however, JI
~u Exhibit 10, puts a somewhat different slant on the story. The executive's deposition testimony was tentative and uncertain on the subject, and represented only the witness' impression. JI Exhibit 10, column 4. In counterpoint, the article reported th'at the-Middle South chairman and the LP&L president both cat-egorically denied the story.
More to the point, however, a parent utility holding com-pany making its wishes known to the subsidiary operating compa-nies concerning financial arrangements for allocation of power resources has no bearing on the management of one of the op-erating company's generating stations. Joint Intervenors do not allege that such plant management involvement has h'appened in'the past, and provide no basis for assuming that it will happen-in the future. Moreover, there is no reason to suppose that the parent company could, or would have any reason to, override the management of the operating company in any way that would compro:.iise_the public health and safety. The allegation is contrary to the record and is totally without support or relevance to the safe operation of Waterford 3. VII. CONCLUSION Joint Intervenors have attempted to supplement their mo-
-tion to reopen by advancing four new allegations in support of their contention on Applicant's character and competence. The l
untimeliness of the allegations is strategically suspicious, 4 1 l l l L e e
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andlnone bears any reasonable relationship to, or casts doubt upon, Applicant's character or competence to operate
, Waterford 3 safely. Moreover, none of the allegations bears any nexus to the basemat issue upon which this Appeal Board's jurisdiction is defined.
The allegations are not supported by competent evidence. Most of Joint Intervenors' exhibits are newspaper clippings. The only two that are not consist of an SEC filing in which the portion contradicting the allegation was withheld, and an uncited investigation report which undermines the allegation that the power outage was deliberately orchestrated. The docu-- ments and the newspaper clippings were mischaracterized to such an unconscionable extent that serious doubt must be entertained with respect to the totality of Joint Intervenors' motion to reopen. i l I r
For all of the foregoing reasons, Applicants respectfully submit that Joint Intervenors' motion for leave to file the Supplement should be denied and the Supplement should be re-jected. Respectfully submitted, SHAW, PITTMAN,.POTTS & "ROWBRIDGE s -{ By- % / B M W.~dhurchill, P.d. Dean D. Aulick, P.C. Alan D. Wasserman Counsel for Applicants 1800 M Street, N.W. Washington, D.C. 20036 (202) 822-1000 Dated: February 28, 1985 \ - l
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MENNETH P. CAf,TE C.TMEoCoRE ALPAuoM tu ENJ NR SLATERIH otomoE F. RIESS December 20, 1984 Securities and Exchange Commission Washington, D.C. 20549
Dear Sirs:
With respect to the joint Application-Declaration on Form U-l which is to be filed on or shortly after the,date hereof by New Orleans Public Service Inc. ("NOPSI") and Middle South Utilities, Inc. (" Middle South") contemplating the issuance and sale by NOPSI, from time to time not later than December 31, 1985, of not more than $40,000,000 in aggregate principal amount of its First Mortgage Bonds (the " Bonds") and not more than 200,000 shares of its Preferred Stock, Cumulative, $100 par value (the " Preferred Stock"), each in one or more series, and the issuance and sale by NOPSI to Middle South, from time to time not later than December 31, 1985, of not more than 4,000,000 additional shares of NOPSI's Common Stock, $10 par value (the " Additional Common Stock"), we advise you that in our opinion: (1) NOPSI is a corporation duly organized and validly existing under the laws of the State of Louisiana. l (2) In the event that the proposed transactions are l consununated in accordance with said Application-Declara-tion, as it may be amended, and within the limits specified in NOPSI's Mortgage and Deed of Trust, as supplemented and as proposed to be further supplemented, and its Restatement of Articles of Incorporation, as amended and as proposed to be further amended: (a) All state laws which relate or are applicable ' to the proposed transactions (other than so-called
" blue sky" laws or similar laws, upon which we do l
not pass herein) will have been complied with. A i Memorandum in this connection is filed herewith as Exhibit F-1(a). (L
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t Securities and Exchange commission December 20, 1984 Page 2 (b) The Bonds will be valid and binding obligations of NOPSI in accordance with their terms, except as limited by bankruptcy, insolvency or other laws affecting , enforcement of mortgagees' and other creditors' rights.
- 2) The Preferred Stock and the Additional common Stock will be validly issued, fully paid and non-assessable, and the holders thereof will be entitled to the rights and privileges appertaining thereto
' set forth in NOPSI's Restatement of Articles of Incorporation, as amended and as proposed to be further amended. (d) The consummation of the proposed transactions will not violate the legal rights of the holders of any securities issued by NOPSI. Our consent is hereby given to the use of this opinion as an exhibit to the Application-Declaration on Form U-1. Very truly yours, 4Y =m MONROE & LEMANN n
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RE: New ' Orleans Public Servicei:Efn~ch L-w :. .: . . g., c ,,,, u s u.- MEMORANDUM . 4 New Orleans Public Service Inc. ("NOPSI"-)-provides. gas l service throughout the City of New Orleans (" City") and electric l service throughout the City except for the Fifteenth Ward
- thereof, and has done so for many years.
Prior to January 1, 1982, NOPSI's utility services in the , City (which then included transit as well as gas and electric) were regulated by the City, through its Council, pursuant to Sections 4-1604 and 4-1605 of Chapter 16 (Department of ' Utilities) of the City's Home Rule Charter, effective May 1, 1954 ! (before that, pursuant to Section 1(g) of the City's predecessor
" charter", Act 159 of 1912, as amended) and, with respect to the specific matters set forth therein, pursuant to Ordinance No.
6822, Commission Council Series, as amended, of the City, dated April 21, 1922, known and hereinafter referred to as the
" Settlement Ordinance", a copy of which is attached as' Exhibit A hereto. The transit operations of NOPSI were divested'and NOPSI terminated its transit business effective at midnight on June 30, 1983.
By virtue of Ordinance No. 8264, Mayor Council Series of the ! City (the' " Amending Ordinance"), which was approved by the electorate of the City at an election held on November 28, 1981, all of the regulatory powers of the City with respect to electric and gas utilities operating in the City were transferred to the Louisiana Public Service Commission ("LPSC") effective January 1, 1982, and such ordinance, by its terms, amended Section 4-1604 of the City's Home Rule Charter to: (A) exclude references to " electric light, gas, heat, power" as being subject to "the c exercise of its (City's] powers of supervision, regulation and control"; l (B) include a proviso that "beginning January 1, 1982 the City's powers of supervision, regulation and control shall not extend to nor include gas, heat, power and electric public utilities" (Emphasis added): (C) include specific and limiting references i to the City's powers with regard to public l utilities " subject to its (City's] powers of i supervision, regulation and control"; and
s .. a i (D) add a new subsection (subsection (4)) to Section 4-1604,'which new subsection provides i that the LPSC "shall regulate New Orleans Public Service, Inc. and Louisiana Power and Light Company, their respective successors and assigns" and that the City Council shall furnish to the LPSC "all information, records, documents and such other materials as shall be necessary and proper for the transfer of regulatory powers" from tha'said Council. Section 4-1605 was also changed by the Amending Ordinance, consistently with the foregoing, to reflect that the Department of Utilities may inspect only the books and plants of any public utility " subject to regulation by the City". These specific language changes to Sections 4-1604 and 4-1605 not only mechanically and legally effected the desired changes but also conveyed an accurate reading of the legislative intent of the Council (as affirmed and approved by the electorate), i.e., the transfer from the City to the LPSC of all regulatory powers of the City pertaining to gas and ele ~ctric utilities. This clear manifestation of legislative intent is also reflected in the language in the introductory paragraph of the Amending Ordinance which calls for certain proposed amendments to the Home Rule Charter " relative to surrender of the Council of the City of New Orleans' powers of supervision, regulation and control over gas, heat, power and electric public utilities within the City of New Orleans to the Louisiana Public Service Commission." (Emphasis added) Title 33 of the Louisiana Revised Statutes of 1950, as amended, deals with Municipalities and Parishes. Chapter 10 i thereof, Part IV of such Chapter 10, and Sub-Part A of such Part IV deal, respectively, with Public Utilities, Regulation of Public Utilities, and Surrender to Public Service Commission of Power to Regulate Municipal and Parish Utilities. Sub-Part A is composed of R.S. 33:4491 through 4496 and R.S. 33:4491 contains an introductory paragraph which provides that:
"Any town, city, or parish exercising powers of supervision, regulation, and control over any local public utility, desiring to surrender those powers to the Louisiana Public Service Commission may submit the question of surrendering these powers to the qualified electors of the town, city, or parish, . . ." (Emphasis Added)
It should be noted that the underscored words are identical to those used in the Amending Ordinance.This conclusively evidences an intent on the part of the City to comply with that portion of the Louisiana Revised Statutes which provides for surrender of i n
l- , l i , supervision, regulation and control over any local public utility i to the LPSC.
- I
) R.S. 33:4493 provides for the form of ballot to be used in the election and it is particularly instructive to observe that i the only separation of surrender of powers of control permitted I in the ballot is that of separation of surrender of control over ; certain kinds of public utilities (gas, electric, water works,
) etc.) so as to surrender control only of the particular
- kind or kinds of public utilities specified in the ballot, and f not certain functions of an individual public utility. The
! entirety of this concept is carried through in R.S. 33:4494 and
- R.S. 33
- 4495 dealing with divestiture and reinvestiture of such
! control. In providing for the canvassing of returns, declaring i the result of the election and vesting control in the LPSC, R.S. 33:4494 provides that upon the filing of certain papers with the LPSC, the powers of control theretofore vested in the town, city or parish government over any class of public utility which a
- majority of the qualified electors; surrendered in the manner
! hereinabove provided, shall thereupon vest in the LPSC until such } time as the municipal or parish government reinvests itself with l such powers of supervision, regulation and control. R.S. 33:4495
- merely provides for the election process to be used to reverse i the election contemplated and addressed by R.S. 33
- 4494'. Nowhere-j in this Sub-Part is there any contemplation of, or any~ provision i for, partial divestiture or partial reinvestiture of the powers j of supervison, regulation and control over a class of public i utility. This statutory approach is eminently reasonable and j practical.
! The Amending Ordinance and the results of the election it ! called for are necessarily subject to Article 23 of the Louisiana Civil Code, which provides in part as follows with respect to express or implied repeal of laws:
1 I
"The repeal is either express or implied:
It is express, when it is literally declared by a subsequent law; . It is implied, when the new law contains l provisions contrary to, or irreconcilable I with those of the former law." An interpretation of this Article is found in State v. St. ! Julian, 221 La. 1018, 61 So. 2d 464 (1952) wherein the Supreme Court of Louisiana discusses particular principles of statutory l l interpretation applicable to the Amending Ordinance and the l Settlement Ordinance and supportive of the conclusion that the j November 28, 1981 election operated to completely divest the City ! of any electric or gas regulatory control over NOPSI. } One such principle of statutory interpretation deals with l
- repeal by implication and concludes that while repeal by implica-l, tion is not favored, where the obvious purpose of the law is to
~
g i f i [' 4 i l cover the whole subject matter therein dealt with, such statute i j supersedes all prior pertinent legislation. This is the exact situation existent with regard to the Amending Ordinance, i.e., it addresses the entirety of regulatory divestiture and, in doing so, not only uses the exact language set out in the Revised !- Statutes for such divestiture. procedure but reflects the true 1 intent of the Amending Ordinance. Consequently, any provision of
- an ordinance in conflict, such as Section 9(g) (quoted and i- discussed hereinafter) of the Settlement Ordinance, with the Amending. Ordinance change of the Home Rule Charter, must fall,
! without even considering the priority of Home. Rule Charter 4 provisions over mere implementing ordinances, or the later j adoption of the Amending Ordinance (1981) as opposed to the l Settlement Ordinance (1922). See also W. E. Perry v. City of Monroe, et al., 360 So. 2d 1352 (La. App. 2d Circuit 1978) which, ! while holding that a provision of a proposed electric utility i operating agreement prohibiting the citizens of Monroe or their
- governing body from taking any action (including the calling of I' an election) to reinvest the city with regulatory power over the electric system during the term of a franchise to a public l utility was not contrary to constitutional and statutory
{ provisions governing reinvesting of regulatory power, also observed, at page 1362, that " implied repeals are not favored .
