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FORM U-1/A
AMENDMENT NO. 1 TO
FORM U-1 APPLICATION/DECLARATION
UNDER
THE PUBLIC UTILITY HOLDING COMPANY ACT OF 1935
CMS ENERGY CORPORATION
FAIRLANE PLAZA SOUTH
330 TOWN CENTER DRIVE, SUITE 1100
DEARBORN, MICHIGAN 48126
(NAME OF COMPANY FILING THIS STATEMENT AND
ADDRESS OF PRINCIPAL EXECUTIVE OFFICE)
NONE
(NAME OF TOP REGISTERED HOLDING COMPANY)
TOM MCNISH, CORPORATE SECRETARY
MICHIGAN ELECTRIC TRANSMISSION COMPANY
212 WEST MICHIGAN AVENUE
JACKSON, MICHIGAN 49201
PHONE: (517) 788--1030
FAX: (517) 788--1671
(NAMES AND ADDRESS OF AGENT FOR SERVICE)
The Commission is requested to send copies of all notices, orders and
communications in connection with this Application/Declaration to:
WILLIAM M. LANGE
DEBORAH A. MOSS
Attorneys
CMS Energy Corporation
1016 16th Street, N.W.
Suite 100
Washington, DC 20036
Phone: (202) 293--5795
Fax: (202) 293--5367
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ITEM 1. DESCRIPTION OF PROPOSED TRANSACTION
INTRODUCTION
Pursuant to Sections (9) (a) (2) and 10 of the Public Utility Holding
Company Act of 1935 (the "1935 Act" or the "Act"), CMS Energy Corporation, a
Michigan corporation ("CMS Energy" or the "Applicant"), hereby requests that the
Securities and Exchange Commission (the "Commission") issue an order (i)
approving the indirect acquisition by CMS Energy of all of the voting securities
of Michigan Electric Transmission Company, a newly formed Michigan corporation
("Michigan Transco"), as consideration for transfer of certain transmission
assets as described in Item 1.B.l hereof (the "Transmission Assets") owned by
Consumers Energy Company ("CECo"), a wholly-owned subsidiary of CMS Energy, to
Michigan Transco.
CMS Energy proposes that Michigan Transco acquire Transmission Assets
owned by CECo as described in Item l.B.1 hereof.
CECo's creation of Michigan Transco and the proposed transfer of the
Transmission Assets to Michigan Transco is part of CECo's plan to pursue the
option of divesting its interest in electrical transmission facilities. The
formation of the new transmission company is intended to provide the following
benefits to CECo and its customers: (i) greater corporate and organizational
separation of transmission from generation; and (ii) focusing the control,
planning, maintenance and financial responsibilities of CECo's transmission
facilities into a single company having an independent, streamlined and
cost-efficient operation with the objectives of: (a) creating synergies that
result in better service in the region and (b) assuring satisfaction of federal
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requirements for non--discriminatory access for all transmission users.
Ultimately the new transmission company structure will facilitate the possible
sale by CECo of Transmission Assets, making CECo a generation and distribution
company.
CMS Energy is an exempt public-utility holding company under Section
3(a) (1) of the 1935 Act. CMS Energy directly owns all of the issued and
outstanding voting securities of CECo. CMS Energy has claimed an exemption from
all provisions of the 1935 Act (except for Section 9(a) (2) thereof, pursuant to
Rule 2 thereunder. See CMS Energy Form U-3A-2, "Statement by Holding Company
Claiming Exemption Under U-2 from the Provisions of the Public Utility Holding
Company Act of 1935," dated February 29, 2000, attached hereto as Exhibit G-1.
CMS Energy is not a party to the Transfer Transaction.
CECo is a "public--utility company" as defined in the 1935 Act. Upon
completion of the transfer of the Transmission Assets from it to Michigan
Transco, CECo will become a public-utility holding company as defined in the
1935 Act.
Michigan Transco was incorporated as a Michigan corporation on July 12,
2000. It currently does not conduct any business or own any utility assets. Upon
completion of the transfer of the Transmission Assets from CECo to it, Michigan
Transco will become a "public-utility company" as defined in the 1935 Act.
The transactions contemplated hereby (together, the "Transfer
Transaction") will be accomplished as follows: (i) CECo will transfer its 100
percent ownership interest in substantially all of its integrated transmission
facilities with voltage ratings of 120 kilovolts ("kV") and above, as well as
all related tariffs, contracts, books and records
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("Transmission Assets") to Michigan Transco, and (ii) Michigan Transco will
acquire a 100 percent ownership interest in the Transmission Assets and will
assume certain contractual and other rights and obligations of CECo relating to
the provision of open access transmission service. Specifically, on January 10,
2001, the Federal Energy Regulatory Commission ("FERC") issued an order
approving the Transfer Transaction and accepting an open access transmission
tariff ("OATT") for Michigan Transco, effective on the date CECo's transmission
assets are transferred to Michigan Transco. 94 FERC [P.] 61,018 (2001). Section
1.49 of the Michigan Transco OATT provides that "Michigan Transco assumes the
obligation, on the date this Tariff is made effective, to directly provide
transmission service for Service Agreements in effect on said date under the
Open Access Transmission Tariff filed by Consumers Energy Company; all such
Service Agreements are deemed assigned to Michigan Transco." Additionally,
similar new provisions will soon be filed with FERC with respect to the other
OATT under which Consumers provides such service, its Joint OATT with The
Detroit Edison Company ("Detroit Edison") (whose transmission assets are in the
process of being transferred to International Transmission Company). Michigan
Transco will be assuming CECo's rights and responsibilities under those OATTs
and Service Agreements.
A. DESCRIPTION OF PARTIES TO THE TRANSACTION
1. General Description. (a) CECo. CECo was organized under the laws of the
State of Michigan January 22, 1968, and is the successor to a corporation
organized in Maine in 1910 which did business in Michigan from 1915 to 1968. The
principal executive offices of CECo are located in Jackson, Michigan. CECo is a
"public utility company" as defined in the 1935 Act, and is CMS Energy's sole
"public utility company"
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affiliate. CEC0's principal business is the generation, transmission and
distribution of electric energy in the State of Michigan.
CECo currently has seven wholly-owned subsidiaries, all organized under
the laws of the State of Michigan:
(i) CMS Engineering, a corporation incorporated on June 12, 1986,
and engaged in offering design, engineering, project
management and related construction services to natural gas
utilities, natural gas exploration and production companies,
and other energy businesses;
(ii) CMS Midland Holdings Company, a special purpose corporation
incorporated on March 12, 1990, and involved as a Limited
Partner in the First Midland Limited Partnership, a Delaware
limited partnership, a partnership that leases assets to the
Midland Cogeneration Venture Limited Partnership, a Michigan
limited partnership;
(iii) CMS Midland, Inc., a special purpose corporation incorporated
on December 1, 1986, and engaged as a General Partner in the
Midland Cogeneration Venture Limited Partnership, a Michigan
limited partnership;
(iv) Consumers EnergyGuard Services, Inc., a corporation
incorporated on January 27, 1997, and formed for the purpose
of marketing EnergyGuard, a residential bill payment insurance
project to CEC0's residential customers;
(v) ES Services Company, a corporation incorporated on March 22,
1989, and formed for the purpose of offering design,
engineering, project management and related services primarily
to electric utilities and generation facilities;
(vi) MEC Development Corp., a special purpose corporation
incorporated on December 15, 1986, which previously held
assets transferred to and holder of certain bonds issued by
the Midland Cogeneration Venture Limited Partnership, a
Michigan limited partnership; and
(vii) Michigan Gas Storage Company, a corporation incorporated on
June 6, 1946, and a natural gas company within the meaning of
the Natural Gas Act engaged in the interstate transportation
and storage of gas for a number of customers including CECo.
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(b) Michigan Transco. Michigan Transco was incorporated as a
Michigan corporation on July 12, 2000. It currently does not conduct any
business or own any utility assets. Upon consummation of the transactions
contemplated hereby, Michigan Transco will become a "public-utility company" as
defined in the 1935 Act and a wholly-owned subsidiary of CECo.
2. Description of Utility Operations. (a) Consumers Energy Company's
Utility Operations. CECo is a public utility operating company and wholly-owned
subsidiary of CMS Energy engaged in the generation, transmission, and
distribution of electric energy in the State of Michigan. At year-end 2000, CECo
provided retail electric service to approximately 1.69 million customers located
in 61 of 68 counties of Michigan's lower peninsula. CECo's retail operations are
subject to the jurisdiction of the Michigan Public Service Commission ("MPSC").
CECo also transmits electric energy and sells electric energy at wholesale
subject to the jurisdiction of FERC under Part II of the Federal Power Act
("FPA"), 16 U.S.C. ss. ss. 824 et seq.
CECo owns and operates five fossil-fueled steam-electric generating
plants, one nuclear generating plant, seven oil or gas fueled peaking generating
plants, thirteen conventional hydroelectric plants and has a 51% ownership
interest in one pumped storage hydroelectric generating facility, which
generated an aggregate net amount of 24,505,405 million kWh's in 2000.
CECo's electric generating plants are interconnected by a transmission
system operating at from 120 to 345 kilovolts ("kV") totaling approximately
5,700 pole miles. CECo and Detroit Edison are parties to an Electric
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Coordination Agreement providing for emergency assistance, coordination of
operations and planning for bulk power supply, with energy interchanged at nine
interconnections. CECo also interchanges electric energy through
interconnections with The Toledo Edison Company, Indiana & Michigan Electric
Company, Northern Indiana Public Service Company, the City of Holland, the
Municipal Cooperative Coordinated Pool and the Michigan South Central Power
Agency.
CECo has wholesale electric service agreements with Wolverine Power
Supply Cooperative, Inc., the cities of Bay City, Eaton Rapids, St. Louis,
Portland and Hart, the Village of Chelsea, Alpena Power Company and Edison Sault
Electric Company, all of which require the usual facilities to supply such
service.
CECo has an approved open access transmission tariff on file with the
FERC in Docket No. OA96-77-000 ("OATT"). (1) In addition, CECo is a member of
the Michigan Electric Coordination System ("MECS"), a power pool formed with
Detroit Edison. As a tight power pool, Detroit Edison and CECo jointly filed an
open access tariff providing for non-discriminatory transmission service with
the FRRC pursuant to Order No. 888 on December 31, 1996, in Docket No.
0A97--249--000 ("JOATT"). (2)
CECo is a signatory to the East Central Area Reliability ("ECAR")
Coordination Agreement and a member of the proposed Alliance RTO. (3)
(1) On July 14, 1997, CECo filed an open access transmission tariff with the
FERC in compliance with Order No. 888-A in Docket No. 0A97-648-000. The FERC
designated the Docket No. OA97-648-000 filing as superseding the tariff filed in
OA96-77-000. Since the new tariff left unchanged the rate aspects of the
OA96-77-000 filing, it was made subject to the outcome of proceedings in
OA96-77-000. A FERC ALJ has issued an Initial Decision in OA96-77-000, and the
case is awaiting a final FERC order.
(2) Subsequently, on July 14, 1997, CECo and Detroit Edison jointly filed an
open access transmission tariff in compliance with Order No. 888-A, in Docket
No. OA97--690--000. The situation with the Docket No. OA97-690-000 filing is the
same as that described in fn. 1 above. That filing is also subject to the
outcome on rate matters of Docket No. OA96-77-000.
(3) See Alliance Order, 89 FERC P. 61,298, 61,914 (1999). In this order, the
FERC conditionally authorized the application of several transmission owning
public utilities (American Electric Power Service Corporation ("AEP") on behalf
of the public utility operating company subsidiaries of the AEP system
(Appalachian Power Company, Columbus Southern Power Company, Indiana Michigan
Power Company, Kentucky Power Company, Kingsport Power Company, Ohio Power
Company and Wheeling Power Company), Consumers Energy Company, Detroit Edison
Company, FirstEnergy Corp. on behalf of the transmission-owning FirstEnergy
Operating Companies (The Cleveland Electric Illuminating Company, Ohio Edison
Company, Pennsylvania Power Company, and the Toledo Edison Company) and Virginia
Electric Power Company) to transfer ownership and/or functional control of their
jurisdictional transmission facilities to the Alliance regional transmission
organization.
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The FERC authorized CECo to transact wholesale sales of electric energy
and power at market-based rates in Docket No. ER98-4421--000. See Consumers
Energy Company, 85 FERC [P.] 61,121 (1998).
(b) Michigan Transmission Company's Utility Operations.