- and ... will not be resorted to except where the inconsistency is j too clear and plain to be reconciled." Certainly, the incon-l sistency between the Amending Ordinance and the Settlement l Ordinance is'"too clear and plain to be reconciled."
Under Louisiana statutory law (H.S. 45:1175), a public utility, the security issues of which are subject to regulation by the Securities and Exchange Commission ("SEC") under the l Public Utility Holding Company Act of 1935, is exempted, as to the issuance of securities, from regulation by the LPSC. NOPSI i is, of course, regulated as to its security issues by the SEC
) under the last mentioned Act. Absent more, therefore, there
! could be no question that all State and local laws applicable to l NOPSI with respect to the proposed transactions (issuances and sales by NOPSI of its Common Stock, Preferred Stock and First
~
i' Mortgage Bonds) will have been complied with upon the issuance of an order of the SEC granting the joint Application-Declaration of NOPSI and Middle South Utilities, Inc. with respect to such pro-posed transactions and permitting said Application-Declaration to become effective and upon the consummation of such transactions in accordance with the Application-Declaration and such order. , 1 It is noted that Section 9(g) of the Settlement Ordinance provides as fallows: ) "No securities of the new Company, other j than evidences of debt having maturities of j twelve months or less and securities issued j as stock dividends neither of which has any effect on the rate base, shall be issued without the previously obtained approval of the Council." l
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However, study of the provisions of the Settlement Ordinance in the light of the circumstances _ set forth herein leads inescapably to the conclusion that the settlement ordinance is a regulatory ordinance and that it (and particularly Section 9 thereof) has been impliedly but effectively repealed by the adoption of the Amending Ordinance calling for ". . . surrender of the . . . powers of supervision, regulation and control over gas, heat, power and electric public utilities within the City of New Orleans . . .". It is noted first in this connection that the Settlement Ordinance, at the beginning-thereof, premises everything which follows by commencing: - "Be It Ordained, That in the exercise of f its powers of regulation, supervision and control over the street railway, electric and gas properties in the city now owned by
' the New Orleans Railway & Light Company, the Commission Council of the City of New Orleans does hereby find and order as follows:" (Emphasis added) .
- It should further be noted that, commencing with " powers", the underscored words are those also used in R.S. 33:4491 et seq.,
! and in'the Amending Ordinance, all of which indicates that in the Amending Ordinance there was a conscious intent to surrender such ' regulation, supervision and control. Also, Section 2 of the Settlement Ordinance, dealing with fares, rates and charges, I states in part that f
"The Commission Council shall, under its regulatory power, make such rules in respect to service and operations as may be necessary or proper, . . ." (Emphasis'added)
Even more enlightening and to the point with respect to the present question, however, is the precise introductory language of Section 9 itself. The first paragraph of Section 9, which applies to and' governs all of the lettered subparagraphs found later in Section 9, reads as follows:
"So long as the City of New Orleans or its successors as the regulatory authority with supervision, regulation and control of the company and its properties --- shall not disturb, interfere with or change the valuation or rate of return herein fixed, the conditions and restrictions hereinafter l set out shall be and continue in full force and effect and shall be binding upon and observed by the Company, its successors and assigns." (Emphasis added)
L o
s 8 a Again, the second unnumbered paragraph of said Section 9, which likewise appears ~before the lettered subsections dealing with specific matters and, therefore, applies to all of said subsections, provides in pertinent part that:
. . . it is a condition _ hereof that each !
and all of the stipulations, restrictions and conditions hereinafter contained or provided for shall be, remain and continue in effect only so long as the City of New Orleans or its successor as the regulatory authority, shall not change or modify the provisions hereof concerning the rate base and the rate of return; and if said regulatory authority . . . " (Emphasis added) It is concluded, therefore, that the Settlement Ordinance and particularly Section 9 and the specific provisions set forth in the lettered subsections of Section 9 were meant to apply and applied to the City only in its capacity as regulatory authority, and that when the electorate of the City surrendered and transferred the City's regulatory powers and jurisdiction over electric and gas util'ities in the City to the LPSC, the' Settlement Ordinance, and particularly Section 9 thereof, was impliedly and effectively repealed, i.e., nullius juris. Therefore, insofar as NOPSI and its participation in the proposed transactions are concerned, in the event that the tran-ractions proposed by NOPSI are consummated in accordance with the Application-Declaration and an order of the SEC granting the Application-Declaration and permitting it to become effective, then all State and local laws applicable to NOPSI with respect to theproposedtransactionswillhavebeencompliedyith. December 20, 1984
& + raw Monroe & Lemann
_ --- n
3 .- , a: Exhibit A
+
a Mayoestty of New Orleans. FAREB. RATES AND CEARGES City Hall April 21st,1923. Calendar N2. 7063. -. Sec. 2. Fares, rates and charges for the respective services shan be such as to pro-duce a net rmane (after operating ex. Y NO. 6822 COMMISSION COUNCIL ' penses, taxes and adequate renewal and re-SERIES . placement and other reserves, necessary to maintain the opmting eMeiency of the 4 Ile It Ordained, That in the exercise of pnpedy at au times) equivalent to 7% its powers of regulation, supervision and control over the street, railway, electric and C* "igm"k"'","h""[*M',f,'$ % t cil shsH, under its regulatory power, make Ye! ben s' way & Lig$ m a y, such rules in respect to service and opera. 'y the Commission Council of the City of New tions as may be riecessan or pnpen and it 84 leans does hereby find and order as fol- will at all times require the properties to be 3 lou s. efficiently and economically managed and operated. g VALUATION FOR RATE MAKING Y Section 1. Valuation for Rate-Making -' (Rate Base) of the properties of the New FINANCIAL PLAN Orleans Railway & Light Company and its subsidiaries, as of December 31,1920, shall Sec. 3. Subject to the approval of the , be the arrrerste sum of $44.700,000.00 Federal Judge. who has junsdiction of the
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idmded into Gas Department $8.652.000.00, existing receivershi , the financial plan of Electric Department $15.256.557.00. Railway the new Company a make disposition in Department 320,791.443.00) and the value nfennee u existin utstanding securities for rate-makine (Rate Base) at any date of the New Orleans ilway & Light Com- . cub =equent to December 31, 1920, shall be pany as follows: ., . the said aggregate sum (and said respective (a) Outstanding underlying bonds to re- ' departmental sums), and in addition thereto main undisturbed. the following: (b) Pnsent outstandint 4% per cent h : tu) New construction and other expen. General Mortgage Bonde, due July 1,1935 g ditures subsequent to Decemben 31, 1920, (for subordinate of their lien so as to pro- e and chargeable to " Capital or Investment" vide for future betterments s'nd, improve- o account, under the Interstate Commerce ments and for necessary refunding oper-Commission or other standard classifica, stions through a new first and refunding I* tion of public utihty accounting, approved Open Mortgage Bond Issue) shall be an. . cv the Commission Council, plus the bal- C. hanged for 25% in cash and the remaining + snee of proceeds, if any, from the sale of .59 in New General Lien 4% per cent j necuoties approved by the Commission Bonds, due July 1,1935, in the form of a Council and held in escrow for the payment closed mortgage. The said new 4% 6 of expenditures chargeable to said " Capital cent mortgage shah rank immediately a er l
- or Investment' account; said balance to be and be subordinated to, the said New First adjusted for the amount of said expendi, and Refunding Open Mortgage.
tunes. if an. . apphenble for payment from (c) The present outstanding Refunding funds so held in escrow. and General Lien 5% Bonds, due November (b) From said rate base of $44,700.000.00 1,1919, with defaulted interest thereon, to as of December 31, 1920, as hereinbefore be refunded by $5.129,000.00 Income Bonds, Jerined, there shall be deducted the then due November 1,19.9, bearing 6% per an-cash salue of any property of any descrip- . num interest (adjusted for defaulted inter-tion, that in the future, for any reason. est subsequent to June 1,1922). purpose or cause, shall be disposed of b (d) The present outstanding defaulted , the Company or its successors; provi 7% Gold Notes and defaulted interest there. that if said cash value shall be re-invested on, to be refunded by $3,955,000.00 Pre-in expenditures chargeable to said " Capital ferred 7% Cumulative Stock (adjusted for or Investment' account, then no amount defaulted interest subsequent to June 1. shall be added to nor deducted from the 1922). Mate Base. (e) The balance (after the issuance of (c) There shan be added or deducted (as securities to provide for Receiver's Certift-the facts may show) the average increase cates and the expenses of the Receivership) or decrease,if any,in e.urrant working capi. up to the amount of the allowable Rate tal and investment in materials and supplies Base, at the date of re-organisation, shall over or under the average working capital be common stock issue to represent the and investment in matertals and supplies equi y in the property, now represented by foi the calendar year 1920, such increase or
- decrease to be determined by the standard stoe classification accounting referred to above. (f) Said re-organization into said new company to be accomplished at the earliest (As Aasended by Ordinamee No. 8423 possible date anJ. within su months from the date of the passage of this orMamare C.C.5, Mar 2,1925).
2 4 L -.
+ - _ - _ _ _
4< M.53 p, . [L I _ .? . y. as 3.r.- .w. ) All property and assets of every descrip. .. l by the Council, subject to legal delays, be. tion including net current assets (in- ! yond centrol provided,however, that if said cluding cash) owned by the Railway - a,C"==b shall not be accomplished Department of the New Orleans Rail- , within aime months from said date, then the p Commise6en Council reserves the right to way & Light Company on December , s~ 31, 1920 320,791,443.00 abrogate this arrangement. k And the City shall have a perpetual op- , RATES FOR TEST PERIOD ti n t purchase one or more of said de-Sec. 4. Upon the termination of the ex- pa ntal properties at h said respeedve isting receivership and the re-organization figures, plus or minus an amount equal to into the new company, the following rates the additions or deductions to or from the and charges will be adopted as a test for a Rate Base of said one or more properties twelve-month period. (determined and defined in Section 1 of Car far. 7 cents Ordinance No. 6822 C. C. S., as changed ~ 31.30 net per 1000 cubic feet and amended by this Ordinance) subsequent Gu to December 31, 1920, and up to the date Domestic and Retail Light and Power, of the exercise of the option. Electric Rates As at present. The general transfer system, now in ef- (As Amended by Ordinames No, 8423 feet upon the railway system shall continus C.C.S., Wy 2, 1925). subject to modifications according to future exigencies under the regulatory powers of the Commission Council. BOOKEEEPING AND REPORTS FRANCHISES Sec. 5. l'he books of account of the new company shall be kept in accordance with Section 8. (a) The City and the New a standard accounting system, applicable to Company (or those responsible for organi-similar utilities, and approved by the Com- zation prior to the organization thereoD mission Council. Quarterly reports show- will aeree to details covering necessary new ing details of the operations, revenues and franchises or extensions of old franchises, - the arraneing of new routes and the making I expenses, and resources and liabilities of of any other changes in the physical prop-the Company shall be filed with the Com-mission Council and made public documents. erty which will contribute to more econom-subject to public inspection in the office of ical and satisfactory operation. , the Commissioner of Public Utilities. The (b) As soon as the reveses of the accredited representatites of the city sha!I street railway property make it feasible have access at all reasonable times to the within the limitations of the provisions ' books of account and records of the Com. hereof to reduce the fares for school pany and also to its power houses and car children attending public and parochial barns and gas plant and other properties. schools, a reduced fare for such school children will be inaugurated. DISPOSITION OF REAL ESTATE Sec. 6. Any real estate not now used nor reasonably likely to become useful in - the operations of the properties shall be sold as soon as practicable and the proceeds FIXED VALt!ATION thereof shall be reinvested in property use- Section 9. So long as the City of New Or. ful for the Company's purposes. leans or its successors as the reculatory authority with supervision, regulation a.nd PERPETUAL OPTION control of the company and its properties 1
-shall not disturis, interfere with or change Sec. 7. The City shall have the perpet. the valuation or rate of return herein fixed, ual option to purchase the properties at the the conditions and restrictions hereinafter sum of $44.700.000.00 as of December 31, set out shall be and continue in full force 1920, plus or minus additions or deductions and effect and shall be binding upon and I
hereinafter provided for, divided into: ol sers ed by the Company, its successors and assis.ns. , All property and assets ~of every descrip- p,hile nothine herein contained shall be
' tion, including net current assets (in, or .is mtended to be construed as affecting cluding cash) owned by the New or igamn:t the police powers of said City Orleans Gas Light Company on De. of Mw Oileans, or its successois, m respect -
cember 31, 1920 58l652,000.00 to any matter or thin:t within its jurisdic- , a tion as regulatory body or as constituting
' All property and assets of every descrip. any sucement on the past of the City to ,
tion, including net current assets (in- law ful d cluding cash) owned by the E!eetric forceo the exercise of any of its,t is a i Po*", or functions, nevertheless i 1 Light & Power Department of the New condation hereof that each and all of the Orleans Railway & Light Company on stipv'stions, restrictions and conditions 4 December 31,1s20 315,2~,6,587.00 4 i 3 . gm emp W 9
. _ gu- o . -eme= epaupguur
-w- .
M O
heretaatter contained or provided for shall (f) All dividends declared on the com-mon stock issued at the time of reorgani-be, renais and continue in effect only so zation, as provided in paragraph (e) of long as the City of New Orleans or its suc. section 3 hereof, shall be reinvested in the cessor as the regulatory authority, shall not property by the purchase of common stock change or modify the provisions hereof con- at par until the aggregate amount of divi-cerning the rate base and the rate of return; dends declared shall equal 40 per cent on and if said regulatory authority should said stock. change or alter either of said factors, then these conditions, stipalations and restrie-tions shall cease and become inoperative (g) No securities of the new Company, and, the Company and its successor, at its other than evidences of debt having maturi-option, shall be teleased from the obliga* ties of twelve months or less and securities tions in respect to same. Said restrictions saued as stock dividends neither of which and conditions are as follows: has any effect on the rate base, shall be issued without the previously obtained sp-(a) The total par value of the outstand. proval of the Council, Ing securities of the new company in the (As Aumended by Ordinamee N.,1443 form of capital stock, funded debt and other M.C.S., Aug. 21, 1954). evidences of debt having greater than twelve months' maturity, including under. lying bonds (less deduction for unamortized discount on said securities, sold with the approval of the Commission Council) shall RATE BASE AND RATE OF never exceed the rate base determined as RETURN AGREEMENT defined in Section 1 hereof. Sec.10. The Company binds itself never (b) Two-thirds of the members of the to infringe or violate or go contrary to sur Board of Directors shall be residents of of the provisions of Sections 7 and 9 so long New Orleans and representattve citizens, as the City shall not change or disturb the and the president shall at all ttmes reside rate of base and/or rate of return. in New Orleans. - (e) Before any disbursementa in any fiscal year can be made out of earnings or I surplus to securities, junior in rank to the DISPOSITION OF SUIT i new 48/s per cent bonds, there shall be . created a fund of $200,000, out of which Sec. 11. The suit of J. D. O'Keefe and fund 50 per cent shall be invested in better- others against the City of New Orleans now ments and improvements and 50 per cent pending in the United States District Court shall be utilized for the purchase and retire- shall be held in beyance. Upon putting the ment (by lowest bid) of said new 4% per within plan in operation. said litigation cent bonds: provided that said fund may be shall be dismissed. 31eanwhile no prejudice created either out of earnings or by the sale to any party to said litigation shall result of securities junior in rank to said new 4% by reason of this arrangement, so that if
- per cent bonds. Said securities to be issued the plan is not carried into operation, said '
' in accordance with Paragraph G of this litigation may be revived and continued section.
without prejudice. (d) Furthermore, before any disburse-ment in any fiscal year can be made on the preferred stock herein referred to in 31ETHOD OF ACCEPTANCE sub.section (d) of Section 3, there shall also be created an additional fund of $100,000. Sec.12. This Ordinance shall take effect Said fund shall be used for the purpose and only upon written acceptance and approval under the conditions, and shall be created by the Creditors of the New Orleans Rail-in the manner provided in sub-section (c) way & Light Company and other parties at , hereof for the said $200,000 therein re. Interest who may have the legal right to ferred to. accept same, which acceptance must be made not later than fifteen (15) days after the final passage of this Ordinance by the (e) (Repealed by Ordinasco No.1443 Commission CounctL M.C.S Aug. 21. 1958). h 4 0 a f I i i n
'( " '
App. Exhibit 3 Exhibit F-2 5 REID & RRil,E S T
. 40 WEST 5 7'" STREET MEW YOR K, N. Y.10019 i
313 3WODe4 M1 08 i WAgg1NOTON OFFICE NEW YONE OFFICE 1111 19ts STREET, N. W. b((L, O M 4 T *,. b 5 ? CABLE ADDRESS:"REIDAPT wASMINOTON. D.C. 20036 , OOCd hb & b.bbbE- TELEK: 710 S816731 RDFT NYK 303 888-0800 ** b* 230534 RDFTUN FAC5fMILE: 2OS 446-3337 , FACSIMILE: 313 603-3396 DIEECT DIAI. NUMBER December 20, 1984 Securities and Exchange Commission 450 Fifth Street, N. W. Washington, D. C. 20549
Dear Sirs:
With respect to the joint Application-Declaration on Form U-l which is to be filed on or shortly after the date hereof by New Orleans Public Service Inc. ("NOPSI") and Middle South Utilities, Inc. (" Middle South") contemplating the is-suance and sale by NOPSI, from time to time not later than December 31, 1985, of not more than $40,000,000 in aggregate principal amount of its First Mortgage Bonds (the " Bonds") and not more than 200,000 shares of its Preferred Stock, Cumulative, $100 Par Value (the " Preferred Stock") , each in one or more series, and the issuance and sale by NOPSI to Middle South, and the acquisition by Middle South, from time to time not later than December 31, 1985, of not more than 4,000,000 additional shares of NOPSI's common stock, $10 Par ( Value (the " Additional Common Stock"), we advise you that in our opinion: (1) NOPSI is a corporation duly organized and validly existing under the laws of the State of Louisiana. (2) In the event that the proposed transactions are consummated in accordance with said Application-Declaration, as it may be amended, and within the limits specified in NOPSI's Mortaage and Deed of Trust, as supplemented and as proposed to be further supplemented, and its Restatement of Articles of Incorporation, as amended and as proposed to be further amended: (a) all state laws which relate or are applicable to the proposed transactions (other than so-called " blue sky" laws or similar laws, upon which we do not pass herein) will have been complied with; l t
l
, j t
(b) the Bonds will be valid and binding obliga-tions of NOPSI in accordance with their terms, except as limited by bankruptcy, insolvency or other laws affecting enforcement of mortgagees' and other creditors' rights; (c) the Preferred Stock and the Additional Common Stock will be validly issued, fully paid and non-assessable, and the holders thereof will be entitled to the rights and privileges appertaining thereto set forth in NOPSI's Restatement of Articles of Incorporation, as amended and as proposed to be , further amended; (d) Middle South will legally acquire the Additional Common Stock; and (e) the consummation of the proposed transactions will not violate the legal rights of the holders of any securities issued by NOPSI or Middle South or any associate company thereof. We are members of the New York Bar and do not hold our-selves out as experts on the laws of any other state. In giving this opinion, we have relied, without independent investigation or verification, as to all matters governed by the laws of the State of Louisiana, upon an opinion of even date herewith addressed to you by Monroe & Lemann (A Professional Corporation), of New Orleans, Louisiana, General Counsel for the Company, which is to be filed as an exhibit to the Application-Declaration on Form U-1. Our consent is hereby given to the use of this opinion as an exhibit to the Application on Form U-1. Ve truly yo REID & PRIEST
1, l 4 g .. App. Exhibit 4
- X gm !
UNITED STATES OF AlfRICAVC before the ' I SEOJRITIES AND EXCHANGE-a uw c.;CDMMISSICE) :08
)
PUBLIC UFILITY MotDING COMPANY ACT OF 1935 A Or Ec: .u . l Release No. 23563 / Jamary 4,1985 dN[ck&'"CI- l In the Matter of 7 NFN ORLEANS PWILIC SERVICE INC. : 317 Baronne Street ~-- New Orleans, Insisiana 70112 : i MIDDLE SOUm UrILITIES, INC. : ' 225 Baronne Street New Orleans, Inlisiana 70112 : 1 (70-7069) __ NOTICE OF Pa0506AL 10 ISSJE AND SEf4 PREFERRED SIOCR AND FIRST M)RIGhGE
- BODEIS, AND TO CAPITALIZE SUBSIDIARY New Orleans Public Service Inc., ("NOPSI*), and its parent Middle South l Utilities, Inc. ("MSU"), a registered holding company, have proposed a transaction to this Canission pursuant to Sectiona 6(a),7, 9(a),10 and 12(f) of the Public Utility Holding Ompany Act of 1935 ("Act"), and Rules 43 and 50(a)(3) thereunder.