Michigan Transco is constituted as a Michigan corporation. Michigan Transco
currently does not perform any utility operations or own any utility facilities
used for the generation, transmission, or distribution of electric energy. Upon
consummation of the Transfer Transaction, Michigan Transco thereafter, will be a
"public utility" subject to the jurisdiction of the FERC under Part II of the
FPA. Pursuant to the FPA, the FERC will regulate the rates and charges for
wholesale electric transmission services provided by Michigan Transco.
B. DESCRIPTION OF THE PROPOSED TRANSACTION
1. Description of the Transmission Assets. The Transmission Assets to
be transferred from CECo to Michigan Transco are specifically identified in
Exhibit B-i hereto, the pro forma Operating Agreement By and Between Michigan
Electric Transmission Company and Consumers Energy Company and Exhibit C-i
hereto, the proposed Bill of Sale. Essentially, Michigan Transco will acquire
from CECo transmission facilities currently operating at voltages of 120 kV and
above. The Transmission Assets to be transferred consist of the following:
(i) transmission lines (including towers, poles, and conductors);
(ii) transformers with voltage ratings of 120 kV and above;
(iii) generation tie lines from the transmission grid to the point
of connection to generator step--up transformers;
(iv) associated voltage control devices and power flow control
devices;
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(v) associated transmission substations;
(vi) equipment spares from transmission facilities.
The Transmission Assets to be transferred to Michigan Transco do not include
radial lines with voltage ratings of 138 kV, which are used to directly provide
service to retail end-use customers (see Exhibit D-1 (Attachment 1)).
Classifying these radial lines as part of CECo's distribution system, rather
than its transmission system, was approved by the Michigan Public Service
Commission (Case No. U-11283) and by FERC (Docket No. EL98-21-000).
Additionally, less than 1 mile of 138 kV line that is part of a FERC licensed
hydroelectric project will not be transferred to Michigan Transco. Pursuant to
the FERC license for that project (Project No. P-2452) CECo must retain control
of that section of 138 kV line. Other facilities owned and operated by CECo that
are classified as distribution and used to provide transmission service to a
limited number of customers at delivery points below 120 kV ("Distribution
Facilities") are not subject to the Transfer Transaction. Nevertheless, in order
to ensure continuity of service to customers who take service over the
Distribution Facilities, Michigan Transco will provide open access,
non--discriminatory transmission service pursuant to a Michigan Transco OATT
and/or a JOATT, and will credit to CECo all charges billed to and collected from
customers for such use of the Distribution Facilities.
2. Operation of the Transmission System. Michigan Transco does not
currently own, operate, or control any facilities used for the generation,
transmission, or distribution of electric energy. Upon consummation of the
Transfer Transaction, Michigan Transco will exercise operational control over
the Transmission Assets (the "Transmission System"). Michigan Transco will
operate the Transmission System in accordance with the terms of a Michigan
Transco OATT, and pursuant to an Operating Agreement to be entered into by
Michigan Transco and CECo. (4) As contemplated, Michigan Transco will administer
a Michigan
(4) Michigan Transco's operational responsibilities are discussed in further
detail in the pro forma Operating Agreement hereto in Exhibit B--i. (Continued)
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Transco OATT (including processing and implementing all requests for
transmission service under the tariff), and procure, offer and arrange for
ancillary services in support of such transmission service. In addition to these
responsibilities, Michigan Transco will function as the control area operator,
and will also be responsible for the maintenance of the Transmission System and
the construction of any new transmission facilities within its service
territory.
Michigan Transco will offer all ancillary services as required by the
FERC in Order No. 888. Because Michigan Transco will not own any generating
facilities, it will procure the necessary ancillary services from third--party
suppliers, including CECo. Under the Operating Agreement, CECo is obligated,
upon request, to offer to sell ancillary services to Michigan Transco at
FERC-approved rates. Michigan Transco will, however, be free to purchase
ancillary services from unaffiliated generators located within its control area
or in neighboring jurisdictions on a non-preferential, competitive basis.
Finally, it should be noted that Michigan Transco will not engage in the
purchase and sale of energy other than to obtain and provide the necessary
ancillary services required by its customers.
Upon receipt of the required regulatory approvals (5), Michigan Transco
will commence providing open access transmission service to CECo's existing
transmission
(5) On November 13, 2000, CECo and Michigan Transco made a filing in Docket No.
ERO1--414-000 under FPA Section 205 seeking approval for Michigan Transco to
provide service under its own OATT. The OATT filed for Michigan Transco is
virtually identical in all material aspects to CECo's previously filed and
FERC-approved OATT and includes the same OATT rates charged by CECo. The
Michigan Transco OATT was approved by FERC on January 10, 2001. 94 FERC [P.]
61,018 (2001). In addition, Michigan Transco will soon also make a similar
filing under Section 205 of the FPA to amend the JOATT between International
Transmission Company (formerly Detroit Edison) and CECo. Further, on November
13, 2000, CECo and Detroit Edison filed an application (Docket No. P-2680-061)
under Part I of the FPA to amend the license (Continued)
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customers, as well as all other eligible customers requesting transmission
service from Michigan Transco, under the terms of the Michigan Transco OATT
and/or JOATT. At that time, CECo will become a transmission customer of Michigan
Transco and take Network Integration Transmission Service ("NITS") under the
Michigan Transco OATT or the JOATT. CECo and Michigan Transco propose to
accomplish this by entering a five-year fixed rate Service Agreement for NITS
substantially in the form of the Transmission Service Agreement which is Exhibit
H(2) to Exhibit D-l hereto. The parties would agree that the Transmission
Service Agreement could not be amended by either party during the initial five
year term.
Further, pursuant to the Operating Agreement, Michigan Transco will be
obligated to make the Transmission System available to CECo in order to allow
CECo to provide transmission service to its existing wholesale customers under
agreements predating FERC Order No. 888 ("Grandfathered Agreements").
3. Financial Aspects of the Transfer Transaction. As currently
contemplated, the transfer of the Transmission Assets from CECo to Michigan
Transco will occur pursuant to the terms of the Transfer Agreement (Exhibit
C-18: Proposed Bill of Sale) between CECo and Michigan Transco. The overall
Transfer Transaction would proceed as follows: Michigan Transco, a Michigan
corporation, has been created initially as a wholly-owned subsidiary of CECo.
Pursuant to the Transfer Agreement, CECo will contribute and transfer to
Michigan Transco the Transmission Assets in exchange for the for the Ludington
Pumped Storage Project, Project No. 2680, for which they are licensees. By that
filing CEC0 and Detroit Edison seek to remove certain transmission facilities
and associated land, which are part of the Transfer Transaction, from the
project.
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common stock of Michigan Transco ("Transco Voting Securities") in a transaction
designed to qualify as a tax-free exchange under Section 351 of the Internal
Revenue Code of 1986, as amended. The Transco Voting Securities will constitute
100 percent of the issued and outstanding common stock of Michigan Transco
immediately following issuance. Simultaneously with and upon the exchange
closing, Michigan Transco will assume the existing rights, obligations and
liabilities of CECo associated with the Transmission Assets and the conduct of
CECo's transmission business. As currently contemplated, the exchange will value
the Transmission Assets (and the Transco Voting Securities) at the
Transmission's Assets' actual depreciated value ("Net Book Value") as of the
closing date.
C. REASONS FOR AND ANTICIPATED BENEFITS OF THE TRANSFER TRANSACTION
The Transfer Transaction is part of a proposed corporate restructuring
to comply with Michigan state law, (6) FERC's policy goals regarding electric
transmission and to better serve local and regional customers. The formation of
Michigan Transco and the transfer of the Transmission Assets from CECo to
Michigan Transco is not, however, the ultimate strategic goal. Rather, the
Transfer Transaction is the first step in the process of CECo exploring the
option of divesting ownership, operation, and control of its transmission
business. Regardless of whether CECo chooses to divest its transmission system
or transfer control of it to an RTO, CECo's current plan is to remain primarily
in
6 The Transfer Transaction is consistent with newly enacted provisions of
Michigan State Law. Effective June 5, 2000, 2000 PA 141 added Section lOw(1) to
1939 PA 3 which states as follows:
"Section 10w(1) Each investor-owned electric utility in this state
shall, at the utility's option, either join a FERC approved multistate
regional transmission system organization or other FERC approved
multistate independent transmission organization or divest its interest
in its transmission facilities to an independent transmission owner."
MLL Section 460.l0w(1).
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the businesses of generating electric energy and distributing electric energy to
retail customers.
This corporate restructuring strategy will be implemented in two steps.
The first step involves the corporate unbundling of the Transmission Assets from
CECo (which is the subject of its October 13, 2000 FPA Section 203 Application
with FERC). The second involves CECo's possible complete exit from the
transmission business (via a Divestiture Transaction which will require the
filing of an additional subsequent FPA Section 203 filing with FERC). As
described below, this corporate restructuring strategy has been developed based
on (1) compliance with the FERC's policy goals regarding transmission, (2)
enhancing service to transmission customers, (3) securing flexibility to meet
the requirements of FERC Order No. 2000, and (4) facilitating compliance with
the transmission-related provisions of Michigan's recently-enacted "Customer
Choice and Electric Reliability Act." (2000 PA 141 and 142)
1. Compliance With FERC's Transmission Policy Goals. Over the past five
years, evolution of the FERC's transmission policies has created regulatory and
market environments, which make corporate unbundling (and ultimately divestiture
of the Transmission Assets) an appropriate strategy.
Prior to Order No. 2000, FERC policy under its Order No. 888(7)
required only that public utilities functionally separate their wholesale
merchant and transmission businesses
(7) See Promoting Wholesale Competition Through Open Access Non-Discriminatory
Transmission Services by Public Utilities; Recovery of Stranded Costs by Public
Utilities and Transmitting Utilities, Order No. 888, FERC Stats. & Regs.
(Regulations Preambles) [P.] 31,036 (1996), order on reh'g, Order No. 888--A,
III FERC Stats. & Regs. [P.] 31,048 (1997), order on reh'g, Order No. 888-B, 81
FERC [P.] 61,248 (1997), order on reh'g, Order No. 888--C, 82 FERC [P.] 61,046
(1998); Open Access Same-Time Information System (Formerly Real-Time Information
Networks) and Standards of Conduct, FERC Stats. & Regs. (Regulations Preambles)
[P.] (Continued)
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to mitigate concerns that vertically--integrated utilities have the opportunity
and incentive to favor their own generation interests over competitors. See,
Order No. 888 at 31, 655-56. Although the FERC clearly encouraged public
utilities to consider the benefits of corporate unbundling in Order No. 888, the
FERC merely required that the separation of wholesale generation and
transmission functions be implemented through the imposition of Standards of
Conduct. Id. Specifically, the FERC stated that:
while we are not now requiring any form of corporate
unbundling, we again encourage utilities to explore whether
corporate unbundling or other restructuring mechanisms may be
appropriate to particular circumstances. Thus, we intend to
accommodate other mechanisms that public utilities may submit,
including voluntary corporate restructurings (e.g., ISOs,
separate corporate divisions, divestiture, poolcos), to ensure
that open access transmission occurs on a non--discriminatory
basis. We will also continue to monitor -and stand ready to
work with parties engaging in - innovate restructuring
proposals occurring around the country.
2. Enhancing Service to Transmission Customers. In addition to seeking
opportunities to expand transmission in order to facilitate generation market
competition, one of Michigan Transco's primary responsibilities will be to
continue to safely and reliably meet the transmission needs of CECo. Following
the October 13, 2000 Joint 203 Filing, Michigan Transco will file with the FERC
amendments to CECo's OATT and the JOATT to substitute Michigan Transco for CECo
as the transmission provider under these tariffs. Upon consummation of the
Transfer Transaction, CECo will function primarily as a generation and
distribution company taking transmission service as a customer under
31,305 (1996); order on reh'g, Order No. 889--A, III FERC Stats. & Regs. [P.]
31,049 (1997); reh'g denied, (Continued)
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Michigan Transco's FERC-jurisdictional open access transmission tariffs and will
no longer be a transmission service provider. CECo and its current open access
transmission customers will see no difference in the level or quality of service
that they currently receive. The Transfer Transaction has been structured to
enable CECo to continue to meet its service obligations in the same manner that
it does today. In effect, the transaction will be transparent to all of CECo's
customers. CECo will remain the customers' regulated electric utility, will
maintain all of its state statutory service obligations, and will continue to
provide adequate, safe and reliable electric service. Furthermore, the Transfer
Transaction will not result in any change in the rates for transmission service
paid by CEC0's existing bundled retail customers, and its FERC--regulated
transmission and wholesale customers. These customers will be unharmed by the
Transfer Transaction because Michigan Transco will charge the same rates as are
currently in effect under CECO's OATT and the JOATT.