NOPSI proposes to issue and sell up to 540,000,000 principal amount of its First Mortgage Bonds ("New Bonds") pursuant to Rule 50 r--+im, as set forth in NCAR No. 22623, dated September 2,1982. The New Bonds will be' issued in one or more series from time to tima not later than December 31, 1985. Se price, exclusive of accrued interest, to be paid to NDPSI for each series of the New Bonds will be within a range specified by it to prospective purchasers of not more than five percentage points, but shall not exceed five percentage points above or below 100% of the principal amount of such series of New Bonds. We New Bonds are to be issued under NDPSI's Mortgage and Deed of Trust, dated as of July 1,1944, as supplemented and to be further supplemented. Each series of the New Bonds will mature within five to thirty years. None of the New Bonds of a particular series wil,1 be redeemed for a period of either four or five years, depending upon the term of that series, at a regular redenption price if such redemption is for the purpose or in anticipation of refunding such bond through the use, direct-ly or indirectly, of funds borrwed by NOPSI at an effective interest cost to it of less than the effective interest oost to it of such series of New Bonds, n
. i
. i s
secondly, NDPSI proposes to establish one or more new series of its serial preferred stock having a par value of $100 per snare, which shall consist in the aggregate of not more than 200,000 shares ("New Preferred Stock"), and to issue and sell, in one or teore series fran time to time rnt later than December 31, 1985, the New Preferred Stock, subject to Rule 50. D/ appropriate corporate action, NorsI intends, with the consent of its parent N90, to amend its Garter, to authorize each series of the i New Preferred Stodt, which, except as to designation, dividend rate, rodeiption prices and the terms and amount of sinking fund requirements, if any, will have the same characteristics as, and rank ri pagg with, the presently outstanding 60,000 shares of 4.36% Prete tock, 60,000 shares Stock. of 5.56% Preferred Stock and 150,000 shares of 15.44% Preferred The price to be paid to NOPSI for each series of the New Preferred Stodt will be not less dividends, than $100 nor more than $102.75 per share, plus accrued if any. The taans of each series of the New Preferred Stadt will include a prohibition for five years against refunding any shares of such series, directly or indirectly, with funds derived from the issuance of debt securities at a lower effective interest cost or frty.a the issuance of other stock, which ranks prior to or on a parity with such series as to dividends or assets, at a lower effactive dividend cost. NOFSI may include provisions for a sinking fund for any series of the New Preferred Stock designed to redeem annually, ccamencing a specified period of time after initial issuance, at $100 per share plus accumulated dividends, a number of shares equal to a specified percentage of the total number of shares of such series, with N0 PSI possibly having a noncunulative option to redeem annually an additional neber of shares up to a specified percentage of the total ntsnber of shares of such series, i i NDPSI also pwgmes to issue and sell to MSU, and MSU proposes to acquire fran NOPSI fran time to time thrcugh December 31,1985 up to 4,000,000 shares of its caenon stock (par value, $10) at par for an aggregate cash consideration of up (" Additional Caenon Stock") to $40,000,000 marter presently provides for 7,000,000 authorised shares of cannon N0 PSI's stock of which 5,935,900 MSU. shares, are issued and outstanding and owned by Accordingly, !OPSI proposes, by appropriate corporate action and with the consent of MKJ, further to amend its Charter to increase its authorized ccamon stock fran 7,000,000 to 10,000,000 shares. N0 psi willinuse finance, theits part, proceeds to pay, in part, short-term borrowings; to 1985 construction program,' which provides for expenditures of approximately $39,300,000; ( obligations to M50 under a Power Purchase AdvancesandPayment to pay, Agreement. in part, NOPSI's The proposal and any amendments thereto are available for public inspec-tion through the Canmission's Office of Public Reference. Interested persons in writingwishing by Januaryto ocanent or request a hearing should submit their views 29, 1985, Conmission, Nashington, D.C. to the Secretary, Securities and etchange 20549, and serve a copy on the applicants
1 l
, at the addresses specified above. Proof of service (by af fidattit or, in l case of an attorney at law, by certificate) should be filed witn the request. Arrj request for a hearing shall identify specifically the {s issues of tact or let that are disputed. A person who so requests will be notified of any hearing, it ordered, and will receive a copy of any l notice or order issued in this matter. Atter said date, the proposal,
( as filed or as it may be amended, may be authorized. { Por tne Connission, by the Office of Public Utility Regulation, pursuant to delegated authority. O W %> ', s. L t C John Whealer Secretary r 1 i e e p
. 5'
-* App. Exhibit 5
. ~
. i. 6. o r e.u s l
VTRNER, LilPFERT BERNHARD{."MCPHERSCM XhfD HAND I U 5'.; C cosaavgaso } g suite sooo s; 8
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- wAsNeueven. n. c. anois3 fA.i -4 c.'.!
- 03 A9Cl4ARD J. Wo4VILLO cae6a aseases, vgsue ,
, ,e.---- . .teasa su.se ogeumwed onesev e:AL asuanese s - '"~
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j mesms.ione . .. _ . :, - { 1 29, 1985 i ! l l Secnzities sui Behange Mamie =1 l 450 Fifth Stzest, N.W. kuun 1004 - Fila Desk leashington, D.C. 20$49 Rat In the Mutter of New i.laans Putiic Service, Inc., et al., Film 12. 70-7069 __ Gmtlemen Ehc1ceed for filing please first au criginal and eight (8) copies of *+4- of appearanos ana the cements of new orleans with
- referezco to the aN preameding.
Kindly step and return cane copy to our repressutative. Sincerely,
/W h m-e =mc1.
ADVd1h aes ahn ar=*=r% aug. b
-.--.-.,,..-_,,___,_.v.--.--..m..,-,-,- . - . . . - . . . , - . - - - - , , - - . . _ , - _m. . . , , -
. . _ . . . . . . . _ . . - )
. 1 b
i I l UNITED STATES OF AMERICA BEFORE THE ( SECURITIES AND EXCRANGE COMMISSION IN THE MATTER OF - a New Orleans Public service, Inc. : 1 317 Baronne Street : New Orleans, Louisiana File No. 70-7069 and i s Middle South Utilities, Inc. : 225 Baronne Street : New Orleans, Louisiana a
.....----......--- .......---....--g NOTICE OF APPEARANCE Notice is hereby given by the City of New Orleans, through its undersigned counsel, of its appearance as a party to this proceeding pursuant to section 19 of the Public Utility Holding Company Act and Rulo 9(a) of the Commission's Rules of Practica.
The City 'of New Orleans is a municipal corporation and political subdivision of the State of Louisiana whose approval, contrary to the assertions made by applicanta, is required prior I to the issuance of securities by New Orleans Public Service,
> #' Inc. The City of New Orleans has filed comments with the Commission relating to the proposed transactions and intends to participate in any further proceedings herein. Accordingly, the f City of New Orleans requests that it be given notice of and the i right to appear at all future hearings and conferences and i
1 s
,,rer.r_. ,- r,---,--,--,.~.r--ear--.va.r-, ----r-----,w-m---=
I r otherwise to participete in these proceedings as a party. Communications concerning this proceeding should be addressed to Richard J. Marvillo, Esq. at the address provided below.
. Respectfully submitted, ;
Richard J. Morvillo, Esq. Clinton A. Vince, Esq Glen L. Ortman, Esq. Verner, Liipfert, Ber*.ha rd , McPherson and R:7.6, Chartered 1660 L Street, N.W., suite 1000 washington, D.C. 20036 (202) 775-1000 Counsel to City of New Orleans Dated: January 29, 1985 e
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( 0 I UNITED STATES OF AMERICA ' BEFORE THE SECURITIES AND EXCHANGE COMMISSION '
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___________________________________, j s t IN THE MATTER OF , a { t New Orleans Public service, Inc. 317 Baronne street , ! New Orleans, Louisiana a File No. 70-7069 i and - hiddle South Utilities, Inc. 225 Baronne street : New Orleans, Louisiana 3 i \ NOTICE OF APPEARANCE Pursuant to Rule 2(d) of the Commission's Rules of Practice, the following counsel enter their appearances on behalf of the City of New Orleans in the above-referenced proceeding. Clinton A. Vince Glen L. Ortman Richard J. Morvillo Verner, Liipfert, Bernhard, McPherson and Hand, Chartered 1660 L Street, N.W., suite 1000 Whshington, D.C. 20036 (202) 775-1000 s Respectfully submitted, Richard J. Morvillo Verner, L11ptert, Bernhard, McPherson and Hand, Chartered 1660 L Street, N.W., suite 1000 Washington, D.C. 20036 Counsel to City of New Orleans Dated: January 29, 1985
e 1 UNIT 80 STATES OF AMERICA BEFORE THE SECURITIES AND EXCEANGE COMNISSION :
\
i 4 IN THE MATTER OF , e l New Orleans Public Service, Inc. : 317 Baronne street : New Orleans, Louisiana File No. 70 7069 and : - i Middle South Utilities, Inc. : - 225 maronne Street : New Orleans, Louisiana : I COMMENTS OF THE' CITY OF NEW ORLEANS The City of New Orleans ("New Orleans") respectfully submits the following comments with respect to the Application-Declaration filed by New Orleans Public Service, Inc. ("NOPSI") [ and Middle South Utilities, Inc. ("NsU") in this proceeding. l l l 1_ntroduction On December 21, 1984, NOPSI and MSU filed the instant i Application-Declaration seeking an order of the Commission , i > permitting consummation of the following transactions: (1) the sale by NOPSI of up to $40,000,000 in principal amount of its First Mortgage Bonds;
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(2) the issuance and sale of one or more new series of { its serial preferred stock, $100 par value per share, consistinq ! of no more than 200,000 shares; and (3) the issuance and sale to MSU of not more than 4,000,000 shares of NOPSI's common stock, par value 810 per share, at a price of S10 per share. New Orleans submits that the proposed transactions raise a fundamental legal issue that must be resolved before the Commission may lawfully declare the Application-Declaration effective. Moreover, disclosure deficiencies concerning this and other aspects of the proposed transactions should impel the Commission to seek more complete information from NOPSI and MSU t in the course of this proceeding. state Law considerations new Orleans is a municipal corporation and political subdivision of the State of Louisiana operating under a Rome Rule Charter, ef fective May 1,1954 (and formerly operating under a home rule charter embodied in Act 159 of the Louisiana Legislature of 1912). The Council of the City of New Orleans t (the " Council") is the governing authority of New Orleans. NoPSI is a franchisee of New Orleans under a franchise for the use of public streets and other public places for the conduct I 4
5 of its business as a public gas and electric utility. 3/ NOPSI's franchise is governed by, inter alia, various ordinances of New orleans, including Ordinance No. 4822 Commission Council series, as amended, 3/ (sometimes collectively referred to as the
- settlement ordinance") . In addition, the franchise is governed }
by Sections 4405 and 4405 of Title 33 of the Revised Statutes of Louisiana (1950), as amended. 3b' ' for many years, NOPsI has been providing gas service throughout New Orleans as well as electric service to all parts of the city, except the Fif teenth ward. New Orleans itself is a
, rate-payer and consumer of NOPSI'm services.
i Until recently, NOPSI did not dispute that New Orleans, through its Council, has had jurisdiction to regulate various l NOPSI activities pursuant to the City's Home Rula Charter and the Settlement ordinance. Nor did NOPSI deny that New Orleans' i jurisdiction encompassed the sale of securities such as those at l I/ The franchise was granted pursuant to sections 2-101 and ; l 4-1602 of the Home Rule Charter and pursuant to La. Rev. l Stat. Ann. 55 33:4405 and 33:4506.
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jb/ A copy of Ordinance No. 6822 is attached to Exhibit F-1(a) to the Application-Declaration and at page 3 of EMbibit A to the ' Petition attached hereto as Attachment 1. 2/ It should be noted that, in accordance with the settlement Ordinance, the Revised Statutes of Louisiana and the NOPSI franchise, New Orleans has a perpetual option to buy the property and assets of either or both of the electric or gas departments of NOPSI for a sum certain to be adjusted for alterations to NOPSI's " Rate Base" as defined and determined by the settlement ordinance. See section 1 of ordinance No. 6522. I
I
! issue here. As NOPSI recognizes, Section 9(g) of the Settlement j l
l ordinance specifically provides l No securities of INOPSI), other ' hen c evidences of debt having maturities of twelve months or less and securitiet issued as stock dividende neither of which has any effect on the rate l base, shall be issued without the previously obtained approval of the Council. 1 Nevertheless, NOPSI would now eschew compliance with the
- process contemplated by the foregoing provision, contending that it is no longer operative. In fact, NOPSI and M50 state in their -
Application-Declaration that no state regulatory body or agency has jurisdiction over the proposed transactions. NOPSI and MSU < of fer no judicial or other authoritative precedent in support of ; their contentions. Instead, they rely exclusively on an opinion j of their counsel to the ef fect that (1) New Orleans surrendered its authority to the Louisiana Public Service Commission ("LSPC') by virtue of the passage of ordinance No. 8264, Mayor Council i l Series (M.C.S.), and (2) the proposed transactions are exempt 1 f rom regulation by the LSPC under Louisiana law. See Exhibits F-1 and F-1(a) to the Application-Declaration. New Orleans has a different view. New orleans asserts that, l Ordinance No. 5264 notwithstanding, its sphere of influence over ! the affairs of MOPSI continues and that, as a consequence, NOPSI cannot effect the proposed securities transactions without I .
e securing the Council's prior approval. Indeed, ordinance No. 8264, by its terms, contemplates that: All rates, regulations, controls, and other , pending matters on December 31, 1981 shall continue with the same force and effect thereafter subject to any further action by the Louisiana Public Service Commission. The LPsc has not taken any action to repeal, rescind, or modify any part of the settlement ordinance. Thus', its provisions, 1 including, most significantly, those of Section 9, continue to be effective. 3/ ! Maving only recently learned that NOPsI and MSU dispute its continuing jurisdiction E/r on January 28, 1985, New Orleans ' commenced a civil action against NOPSI in the Civil District Court for the Parish of Orleans, State of Louisiana (No. 85-05162) seeking declaratory and injunctive relief to preclude i l
$/ Beyond that, New Orleans simply did not surrender authority over matters, such as the issuance and sale of securities, closely related to NOPSI's franchise and the perpetual option mentioned in footnote 3, sucra. If consummated, the proposed transactions will have the effect of altering the " Rate Base" and thereby impai.'ing the value of the New Orlean's perpetual option. For this additional reason, the Council's prior approval is required by the settlement ordinance and by law.
Ik# According to information currently available to New Orleans, this is the first time in seventeen yers that NOPSI has sought to issue additional segurities. Thus, the issue discussed herein has not surfaced previously. k
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! _g. l i 1 NOPSI and others from consummating the proposed transactiona l without the Council's prior approval. 3/
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i Resolution of that dispute is critical to these ! proceedings. If, as New Orleans expects to establish, NOPSI's { right to sell securities continues to be subject to the prior ! 1 1 j approval of the Council, New Orleans would f all within the definition of " state coussission" set forth in Section 2(a)(26) of t the Public Utility Holding Company Act of 1935 (the "Act"). , NOPSI's failure to secure such approval, then, would be in ! contravention of applicable State law. Accordingly, the i Consission could not, consistent with the directive of Section 1(g) of the Act, declare the Application-Declaration effective i until NOPSI complies with this facet of state governance. New Orlesna is confident that its position will prevail. l Until that controversy is resolved, the Commission cannot conclude that all applicable state law has been cortplied with and, consequently, may not lawfully permit the proposed transactions to go forward. i Adjudicating the scope of New Orleans' authority will l require familiarization with the evolution of the regulatory relationship between New orleans and NOPSI and interpretation of I I f M A copy of the petition filed in that action is attached l hereto as Attachment 1. l -
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. j' Louisiana law. As the Commission assuredly recognizes, these are 1 4
. matters beyond its special competence and expertise end are more ir
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appropriately and conveniently considered by the Louisiana tribunal. Thue, the commission need not -- and should not -- assumetheaddedburdenofudtanglinganissuelocalto Louisiana. i At the same time, the Commission should not f acilitate NOPSI'm and MSU's attempt'to complete an end run around the k Council's scrutiny. Clearly, the Commission is not now in a position to determine, as required by Section 7(g) of the Act, ; i that there has been compliance with State law. In view of the litigation pending in Louisiana, the Commission should defer ; 4. C action on the Application-Declaration until this State law issue has been finally resolved in an appropriate forum. - s Disclosure Issues The Act shares in common with its companion securities acts i the fundamental purpose of ensuring full disclosure. SEC v. CaDital Gains Research Bureau 1 _Inc., 375 U.S. 180, 190 (1963). While in exercising its jurisdiction under the Act the Commission he's declined, in appropriate circumstances, to analyze truly collateral issues, we believe that where, as here, significant
, disclosure issues are raised that have a reasonable nexus to the ,
l 4 Commission's jurisdiction, the Commission must explore them e o f i i
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l t ! further. ,331 fity of Lafayette, Louisiana v. SEC, 454 F.2d 941, i 955 (1971), af f' d. sub nom. Gulf states Utilities Co. v. FPC, t i 411 U.S. 747 (1973). 'f i j obviously, a substantial disclosure question is presented by 4 the assertion by NOPSI and MSU that no state regulatory authority l
-- including New Orleans -- has jurisdiction over the proposed j transactions. That question has implications beyand the instant
! proceeding, for it appears that other MSU affiliates have i j fostered a stsiler misimpression concerning New Orleans' i j jurisdiction in investor-oriented documents. For example, a registration statement recently filed by Middle south Energy, i j Inc. in connection with a proposed bond offering makes disclosures similar to those contained in the Application-l ] Declaration. See, Exhibit C-3, p.18, to Amendment No. 6 to . Application-Declaration (filed on December 7,1984), Commission k File No. 70-1021. t Additionally, we believe that the Application-Declaration inadequately discloses the uses NOPSI expects to make of the j proceeds it will receive. Without quantifying or otherwise j providing reasonable details concerning these matters, the j Application-Declaration simply states that NOPSI will apply the 1 proceeds to pay short-term borrowings, to finance part of a i j $39,300,000 construction program, to satisfy obligations under a i j Power Purchase Advance Payment Agreement and "to other corporate purposes." In discharging its obligations under sectin 7(c)(2) lI i l
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- 0-of the Act, the Commission should obtain more meaningful and detailed disclosure.
While we would encourage the Commission to require NOPSI and neu to supplement the Application-Declaration in this regard, that act will not resolve the critical legal question discussed above. For this reason, the Commission should defer further action on this matter pending resolution of that issue by the Louisiana court. Respectfully submitted, Richard J. Morvillo Clinton A. Vince Glen L. Ortman verner, Liipfert, Bernhard, McPherson and Rand, Chartered 1660 L Street, N.W., suite 1000 Washington, D.C. 20036 (202) 775-1000 Counsel to City of New Orleans Dated: January 29, 1985 I __,.n,,,,._-,_n,,n,,,,,,,,.-n,-,__., ,_ .,,,,,_ _ n ..-.---.,---,.--.---,,---nw .,-n,
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l I i CERTIFICATE OF SERVICE [ I hereby certify that I have this ,__, day of January,1985 ! served by first class mail, postage prepaid, copies of the. lI l foregoing Motices of Appearance and the Comments of the City of l New Orleans upon: i-i. James M. Cain l-New Orleans Public service, Inc. 317 Baronne Street New Orleans, LA 70112 Edwin Lupberger ! Senior Vice President < Middle south Utilities, Inc. 225 Baronne Street New Orleans, LA 70112 Melvin I. Schwartsman, Esq. Monroe a Lemann 1424 Whitney Buildin0 New Orleans, LA 70130 Thomas J. Igoe, Jr. , Esq. > Reid a Priest 40 West 57th Street New York, NY 10019 i Stephen R. Waite, Esq. Winthrop, 5timson, Putnac & Roberts 40 Wall street New York, NY 10005
~ Richard J. Morvillo
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9 App. Exhibit 6 q _ . . .
"E II -4 ljl :03 UNITED STATES OF AMERICAM "' ' - '
S BEFORE THE SECURITIES AND EXCHANGE COMMISSION _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ -x In the Matter of : RESPONSE -OP- APPLICANTS-MIDDLE SOUTH UTILITIES, INC. DECLARANTS, MIDDLE SOUTH NEW ORLEANS PUBLIC SERVICE INC. : UTILITIES, INC . a nd NEW ORLEANS PUBLIC SERVICE File No. 70-7069 : INC. TO NOTICE OF APPEARANCE
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INTRODUCTION Applicants-Declarants, Middle South Utilities, i Inc. ("MSU") and New Orleans Puolic Serv ice Inc. ("NOPSI"), seek authorization from the Securities and Ex-change Commission (" Commission") purs uant to the Public Utility holding company Act of 1935 ("Act") for NOPSI to issue and sell, and MSU to acquire, not more than 4,000,000 shares of NOPSI's Common Stock (" Common Stock") for an aggregate cash consideration of not more than
$40,000,000. NOPSI also seeks authorization to issue and sell, in one or more series, not more than 200,000 shares o f its Pref erred Stock ( " Pref erred Stock") , having a par value of $100 per share (or an aggregate par value of $20,000,000), and, in one or more series, not more than $40,000,000 in principal amount of its First Mortgage Bo nd s ( "Bo nd s" ) .
Public notice of these proposals was issued on January 4, 1985. New Orleans Public Serv ice Inc., et al. , SEC Holding Co. Act Relea se No. 23 563 (January 4,1985) . The Applicants-Declarants are seeking to have their Ap-plication-Declaration, as amended, made ef f ective pursuant to Sections 6, 7, 9, 10 and 12 of the Act and pursuant to Commission Rule 50 thereunder. In response to the joint Application-Declara-tion, as amended, a Notice of Appearance was filed by the City of New Orleans (" City") in which it requested that the Commission def er action in this matter until resolu-tion of an alleged legal question by a Louisiana court. The alleged legal question results fram the ini-tiation by the City on January 28, 1985 of a suit in the Civil District Court for the Parish of Orleans against NOPSI, MSU and certain of their of ficers, seeking both preliminary and permanent inj unctions against the issuance of the Common Stock, the Preferred Stock and the Bonds on the asserted basis that the Council of the City of New Orleans' ( "Co uncil") ha s j ur i sd ic t io n to appr ov e the i ssu-ance thereof.1/ 1/ The state court action was removed to the United States Distria: Court for the Eastern District of Louisiana on February 5, 1985.