3. RTO Creation. The Transfer Transaction has been deliberately
designed to be flexible and compatible with transmission market developments in
the Midwest region, as well as in other regions of the Eastern Interconnection.
As noted elsewhere herein, CECo is currently a signatory to the Alliance RTO, an
organization which was formed well before the issuance of Order No. 2000.
CECo is still currently exploring the best option for Order No. 2000
compliance, including forming Michigan Transco as a fully constituted RTO that
satisfies the minimum characteristics and functions of an RTO. See, e.g.
Commonwealth Edison Company, et al., 90 FERC [P.] 61,192 (2000) ("ComEd").
Order No. 889--B, 81 FERC [P.] 61,253 (1997).
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Consequently, over the next several months, CECo will be intently
investigating alternative business models and paths for compliance with Order
No. 2000. Whether CECo follows a different path, or continues its membership in
the Alliance RTO (or another broader organization seeking RTO status), CECo
believes that the proposed formation of Michigan Transco will provide
significant benefits to its customers.
D. ADDITIONAL INFORMATION
No associate company or affiliate of CMS Energy, CECo or Michigan
Transco or any affiliate of any such associate company has any direct or
indirect material interest in the proposed transaction except as stated herein.
ITEM 2. FEES, COMMISSIONS AND EXPENSES
The fees, commissions and expenses to be paid or incurred, directly or
indirectly, in connection with the transaction contemplated herein, including
other related matters, are estimated as follows:
Legal fees $ 30,000
Miscellaneous $ 8,000
TOTAL *
$ 38,000
ITEM 3. APPLICABLE STATUTORY PROVISIONS
It is believed that Sections 9 (a) (2) and 10 of the Act are applicable
to the proposed transaction.
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Upon consummation of the transfer of the Transmission Assets from CECo
to Michigan Transco , Michigan Transco will become an "electric utility company"
as defined in Section 2 (a) (3) of the Act as well as a "public--utility
company" as defined in Section 2(a) (5) of the Act. Because CECo will, as a
result of the transaction contemplated herein, be directly acquiring five per
centum or more of the outstanding voting securities of Michigan Transco and is a
public-utility company, such acquisition will be subject to Section 9 (a) (2) of
the Act. Thus, CMS Energy believes that the proposed transaction cannot proceed
without the Commission's approval pursuant to Section 10 of the Act. The
relevant statutory standards to be satisfied are set forth in Sections 10(b),
10(c), and 10(f) of the Act.
A. SECTION 10(b)
Section 10(b) of the 1935 Act provides that, if the requirements of
Section 10(f) are satisfied, the Commission shall approve an acquisition under
Section 9(a) unless the Commission finds that:
(i) such acquisition will tend towards interlocking relations
or the concentration of control of public utility companies, of a kind
or to an extent detrimental to the public interest or the interest of
investors or consumers;
(ii) in case of the acquisition of securities or utility
assets, the consideration, including all fees, commissions, and other
remuneration, to whomsoever paid, to be given, directly or indirectly,
in connection with such acquisition is not reasonable or does not bear
a fair relation to the sums invested in or the earning capacity of the
utility assets to be acquired or the utility assets underlying the
securities to be acquired; or
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(iii) such acquisitions will unduly complicate the capital
structure of the holding company system of the applicant or will be
detrimental to the public interest of consumers or the proper
functioning of such holding company system.
1. Section 10(b) (1). The proposed transaction will not tend towards
interlocking relations or the concentration of control of public utility
companies, of a kind or to an extent detrimental to the public interest or the
interest of investors or consumers.
Notwithstanding the above, as in the case of virtually every
transaction subject to Section 9(a) (2), there may exist among CMS Energy and
its public utility subsidiaries (including CECo and Michigan Transco)
interlocking directors and officers only of such nature and to such extent as
normally exist in public utility holding company systems among affiliated and
associated companies. See CIPSCO, Inc., Holding Co. Act. Release No. 25152, 47
S.E.C. Docket 174, 178 (1990)
Similarly, the proposed transaction will not tend toward any
"concentration of control of public-utility companies" that is detrimental to
the public interest, consumers or investors. The proposed transaction will not
involve the acquisition of any utility assets that are not already owned, either
directly or indirectly, by CECo and "will therefore have no effect on the
concentration of control of public-utility companies." Wisconsin Energy Corp.,
Holding Co. Act Release No. 24267, 37 SEC Docket 296, 300 (1986).
In this Application/Declaration, CMS Energy seeks only to more
definitively separate CEC0's generation and distribution facilities from its
transmission facilities in order to pave the way for complete divestiture of the
transmission facilities to a third party such as an RTO. As proposed herein, the
Transmission Assets that are now
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owned by CECo will be divested to, and acquired by, Michigan Transco, a
corporate subsidiary of CECo. Neither CMS Energy, CECo nor Michigan Transco
proposes to merge with any other entity in the instant Application/Declaration.
Michigan Transco does not currently own any generation, distribution or
transmission facilities, and will not own or control any generation. Upon
completion of the proposed transfer, CECo will no longer own transmission
facilities.
2. Section 10(b) (2)-- Fairness of Consideration and Fees. (a) Fairness
of Consideration. Section 10(b) (2) of the 1935 Act requires the Commission to
determine whether the consideration in connection with a proposed acquisition of
securities is reasonable and whether it bears a fair relation to the investment
in and the earning capacity of the utility assets underlying the securities
being acquired. The consideration in connection with security acquisitions under
the transactions contemplated herein will be as follows: Pursuant to the
Transfer Agreement, CECo will contribute and transfer to Michigan Transco the
Transmission Assets in exchange for the common stock of Michigan Transco
("Transco Voting Securities") in a transaction designed to qualify as a tax-free
exchange under Section 351 of the Internal Revenue Code of 1986, as amended. The
Transco Voting Securities will constitute 100 percent of the issued and
outstanding common stock of Michigan Transco immediately following issuance.