I i 1 DISCUSSION A. Section 7(g) of the Act. Apparently, the City's comments relate to al-leg ed concerns that state laws have not been complied with, and , consequently, the Commission cannot make, due to the constraints of Section 7(g) of the Act, the Appli-cation-Declaration, as amend ed , in this File effective. This argument is fatally flawed for a number of reasons: First, the Council is not a " state commission" or a " state securities commission" within the meaning of
- Sectio ns 2(a) (26 ) and 2 (a)(27) of the Act.
l The electorate of the City voted, on November 28, 1981, to transfer all of the regulatory powers of the Council with respect to electric and gas utilities operat-ing within the City to the Louisiana Public Service Com-mission ("LPSC") ef fective January 1, 1982. In addition, on June 30, 1983, NOPSI disposed of its entire interest in its transit business to a regional transit authority. In i view of these developments, the Council has no f urther regulatory powers over NOPSI, as discussed f urther below. The Applicants-Declarants stand on their state-ments in Item 4 of the joint Application-Declaration in this File that no state regulatory body or agency has j urisdiction over the transactions proposed in this pro-ce ed ing . This statement is based upon an opinion of coun-
sel, together with a memorand tm, which clearly demonstrate that the Council has no j urisdiction over the proposed tr an sac t io ns . Copies of the opinion and memorand um are attached to this response as Exhibits A and B. The memo-rand um of NOPSI's counsel addresses all of the City's comments on its asserted jurisdiction and concludes, af ter extensive legal analysis of the laws of the State of Louisiana, that regulatory j urisdiction over NOPSI has been transferred to the LPSC. As noted in the memorand um, regulation of NOPSI's security issues is left to the Com-mission, by exemption, under the Louisiana statutes. Nothing f urther needs to be added to the discussion of the j ur isd ic tional issue.2/ The Council is clearly neither a " state commis-sion" ( that position being occupied by the LPSC) nor is it a " sta te securities commission" since the Council does not have j urisdiction to regulate , approve or control the is-sue or sale of a security by NOPSI. 2/ MSU and NOPSI would point out that if the City is so anxious to preserve its alleged jurisdiction over security transactions, it should at least be mind ful of those security issues which it prev iously approv ed . The City in its comments, Note 5, states that "this is the first time in seventeen ye[a] rs that NOPSI has sought to issue additional secu-r it ie s" . Since 1978 alone, with the approval of the Council and the Commission, NOPSI has issued
$30,000,000 of secur ities , including S15,000,000 of pr ef erred stock and $15,000,000 of first mortgage bo nd s . See Ordinance Nos. 6873 M.C.S. and 7498 M.C.S. of the City of New Orleans and HCAR Nos. 20728 and 21472.
Section 7 (g) of the Act requires, by its very terms, that a " state commission" or " state securities com-mission", having jurisdiction over the transactions, such as the ones proposed in this proceeding , is the only en-tity entitled to raise the issue as to whether applicable state laws have been complied with. The City may not raise the issue since the Council is neither a " state com-m is sion" nor a " state securities commission" nor does it have, for the reasons noted above, j urisdiction over the transactions proposed in this proceeding. Seco nd , a ss um ing a rg ue ndo tha t there is a valid dispute as to the proper interpretation of applicable state law, on numerous occasions the Cornission has stated that, in making its required determinations as to whether or not to approve proposed transactions under the ap-plicable Federal requirements of the Act, incl ud ing 'a determination of whether the Commission is satisfied as to compliance with state laws pursuant to Section 7(g) of the Act, the Commission is not required to resolve disputed issues of state law and has proceeded to issue orders while matters of state law were in dispute. See Middle South Utilities, Inc . , e t a l . , S EC Hold ing Co . Ac t Re l ea se No. 23579 (January 23, 1985); Middle South Energy, Inc., SEC Holding Co . Ac t Release No. 23526 (December 12, 1984); Middle South Utilities, Inc . , et al . , SEC Holding Co . Ac t O
Release No. 23495 (November 23, 1984); Central and South West Corporation , et al., SEC Holding Co. Act Release No. 22635 (September 16, 1982); and Massachusetts Utilities i Associa tes , 2 SEC 98 (1937). Indeed , the Commission has in the past issued an order authorizing a proposed trans-action relating to the acquisition of securities on the basis of opinions of counsel that state laws have been complied with, even in the face of equity proceedings pending in state court. Massachusetts Utilities Associ-ates, supra. In the Massachuse tts Utilities Associates case the Commission rea soned that it would be inap-propriate to withhold approval of the proposed securities acquisition transaction pending the outcame of the related state court equity proceeding , for the withholding of such approval would amount , in effect, to the granting of an inj unction in accordance with the prayer presented in the state proceeding . Massachuse tts Utilities Associa tes , supra at 109. NOPSI and Middle South believe that the reason-l ing in Massachusetts Utilities Associates, supra, is no less applicable in the instant proceed ing. In the event the Commission were to delay action in this proceeding pending final resolution of the state law issues in the courts, financing needed by NOPSI to carry on its business could be significantly delayed to the grave detriment of
k NOPS I . See Middle South Utilities, Inc. , et al. , SEC Hold ing Co. Act Release No. 23579 (January 23, 1985). NOPSI needs the funds to be derived from the securities which are the subject of this proceeding to finance its on-going business and to meet its current obligations. Any f urther delay in receipt of the Connission's order would j eopardize the liquidity and financial position of NOPSI. Moreover , owing to these on-going financing ne ed s , the Act was written, and has been consistently con-strued , to limit the scope of the Commission's inquiry in-to security issuance transactions under Sections 6(a) and 7 of the Act, as in the subj ect proceeding , to the sa tis-factory teans and conditions of the securities to be is-sued and not to the use of proceeds or collateral issues. See The Southern Company, SEC Holding Co. Act Release No. 21766 (October 29, 1980 ) , af f' d, without opin io n , s ub nom . Herring v. SEC, 672 F.2d 894 (D.C. Cir. 1981); Georg ia Power Company, SEC Holding Co. Act Release No. 21737 (October 1, 1980 ) , a f f' d , sub nom. Herring v . SEC , 673 F.2d 1191 (11th Cir. 1982); City of Lafayette, Louisiana
- v. SEC, 454 F.2d 941 (D.C. Cir . 1971 ) . The policy to re-strict inquiry in security issuance transactions under the Act and avoid delay is equally applicable in the instant proceed ing .
B. Other Collateral Issues.
- 1. Di sclosur e .
The City's comment, on page 8, with respect to the Registration Statement of Middle South Energy, Inc. ("MSE") filed und er the Securities Ac t of 193 3 ( "Sec ur i-ties Act") is neither correct, nor appropriate, in this proceed ing . The City insinuates that investors are lef t with a mishapression from the statement in MSE's Reg is-tration Statement, namely that NOPSI believes that the City no longer has regulatory j urisdiction over NOPSI. As is clear from the opinion and the memorandum of NOPSI's co unsel in this proceeding , as well as the consent of NOPSI's counsel as expert filed as an exhibit to MSE's Reg istrat ion S ta tenent , NOPSI has a sound basis for its belief, as expressed in MSE's Reg istration Sta tement , that the Council no longer has j urisdiction. Raising insinua-tions under the Securities Act, moreover , is inappropriate in this proceeding. The Act is not a disclosure act like the Securities Act. Under the principles and decisions of the courts and the Commission discussed above, issues 9 collateral to a proceeding under the Act may be summarily dealt with and ig nored . See, e.g., Middle South Utili-ties, Inc., e t al . , S EC Holding Co . Ac t Re lea se No . 23 579 l (January 23, 1985). l I l l l
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- 2. Use of Proceed s.
The City indicates that NOPSI may have inade-quately disclosed the proposed use of proceeds from the sales of the Common Stock, Bond s and Preferred Stock. As noted above , it is not within the scope of the inquiry of the Commission under the Act to explore the use of pro-ce ed s . That is not the mandate under Sections 6 and 7. See, e.g., Middle South Utilities, Inc., et al., SEC Hold-ing Co. Act Release No. 23579 (January 23, 1985). The format which NOPSI used to describe the proposed use of proceeds is followed in the vast majority of applications. or declarations filed under Section 6 or 7 of the Act and has not been fo und inadequa te since 193 5. It should not be found inadequa te now. CONCLUSION The City has no standing to raise issues under Section 7(g) of the Act since it is neither a " state com-mission" nor a " state securities commission" . Mor eov er , the City has failed to raise any issues which need to be addressed by the Commission. The record clearly supports, and the financing requirements of NOPSI neces sitate , the pranpt . issuance of an order of the Commission pennitting the Application-Declaration , as amended , to be granted and permitted to
1. 1 t become effective pursuant to Sec t io n s 6, 7, 9, 10 and 12 of the Act and pursuant to Commission Rule 50 thereunder. 4 i A f a.- I i a t l l 1 A
Respectfully submitted , MIDDLE SOUTH UTILITISS, INC. and NEW ORLEANS PUBLIC SERVICE INC. By /e / Thomas J. Icoe, Jr. Thomas J. Igoe, Jr. Their Attorney Charles A. Read William T. Baker, Jr. James K. Mitchell Reid & Priest 40 West 57th Street New York, New York 10019 Attorneys for Applicants-Declarants William D. Meriwether, Jr. Mark W. Ho f fman Middle South Serv ices, Inc. 225 Baronne Street New Orleans, Louisiana 70112 Attorneys for MSU Arthur J. Waechter, Jr. Charles W. Lane, III Jones, Walker, Waechter, Poitevent, Carrere & Deneg re 225 Baronne Street New Orleans , Louisiana 70112 Attorneys for MSU Andrew P. Carter Melv in I . Schwartzman Monroe & Lemann ( A Professional Corporation) 1424 Whitney Building New Orleans, Louisiana 70130 Attorneys for NOPSI February 5, 1985
e App. Exhibit 7 UNITED STATES OF AMERICA' before the , 20Mf7s SD3JRITIES AND EXCHANGE COMMISSION *C . PUBLIC (TfILITY ICIDING COMPANY ACF OF 1935 *d5 'm ,*, , Release No. 23612 / February 21, 1985 eu 03 xqz 'm,..
^
In the Matter of : ~ ' .,\.9 ,, b . , , ,
- e MIDDLE SCCTIH LTrILITIES, I?C. :
NEW ORLEANS PUBLIC SERVICE INC. New Orleans, Ioutstana : (70-7069) : MDORANIXJM OPINION AND ORDER AU'IHORIZItG THE ISSUADCE AND SALE OF PREFERRED SIOCK, FIRST PORD37GE BONDS, COMPON SIOCK; RESERVATION OF JURISDICTION i Introduction New O,rleans Public Service Inc. ("NOPSI"), and its parent Middle South Utilities, Inc. ("MSU"), a registered holding company, filed an application-declaration with this Commission, pursuant to Sections 6(a), 7, 9(a),10 and 12(f) of the Public Utility Holding Company Act of 1935 ("Act"), and Rules 43 and 50(a)(3) thereunder, on Deccsnber 21, 1984. 1/ NOPSI and MSU - (" Parties") sought authority for the sale by NOPSI of up to S40 million in principal anoont of its first mortgage bonds (" Bonds"); up to $20 million of its serial preferred stock, par value $100 (" Preferred"); and for the issuance and sale to MSU of up to 4 million shares of !OPSI's cxmmon stock, S10 par value, at a price of S10 per share ("Ccanon"). Thereaf ter, on January 28, 1985 the City of New Orleans (" City") filed an action in the Civil District Court for the Parish of Orleans, naming NOPSI, MSU and certain officers as defendants, and seeking preliminary and permanent injunctions against the issuance of the Bonds, Preferred and Connon stock. 2/ On January 29, 1985, the City filed ccriments in this proceeding, requesting that this Ccanission deter action pending final order in the state matter. POPSI and MSU filed a response. Issues
'Ihe only issue presented to the Civil District Court was whether the issuance, sale and purchase of the securities by the parties require prior authorization by the City. In its ccanents in this proceeding, the
_1/ New Orleans Public Service, Inc. , et al. , See HCAR No. 23563, 32 SEC Docket 379, (January 4, 1935). 2/ The City of New Orleans v. New Orleans Public Service Incorporated, et al. , Civ1L District Court tor the Parish ot Oricans, No. 85-01562 TJanuary 28, 1985). The aate court action was removed to the United States District Court for the Eastern District of Iouisiana on Ebbruary 5, 1985.
City claims that this Cmmission is not in a position to determine the jurisiictional issue raised in the state court, so that Section 7(g) of the Act should operate to delay an order herein, pending final order. Re City has also raised collateral issues in this proceeding regarding disclosure by the parties of tne City's jurisdiction in this matter and of the use of proceeds. , Jurisdiction of the State and Incal Authorities ne City is a municipal and political subdivision of the state of touisiana operating under a Hom Rule Charter, etfective May 1,1954. D e Council of the city of New Orleans (" Council") is the governing authority of the City. NOPSI is a tranchisee of the City under a tranchise for the use of public streets and otner public places for the conduct of its business as a public gas and electric utility. 3f The franchise is governed by Title 33 Sections 4405-06 of the Revised Statutes of Iouisiana (1950), as amended. In addition, prior to January 1,1992, NOPSI's utility services were regulated by the City pursuant to Sections 4-1604 and 5 of Qiapter i
' 16 of the City's Hcce Rule Charter, and an enabling Ordinance No. 6822, Ccunission Council Series of the City, as amended, and dated April 21, 1922 (" Settlement Vrdinance"). 4f The Settlenent Ordinance vested complete regulatory authority in the City over POPSI's operations, including ratenuking, recordkeeping and a perpetual option to purchase the utility at a price based on a fixed valuation, and adjusted for additions to, and deductions fra a Rate Base.
Se City relies solely on Section 9(g) of the Settlement Ordinance for its authority to regulate the securities' issuances in controversy. Section 9(g) provides: No sec2rities of [?CISI], other than evidences of debt havirq maturities of twelve months or less and securities issued as stock dividends neither of which has any effect on the rate base, shall be issued without the previously obtained approval of the Council. Ordinance tb. 8264, Mayor Council Series of the City (" Amending Ordinance") was approved by referendum on ?bvmber 28, 1981, purporting to retove regulatory powers of the City, as of January 1,1982, regarding electric and gas utilities operating there, and to transfer suen authority to the Iouisiana Public Service Ccamission ("LPSC"). 5] The referendum was provided for by state statute which permitted: 3/ The franchise was established pursuant to revisions of Sections 2-101 and 4-1602 of the Home Rule Charter of the City of New Orleans, and pursuant to Ia. Rev. Stat. Ann. , SS 33:4405 and 33:4506 (1950). 4f A copy of Ordinance No. 6822 is attached to Exhibit F-1(a) to the application-declaration. 5f Cited in pertinent part in Exhibit F-1(a) to the application-declaration.
l Any _ town, city or parish exercising powers of supervision, regulation, and control over any local public utility, desirits to surrender those powers to the Louisiana Public Service Comission may submit the question of surrendering these powers to the qualified electors of the town, city, or parish. ... " (Diphasis Added) 6/ The ettect of the Amending ordinance, by its terms, was tirst to amend Section 4-1604 of the City's Hcme Rule Charter to exclude references to
" electric light, gas, heat (and] power as being subject to "the exercise of its [ City's] powers of supervision, regulation and control". A proviso was added tnat "beginning January 1,1982 the City's powers of supervision regulation and control shall not extend to nor include gas, heat, power and electric public utilities." A new subsection (4) was added which provided:
Beginning January 1, 1982 the Iouisiana Public Service Commission shall regulate New Orleans Public Service, Inc. and Iouisiana Power and Light Canpany, their respective sucessors (sic] and assigns, within the Parish of Orleans, and the Council of the City
- of New Orleans shall furnish to said Public Service Comission all information, records, documents and such other materials as shall be necessary and proper for the transfer of regulatory powers fran the said council.
All rates, regulations, controls, and other pendina matters on December 31, 1981 shall continue with the same force and effect thereafter subject to any further actions by the Iouisiana Public Service Carmission. (Duphasis Added). 7/ Section 4-1605 was also changed by the Amending Ordinance, consistently with the foregoing, to reflect that the Depart 2nent of Utilities may inspect only the books and plants of any public utility " subject to regulation by the City." The intent of the Amending Ordinance is expressed in its introductory paragraph, which calls for the specific amendments to the Hane Rule Charter, mentioned above, relative to: ? ' . . . surrender of the Council of the City of New Orleans' power of supervision, regulation and control over gas, heat, power and electric public utilities witnin the City of New Orleans to the Louisiana Public Service Comission. (anphasis added) 8/ l l 6/ La. Ibv. Stat. Ann. S 33:4491 (1950). 7/ The underscored language is what the City relies on in support of its argument that the Amending Ordinance did not repeal its regulatory jurisdiction under the Settlenent Ordinance. _8f Note here that the underscored lanquaqe is33:4491, identical Fn.to6,that usedand above; in the l statute providing for the reietendum, R.S. l the wonb "pwrn of regulation, supervision and control" are tound in the introductoty paraqraph of the Settlawnt Ordinance, Fn. 4, utove.
The City contends that the last sentence of the new subsection (4) of Section 4-1604 of the City's Home Rule Charter operates to reserve to the City jurisdiction over the proposed issuance and sale of securities. All rates, regulations, controls, and other pending matters on Dec eber 31, 1981 shall continue with the same force and effect thereatter subject to any turther actions by the Louisiana Public Service Ccmission. Its rationale is that the LPSC "has not taken any action to repeal, rescind, or modify any part of the Settlment Ordinance." 9/ The Parties assert tnat the Amending Ordinance mechanically and lawfully effected the transfer of the regulatory powers of the City to LPSC, with respect to utilities operating in the City, by repealing the Settleent Ordinance and amending the City's charter pursuant to a state statute, which specifically provided for such a transfer.
; Applicability of Section 7(g) of the Holding Cmpany Act The proposed issuance and sale of securities in this matter is subject to Section 7 of the Act, and subsection (g) thereunder provides that:
If a State courtission or State securities cmmission, having jurisdiction over any of the acts enumerated in subsection (a) of section 6, shall inform the Commission, upon request by the Commission for an opinion or otherwise, that State laws applicable to the act in question have not been complied with, the Commission shall not pemit a declaration regarding the act in question to become effective until and unless the Cmmission is satisfied that such cmpliance has been ettected. Section 7(g) limits the Commission's authority to issue orders approving securities transactions, when it is notified by a cmpetent state or local agency,10/ with concurrent jurisdiction over the subject matter of the filing, that the transaction is not in compliance with state or local 9f Coments of the City of New Orleans, p.5 (January 29, 1985). 10/ Section 2(a)(26) provides: " State consnission" mans any camtission, board, agency, or officer, by whatever name designated, of a State, municipality, or other political subdivision of a State which under the law of such State has jurisdiction to regulate public-utility capanies. Section 2(a)(27) provides: " State securities ccanission" means any cmunission, board, agency, or officer, by whatever name designated, other than a State catuaission as defined in paragraph (26) of this subsection, which under the law ot a State has jurisdiction to regulate, approve, or control the issue or sale of a security by a canpany. I
5-law. Jurisdiction in a stats or local agency to raise a noncompliance issue with this Ccrvnission can only be premised on the existence of authority at that level to regulate those acts enumerated in Section 6(a) of the Act. We nature of this limitation is such that it imposes a duty on the Commission to make a preliminary determination as to the existence of prerequisite Section 6(a) jurisdiction in the intervening agency 1/, and in those instances when jurisdiction is found, not to issue an order until it has " satisfied" itself that empliance has been ef fected. The City simply claims that because the LPSC took no "further action" under subsection (4) of the Ammling Ordinance as to "pending matters", the Settlement Ordinance was not ef fectively repealed, and Section 9(g) thereunder continued to provide the City with jurisdiction over the securities issuance. B e premise of the City's argument is that under a state statute R.S. S 33:4491, an ordinance repealing local charter pro.- visions for utility regulation and transfering that authority to the LPSC by anending that charter, following a referendtn, still required LPSC action or conduct to achieve its intended purp:)se. ne Legislative schee set cut in R.S. S 33:4491 provides no support for this argument. The legislature devised a method for any " town, city or i parish" that currently exercised " powers of supervision, regulation and control" over loca.1 utilities to " surrender" that power to the LPSC, only upon* submitting the question to the electors. The statute is clear on its face that the authority to divest a locality of utility regulatory functions is exclusively with the voters, and is in no way dependent on ratification by the LPSC. ne newly adopted language of subsection (4) of Section 4-1604 of tne City's Home Rule Charter is procedural, and intended to protect the interests of parties to regulatory proceedings, pending the transfer of authority from the City to the LPSC. De failure of the LPSC to act in a particular proceeding cannot be interpreted as the exercise of legislative authority affecting local regulation repeal efforts under R.S. S 33:4491. Se legislature specifically placed that authority in an exclusive class consisting of electors of Louisiana subdivisions exercising regulatory powers over utilities within their boundaries. We next question of whether the Novmber 28, 1981 referendum effectively transferred the City's regulatory authority over ?OPSI to the LPSC depends upon the scope of the authority to transfer granted by the legislature, and the exercise of that authority by the City in this instance. These matters were dealt with by the legislature in Louisiana Revised Statutes SS 33:4491 through 4496. R.S. S 33:4491 allows any " town, city, or parish" presently exercising " powers of supervision, regulation, and control" over a " local public utility" to " surrender" that p3wer to the LPSC pursuant to a referendum. Bis statute provides the only procedure for a local goverment in Ionisiana to relinquish utility regulatory authority. 1/ Public Service Ocmission of New York v. SEC,166 F.2d 784, 707 (2d Cir.), cert. denied, 334 U.S. 838 (1948). e _
Pursuant to these statutes, the City Council adopted the Amending Ordinance,- amending its Home Rule Charter to ". .. surrender. .. rowers of supervision, regulation and control over gas, heat, power, and electric public utilities within the City ot New Orleans. . ." The underscored portion of the language used by Council in amending its charter is identical to that used by the legislature in its enabling acts. R.S. S 33-4491-96. m is identity strongly evidences the intent of Council to comply with those acts. The Settlanent Ordinance of 1922, which merded the Home Rule Charter, to provide for the City's regulatory authority again contained the same language. Be It Ordained, That in the exercise of its oowers of regulation, supervision and control over the street railway, electric and gas properties in the city nw owned by the New Orleans Railway & Light Company, the Ccrnmission Council of the City of New Orleans does hereby find and order as follows: (Enphasis added) mus, all these legislative actions affecting the City's authority to ( regulate utilities within its borders use the same language, i.e. " powers of regulation, supervision and control", ne operative language used in R.S. S 33:4491 (authority to transfer p3wer), the Amending Ordinance (amending charter to actually transfer power), and the Settlement Ordinance (implenenting power) addresses the sane subject matter. D at the term " powers" was used the same way, and was intended to express an (.ntire concept is clear fran a reading of various portions of the enabling legislation. For instance, R.S. S 33:4493 provides for the form of ballot to be used in the election, and the only separation of surrender of powers of control permitted in the ballot is that of separation of surrender of control over certain kinds of public utilities (e.g. gas, electric, water works) so as to surrender control only of the particular kind or kinds of public utilities specified in the ballot, and not certain functions of an individual public utility, h e entirety of this concept is carried through in R.S. S 33:4494 and R.S. S 33:4495 dealing with.divesti-ture and reinvestiture of such control. In providing for the canvassing of returns, declaring the result of the election and vesting control in the LPSC, R.S. S 33:4494 provides that:
. . . upon the filing of certain papers with the TESC, the powers of control theretofore vested in the town, city or parish government over any class of public utility which a majority of the l qualified electors surrendered in the manner hereinabove provided, t shall thereupon vest in the LPSC until such time as the municipal or parish government reinveats itself with such powers of supervision, regulation and control.