Simultaneously with and upon the exchange closing, Michigan Transco will assume
the existing rights, obligations and liabilities of CECo associated with the
Transmission Assets and the conduct of CECo's transmission business. As
currently contemplated, the exchange will value the Transmission Assets (and the
Transco Voting Securities) at the Transmission Assets' actual depreciated value
("Net Book Value") as of the closing date.
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CMS Energy believes that the consideration to be paid by CECo for the
voting securities of Michigan Transco is reasonable because it is equal to the
actual depreciated value of the Transmission Assets to be transferred. CMS
Energy also believes that such consideration bears a fair relation to the
investment in and the earning capacity of the Transmission Assets because it is
equal to the Net Book Value of those assets. The rates set by FERC in connection
with those facilities (when they were owned by CEC0) permitted CECo to achieve a
fair return on those assets. Since Michigan Transco's rates will also be subject
to FERC approval, it can be expected that those rates (which we proposed to
remain the same as CEC0's current rates) will permit Michigan Transco to achieve
a fair return on them as well. This being the case, CECo, being the sole equity
owner of Michigan Transco, can expect to earn a fair return on its investment.
In any event, the proposed transaction is not in a real sense an acquisition of
securities; it is merely a corporate reorganization.
(b) Reasonableness of Fees. An estimate of the fees and
expenses to be paid in connection with the proposed transaction is set forth in
Item 2 hereof. The estimated amounts to be paid are fees for necessary
professional services, and other expenses incurred or to be incurred in
connection with carrying out the proposed transaction. CECo believes that such
fees and expenses are reasonable and customary for a transaction of this kind,*/
and the standards of Section
10(b) (2) are thus satisfied.
3. Section 10(b) (3) - Capital Structure. Section 10(b) (3) requires
the Commission to determine whether the proposed transaction will unduly
complicate the capital structure of the CMS Energy holding--company system or
will be detrimental to the
*/ See WPS Resources Corporation Order of the Commission, dated December 28,
2000 (Release No. 35-27330; 70-9769) (estimated fees, commission and expenses
not to exceed $50,000).
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public interest, the interests of investors or consumers or the proper
functioning of the CMS Energy holding-company system. The corporate capital
structure of CMS Energy after the consummation of the proposed transaction will
not be unduly complicated. CECo will directly acquire all of the issued and
outstanding voting securities of Michigan Transco. CMS Energy will not be a
direct participant in the Transfer Transaction.
In any event, as set forth more fully in Item 3.B.2 and elsewhere in
this Application/Declaration, the proposed formation of the new transmission
company is expected to result in certain benefits to the public and to consumers
and investors of the CMS Energy holding-company system. CECo's plan to
establish/participate in an RTO, with the creation of Michigan Transco as a
significant step toward that end, will maximize the value of the Transmission
Assets to shareholders.
B. Section 10(c)
Section 10(c) of the 1935 Act provides that:
Notwithstanding the provisions of subsection (b), the Commission shall
not approve:
(i) an acquisition of securities or utility assets, or of any
other interest, which is unlawful under the provisions of Section 8 or
is detrimental to the carrying out of the provisions of Section 11; or
(ii) the acquisition of securities or utility assets of a
public utility or holding company unless the Commission finds that such
acquisition will serve the public interest by tending towards the
economical and the efficient development of an integrated public
utility system
1. Section 10(c) (1). Consistent with the standards set forth in
Section 10(c) (1) of the Act, the proposed acquisition of securities will not be
unlawful under the provisions of Section 8 of the Act (inasmuch as Section 8
applies only to registered holding companies), or detrimental to the carrying
out of the provisions of Section 11 of
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the 1935 Act, which also applies, by its terms, only to registered holding
companies, because CMS Energy believes that following the consummation of the
proposed transaction CECo will become an exempt public-utility holding company
under Section 3(a) (2) of the 1935 Act and CMS Energy will continue to be an
exempt public utility holding company under Section 3(a) (1) of the 1935 Act.
CMS Energy will continue to claim an exemption pursuant to Rule 2 and, following
the Transfer Transaction, CECo will also claim such an exemption. Accordingly,
both CMS Energy and CECo will file Form U-3A-2 annually with the Commission.
Section 8 prohibits a registered holding company or any of its
subsidiaries from acquiring, owning interests in or operating both a gas utility
company and an electric utility company serving substantially the same area if
prohibited by state law. The Transfer Transaction will not affect CECo's current
gas utility service area, which is contained within the State of Michigan.
Section 11(a) of the Act requires the Commission to examine the
corporate structure of registered holding companies to ensure, among others,
that unnecessary complexities are eliminated and voting powers are fairly and
equitably distributed. The Transfer Transaction meet the standards of Section
11(a) of the Act. As discussed above with respect to the requirements of Section
10(b) (3) of the Act, CMS Energy will indirectly acquire, as a result of CECo's
direct acquisition, all of the issued and outstanding voting securities of
Michigan Transco. CECo will continue to be a wholly-owned subsidiary of CMS
Energy.
2. Section 10(c) (2). As the following discussion will demonstrate, the
Transfer Transaction will serve the public interest by tending towards the
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economical and efficient development of an integrated public-utility system, as
required by Section 10(c) (2) of the Act.
(a) Efficiencies and Economies. As described more fully in
Item I above, the Transfer Transaction tends toward the following efficiencies
and economies: (i) greater corporate and organizational separation of
transmission from generation and distribution; and (ii) combining control,
planning, maintenance and financial responsibilities for the transmission
facilities into a separate company having an independent, streamlined and
cost-efficient operation so that synergies will be created that result in better
service in the region and satisfaction of federal requirements for
non--discriminatory access for all transmission users will be assured. CECo's
plan to establish/participate in an RTO, with the creation of Michigan Transco
as a significant step toward that end, will maximize the value of the
Transmission Assets to CMS Energy's shareholders.
(b) Integrated Public Utility System. As applied to electric
utility companies, the term "integrated public utility system" is defined in
Section 2(a) (29) (A) of the Act as:
a system consisting of one or more units of generating plants and/or
transmission lines and/or distributing facilities, whose utility
assets, whether owned by one or more electric utility companies, are
physically interconnected or capable of physical interconnection and
which under normal conditions may be economically operated as a single
interconnected and coordinated system confined in its operation to a
single area or region, in one or more states, not so large as to impair
(considering the state of the art and the area or region affected) the
advantages of localized management, efficient operation, and the
effectiveness of regulation.
The Commission has previously taken notice of developments that have
occurred in the gas and electric industries in recent years, and has interpreted
the Act and analyzed
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proposed transaction in light of these changed and changing circumstances. See,
e.g., New Century Energies, Inc., Holding Co. Act Release No. 26748 (Aug.1,
1997) (approving transactions relating to combination of a Colorado gas and
electric public-utility company and intrastate exempt holding company and a New
Mexico electric public-utility company), citing Hearing on Regulation of Public
Utility Holding Companies Before Subcomm., on Telecommunications and Finance and
Subcomm. on Energy and Power of the House of Representatives Comm., on Commerce,
104th Cong., 1st Sess. (Aug. 4, 1995) (testimony of Arthur Levitt, Chairman,
SEC);. "The Regulation of Public--Utility Holding Companies," report of the
Division of Investment Management (June 1995) ("1995 Report") at 29-31; and
Consolidated Natural Gas Co., Holding Co. Act Release No. 26512 (Apr. 30, 1996).
See also Rust v. Sullivan, 500 U.S. 173, 186--87 (1991) ("an agency is not
required to" establish rules of conduct to last forever, but rather must be
given ample latitude to "adapt [its] rules and policies to the demands of
changing circumstances.") (citations omitted); Shawmut Assn. v. SEC, 146 F.2d
791, 796--97 (1st Cir. 1945) (an agency "is expected to treat experience not as
a jailer but as a teacher").
On the basis of the statutory definition above, the Commission has
established four standards that must be met before the Commission will find that
an integrated public--utility system will result from a proposed acquisition of
securities:
(1) the utility assets of the system are physically
interconnected or capable of physical interconnection;
(2) the utility assets, under normal conditions, may be
economically operated as a single interconnected and coordinated
system;
(3) the system must be confined in its operations to a single
area or region; and
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(4) the system must not be so large as to impair (considering
the state of the art and the area or region affected) the advantages of
localized management, efficient operation, and the effectiveness of
regulation.
Environmental Action, Inc. v. SEC, 895 F.2d 1255, 1263 (9th Cir. 1990), quoting
In re Electric Energy, Inc., 38 S.E.C. 658, 668 (1958).
The proposed transaction satisfies all four of these requirements. It
should be noted that in the 1995 Report, the Division recommended that the
Commission "respond realistically to the changes in the utility industry and
interpret more flexibly each piece of the integration equation." 1995 Report at
71.
CAPABLE OF PHYSICAL INTERCONNECTION. Upon consummation of the proposed
transaction, CECo, along with the new transmission company, Michigan Transco,
will continue to be "physically interconnected or capable of physical
interconnection" within the meaning of Section 2 (a) (29) (A) . The proposed
transaction will maintain a continuous, geographically compact transmission
system across the lower peninsula of the State of Michigan.
CEC0 has interconnections with Detroit Edison, The Toledo Edison
Company, Indiana & Michigan Electric Company, Northern Indiana Public Service
Company, the City of Holland, the Municipal Cooperative Coordinated Pool and the
Michigan South Central Power Agency. After the transfer of the Transmission
Assets to Michigan Transco contemplated by the proposed transaction, the same
physical interconnections will be maintained.
In view of the above, the facts presented clearly support a finding
that the utility assets of the Michigan Transco system will be "physically
interconnected or capable of physical interconnection" within the meaning of
Section 2(a) (29) (A) of the Act.
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SINGLE INTERCONNECTED AND COORDINATED SYSTEM. Section 2(a) (29) (A) of
the Act requires that the utility assets, under normal circumstances, may be
"economically operated as a single interconnected and coordinated system." The
Commission has interpreted this language to refer to the physical operation of
utility assets as a system in which, among other things, the generation and/or
flow of current within the system may be centrally controlled and allocated as
need or economy directs. See UNITIL Corp., Holding Co. Act Release No. 25524
(Apr. 24, 1992). The electric generation, transmission and distribution systems
of CECo are operated in a manner that satisfies the standard of economic and
coordinated operations in Section 2(a) (29) (A) of the Act. Moreover, as more
fully described in Item 1.C.2 above, the Transfer Transaction is expected to
result in greater coordination and more efficient allocation of provision of
transmission services within the region served by the CECo.
SINGLE AREA OR REGION. The "single integrated system" of CECo is
currently confined in its operations to a single area or region, namely the
lower peninsula of the State of Michigan. This will not change as a result of
the consummation of the proposed transaction, including the introduction of
Michigan Transco into the existing system.
LOCALIZED MANAGEMENT, EFFICIENT OPERATION AND EFFECTIVE REGULATION. The
CECo utility system will not be enlarged at all as a result of the proposed
transaction; thus, it will not impair the advantages of localized management,
efficient operations and the effectiveness of regulation. Moreover, the
Commission's past decisions on "localized management" show that the Transfer
Transaction fully preserves the advantages of localized management. In such
cases, the
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Commission has evaluated localized management in terms of: (i) responsiveness to
local needs, see American Electric Power Co., Holding Co. Act Release No. 20633
(July 21, 1978) (advantages of localized management evaluated in terms of
whether an enlarged system could be "responsive to local needs"); General Public
Utilities Corp., 37 S.E.C. 28, 36 (1956) (localized management evaluated in
terms of "local problems and matters involving relations with consumers"); (ii)
whether management and directors were drawn from local utilities, see Centerior
Energy Corp., Holding Co. Act Release No. 24073 (April 29, 1986) (advantages of
localized management would not be compromised by the affiliation of two electric
utilities under a new holding company because the new holding company's
"management [would be] drawn from the present management" of the two utilities);
(iii) the preservation of corporate identities, See Northeast Utilities, Holding
Co. Act Release No. 25221 (December 21, 1990) (utilities "will be maintained as
separate New Hampshire corporations . . . [t]herefore the advantages of
localized management will be preserved"); Columbia Gas System, Inc., Holding Co.
Act Release No. 24599 (March 15, 1988) (benefits of local management maintained
where the utility to be added would be a separate subsidiary); and (iv) the ease
of communications, see American Electric Power Co., Holding Co. Act Release No.
20633 (July 21, 1978) (distance of corporate headquarters from local management
was a "less important factor in determining what is in the public interest"
given the "present-day ease of communications and transportation").
The effectiveness of regulation will not be diminished as a result of
the proposed transaction; CECo will remain subject to regulation by the MPSC.