R.S. S 33:4495 merely provides for the election process to be used to reverse the election contemplated and addressed by R.S. S 33:4494. Nowhere in this legislation is there any contmplation ot, or any provision for, partial divestiture or partial reinvestiture of the powers of supervision, regulation mi control over a class of public utility. This statutory approach is eminently reasonable and practical. Because the Amending Ordinance did not expressly repeal the Settlanent Ordinance including Section 9(g), the issue renains whether that was achieved by implication. Article 23 of the Iouisiana Civil Code provides in pertinent part that:
'1he repeal is either express or implied: .
It is express, when it is literally declared by a sub-sequent law; It is implied, when the new law contains provisions contrary to, or irreconcilable with those of the fonner law. The Suprene Court of Icuisiana in State v. St. Julian discussed Article 23 and held that repeal by i;nplication was not tavored, but wnere the obvious purpose of the law is to cover the entire subject matter in question, such legislative action supersedes, all related prior legislation. M/ As discussed above, the investment in and divestiture from the City of utility regulatory pwers by the Settlement and Amending Ordinance, respectively, dealt with the same subject matter in its entirety. Consequently, the Settlenent Ordinance, including Section 9(g), was repealed by implication following adoption of the Amending Ordinance by referendum. In W.E. Perry v. City of Monroe, et al. , the Iouisiana Appellate Court for the Second Circuit again expressed displeasure with implied repeals, but f*ound that resort to be acceptable "where the inconsistency is too clear and plain to be reconciled." 13/ 3 Here the purposes of the two ordinances are more than mutually inconsistent, they are opposite so that the Settlenent Ordinance must fail in its entirety. t Conclusion The Ccrnnission is, therefore, satisfied that Ordinance No. 8264, as approved by the voters of New Orleans, operated to amend the City's Home Rule Charter so as to fully divest the City of regulatory authority over NOPSI as of January 1,1982, transfer that authority to the LPSC, and repeal by implication the settlenent Ordinance entirely, including Section 9(g), upon which the City relies for authority to regulate the securities' issuances herein. Because of this lack of authority, the City is not a State Cmunission or State Securities Ccrnmission, as defined in Sections 2(a)(26) and (27) of the Act, respectively, and thus lacks standing to raise compliance issues under Section 7(g) with this Cmrtission. , Due notice of the filing of the proposal, as cenended, has been given in the manner prescribed in Rule 23 prcznulgated under the Act (HCAR No. 23563), and no hearing has been requested of or ordered by the Comission. Upon the basis of the facts in the record, it is hereby found that the applicable standards of the Act and rules thereunder are satistied: l_2/ 2 221 La.1018, 61 So. 2d 464 (1952). M/ 360 So, 2d 1352 (La. App. 2d Circuit (1970).
e 8-IT IS ORDERED, accordingly, that the application-declaration of 10 PSI and MSU proposire the issuance and sale of preferred stoex, first mortgage : bonds, and the oamon stock of !OPSI be granted, and permitted to become : effective forthwith, subject to ble 24, and jurisdiction is reserved : with respect to fees and expenses. By the Cannission. O W W g=t e e John Wheeler Secretary
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N$i-Mis $$NewYork,NewYork 3 RANCH February 1, 1985 Securities and Exchange Commission _, 4 50 Fif th Street , N. W. Washington, D.C. 20549 Re: New Orleans Public Service Inc. File No. 1-1319 Gentlemen: On behalf of New Orleans Public Service Inc. ( th e " Comp a ny" ) , we enclose for filing one executed and two conformed copies of a Current Report on Form 8-K of the Company. Pursuant to the General Inst ructions to Form 8-K , we also encl ~os e five additional copies of this Report. We would appreciate your acknowledging receipt of the enclosed Report by Stamping and returning to us the copy of this letter enclosed for that purpose. Very truly yours, REID & PRIEST, Counsel for New Orleans Public Service Inc. By /s/ William T. naker. 3r. Willi am T. Baker, Jr. Enclo sures
FORM 8-K SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 DATE OF REPORT (Date of earliest event reported) January 23, 1985 NEW ORLEANS PUBLIC SERVICE INC. :. (Exact name of registrant as specified in its charter) , l Louis iana 1-1319 72-0273040 l (IRS Employer (State or other jurisdiction (Commission File Numbe r) Identification Number) of Incorporation) I 317 Baronne Street, New Orleans, Louisiana 70112 ( Address of principal executive' of fices) Registrant's telephone number, including area code : (504) 595-3_100 s e J
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t i Item 5. Other Events. (1) As previously discussed in the Annual Report {t on Form 10-K for the year ended December 31, 1983, effective January 1, 1982, regulatory jurisdiction over l' the electric and gas service of New Orleans Public Service Inc. ("NOPSI") was transferred from the Council of the City of New Orleans (" Council") to the Louisiana Public Service Commission ("LPSC"). On January 29, 1985, the Council adopted an ordinance directing submission to the voters of the City of the question of whether regulatory jurisdiction should be retransferred to the Council. The referendum on this issue is scheduled to be held on May 4, 1985. NOPSI intends to take whatever actions are appropriate to oppose the retransfer of regulatory jurisdiction to the Council. (2) As previously discussed in the Annual Report on Form 10-X, the Council has undertaken studies to consider t!.e take-over of NOPSI by the City of New Orleans (" City"). On January 24, 1985, the Council adopted a resolution proposing to establish a public power authority - for the purposes, among other things, of acquiring and operating electric power utalities within the City. Public hearings on this matter have been scheduled for February 28, 1985. NOPSI believes that any take-over by the City or any public power authority would not be in the best interests of NOPSI, its investors and customers, and will take all actions necessary to oppose such a take-over. (3) On January 28, 1985, the City filed a Petition for Declaratory and Injunctive Relief in the Civil District Court for the Parish of Orleans, State of Louisiana, against NOPSI and Middle South Utilities, Inc. (" Middle South") seeking (1) preliminary and permanent injunctions against NOPSI's proposed issuance and sale of
$40,000,000 aggregate principal amount of its first mortgage bonds and $20,000,000 aggregate par value of its preferred stock, and the proposed issuance and sale by a
NOPSI to Middle South of $40,000,000 aggregate par value of NOPSI's common stock (collectively, the " Securities") and against the issuance of any other securities of NOPSI, and (2) a declaration that issuance by NOPSI of the Securities is unlawful without the approval of the Council. The City based its request for a declaration that issuance of the Securities is unlawful and its request for injunctive relief on certain City ordinances (the " Ordinances"), which provided for regulatory s jurisdiction of the Council over NOPSI's electric, gas and
- transit operations and stated, among other things, that no securities of NOPSI (except short-term debt and stock n
1
. i 1
i
- l
- i i i dividends) shall be issued without the previously obtained I
approval of the Council. NOPSI believes, and Louisiana Counsel for NOPSI has previously expressed its opinion, that the Ordinance provisions with respect to approval of securities issuances were effectively annulled by virtue of (a) the transfer of regulatory jurisdiction over electric and gas utilities in the City from the Council to the LPSC on January 1, 1982, and (b) NOPSI's subsequent ! disposal of its entire interest in the transit business on ! June 30, 1983. (Reference is made to the Annual Report on Form 10-K for further information with respect to transfer of regulatory jurisdiction to the LPSC and NOPSI's i disposal of its transit business.) The City further I alleges, in support of its request for a preliminary , injunction, that it will suffer irreparable harm if the Securities are issued. NOPSI and Middle South intend to i take all necessary and appropriate defensive action. (4) On January 23, 1985, a purported class action suit was filed against NOPSI in the Civil District Court for the Parish of Orleans, State of Louisiana, by several individuals on behalf of NOPSI's ratepayers, claiming damages totalling $100,000,000 for loss of personal and business property, broken pipes and personal discomfort due to a power outage of an alleged eight hours' duration occurring in the City on January 21, 1985. NOPSI intends to deny liability and to defend the suit vigorously. In the opinion of NOPSI, the final disposi-tien of this matter will not have a material adverse effect upon NOPSI's financial condition or results of operations. e N
l t SIGN ATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. NEW O RLE ANS PUBLIC SERVICE INC. ( REGISTRANT) By /s/ Edwin Lupberger Edwin Lupberger Assistant Treasurer and Assistant Se creta ry Date: January 31, 1985 4 4 i l
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- urrr-USMC UNITED STATES CF AMERICA NUCLEAR REGULATORY COMMISSION
.gJ- %,-4 p3;;gg Before the Atomic Safety and Licensing Appeal Board b'rc'h{u,55Cdthd:-
l l A SERvict* , In-the Matter of ) SRANCH
)
LOUISIANA POWER & LIGHT COMPANY ) Docket No. 50-382
)
(Waterford Steam Electric' Station, ) Unit 3) ) CERTIFICATE OF SERVICE This is to certify that copies of the foregoing " Applicant's Answer to Joint Intervenors' Motion For Leave to File Supplemental Memorandum and Response to Supplemental Memorandum" were served, by deposit in the United _ States mail, first class, postage pre-paid, to all thosecon the attached. Service List, except those marked with an asterisk were served by hand delivery this-28th day.of February, 1985. r y r i Betttfe4. Churchil1, P .C. Dated: February 28, 1985 n
UNITED STATES OF AMERICA NUCLEAR REGULATORY COMMISSION Before the Atomic Safety and Licensing Appeal Board In the Matter of )
)
LOUISIANA POWER & LIGHT COMPANY ) Docket No. 50-382 OL
)
(Waterford Steam Electric ) Station, Unit 3) ) SERVICE LIST o Christine N. Kohl Sheldon J. Wolfe Administrative Judge Administrative Judge Chairman, Atomic Safety and Chairman, Atomic Safety and Licensing Appeal Board Licensing Board U.S. Nuclear Regulatory Commission U.S. Nuclear Regulatory Commission Washington, D.C. 20555 Washington, D.C. 20555 0 W. Reed Johnson Harry Foreman Administrative Judge Administrative Judge Atomic Safety and Licensing Atomic Safety and Licensing Appeal Board Board U.S. Nuclear Regulatory Commission Director, Center for Population Washington, D.C. 20555 Studies Box 395, Mayo o Howard A. Wilber University of Minnesota Administrative Judge Minneapolis, MN 55455 Atomic Safety and Licensing Appeal Board Walter H. Jordan U.S. Nuclear Regulatory Commission Administrative Judge Washington, D.C. 20555 Atomic Safety and Licensing Board 0Sherwin E. Turk, Esquire 881 West Outer Drive Office of the Executive Oak Ridge, TN 37830 Legal Director U.S. Nuclear Regulatory Commission Docketing & Service Section (3) Washington, D.C. 20555 Office of the Secretary U.S. Nuclear Regulatory Commission Atomic Safety and Licensing Washington, D.C. 20555 Appeal Board Panel U.S. Nuclear Regulatory Commission Atomic Safety and Licensing Washington, D.C. 20555 Board Panel U.S. Nuclear Regulatory Commission Washington, D.C. 20555 N
9 LP&L Sarvica List-ASLAB Page Two Mr. Gary Groesch 2257 Bayou Road New Orleans, LA 70119 Carole H. Burstein, Esq. 445 Walnut Street New Orleans, LA 70118 Lynne Bernabei, Esq. Government Accountability Project 1555 Connecticut Avenue, N.W. Suite 202 Washington, DC 20009 b}}