Moreover, the interstate activities of CECo, should any remain following the
proposed
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transaction, will continue to be regulated by the FERC. Michigan Transco will
also be subject to regulation of the FERC with respect to rates and other
matters.
C. Section 10(f)
Section 10(f) provides that:
The Commission shall not approve any acquisitions as to which an
application is made under this section unless it appears to the
satisfaction of the Commission that such State laws as may apply in
respect of such acquisition have been complied with, except where the
Commission finds that compliance with such State laws would be
detrimental to the carrying out of the provisions of section 11.
The laws of the State of Michigan do not apply to the proposed
transaction.
ITEM 4. REGULATORY APPROVALS
There are no additional regulatory approvals that the applicants have
obtained or expect to obtain in connection with the proposed transaction. No
other federal, state or local regulatory body or agency has jurisdiction over
the transaction proposed herein.
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C.
ITEM 5. PROCEDURE
The Applicant requests that there be no 30-day waiting period between
the issuance of the Commission's order and the date on which it is to become
effective. The Applicant submits that a recommended decision by a hearing or
other responsible officer of the Commission is not needed with respect to the
proposed transaction and that the Division may assist with the preparation of
the Commission's decision and/or order in this matter unless such Division
opposes the matters covered hereby.
ITEM 6. EXHIBITS AND FINANCIAL STATEMENTS
A. EXHIBITS
A--1 Articles of Incorporation of Michigan Transco. (Filed January 30,
2001).
A--2 Amended Articles of Incorporation of CECo. (Filed January 30, 2001).
B-1 Pro Forma Operating Agreement by and Between Michigan Electric
Transmission Company and Consumers Energy Company (Exhibit H(1) of
Exhibit D-1: the Joint FPA Section 203 Application of CECo and Michigan
Transco to FERC) (Filed January 30, 2001).
C-1 Proposed Bill of Sale (Exhibit H(4) of Exhibit D-1: the Joint Section
203 Application of CECo and Michigan Transco to FERC). (Filed January
30, 2001).
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D--1 Joint FPA Section 203 Application of CECo and Michigan Transco to FERC.
(Filed January 30, 2001).
D-2 Order of FERC. (Filed January 30, 2001).
F-1 Preliminary Opinion of Counsel.
F-2 Past Tense Opinion of Counsel. (To be filed with certificate of
notification.)
G-1 CMS Energy Form U-3A-2, "Statement by Holding Company Claiming
Exemption under Rule U-2 from the Provisions of the Public Utility
Holding Company Act of 1935,". (Incorporated by reference to such
filing, filed February 29, 2000, SEC File No. 69-333).
H-1 Form 10-K Annual Report of CMS Energy for the year ended December 31,
1999. (Incorporated by reference to such filing, filed March 30, 2000,
SEC File No. 1--9513).
H-2 Form 10-K Annual Report of CECo for the year ended December 31, 1999.
(Incorporated by reference to such filing, filed March 30, 2000, SEC
File No. 1--5611)
B. FINANCIAL STATEMENTS EXHIBIT
FS-l CMS Energy Consolidated Balance Sheet as of March 31, 2000 (see
Quarterly Report of CMS Energy on Form 10-Q for the quarter ended March
31, 2000). (Incorporated by reference to such filing, filed May 15,
2000, SEC File No. 1--9513)
FS-2 CMS Energy Consolidated Statements of Income for its last three fiscal
years (see Yearly Report of CMS Energy on Form 10-K for the year ended
December 31, 1999) . (Incorporated by reference to such filing, filed
March 30, 2000, SEC File No. 1--9513)
FS-3 CECo Consolidated Balance Sheet as of March 31, 2000 (see Quarterly
Report of CECo on Form 10-Q for the quarter ended March 31, 2000).
(Incorporated by reference to such filing, filed May 15, 2000, SEC File
No. 1--5611)
FS-4 CECo Consolidated Statements of Income for its last three fiscal years
(see Yearly Report of CECo on Form 10-K for the year ended December 31,
1999). (Incorporated by reference to such filing, filed March 30, 2000,
SEC File No. 1--5611)
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FS-5 CMS Energy Consolidated Balance Sheet as of June 30, 2000 (see
Quarterly Report of CMS Energy on Form 10-Q for the quarter ended June
30, 2000). (Incorporated by reference to such filing, filed August 11,
2000, SEC File No. 1--9513)
FS-6 CECo Consolidated Balance Sheet as of June 30, 3000 (see Quarterly
Report of CECo on Form iO-Q for the quarter ended June 30, 2000).
(Incorporated by reference to such filing, filed August 11, 2000, SEC
File No. 1--5611)
ITEM 7. INFORMATION AS TO ENVIRONMENTAL EFFECTS
The Transfer Transaction neither involve a "major federal action" nor
"significantly affect the quality of the human environment" as those terms are
used in Section 102(2) (C) of the National Environmental Policy Act, 42 U.S.C.
Sec. 4321 et seq. Consummation of the Transfer Transaction will not result in
changes in the operations of CMS Energy or CECo that would have any impact on
the environment. To the best of CMS Energy and CECo knowledge, no federal agency
is preparing an environmental impact statement with respect to this matter.
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Pursuant to the requirements of the Public Utility Holding Company Act
of 1935, the undersigned company has duly caused this Application/Declaration to
be signed on its behalf by the undersigned thereunto duly authorized.
SIGNATURE
March 22, 2001
CMS ENERGY CORPORATION
By: /s/ Rodger A. Kershner
Rodger A. Kershner
Senior Vice President and
General Counsel
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Exhibit Index
Exhibit No. Description
A EXHIBITS
A-1 Articles of Incorporation of Michigan Transco (Filed January 30, 2001).
A-2 Amended Articles of Incorporation of CECo. (Filed January 30, 2001).
B-1 Pro Forma Operating Agreement by and Between Michigan Electric
Transmission Company and Consumers Energy Company (Exhibit H(1) of
Exhibit D-1: the Joint FPA Section 203 Application of CECo and Michigan
Transco to FERC). (Filed January 30, 2001).
C-1 Proposed Bill of Sale (Exhibit H(4) of Exhibit D-1.: the Joint Section
203 Application of CECo and Michigan Transco to FERC). (Filed January
30, 2001).
D-1 Joint FPA Section 203 Application of CECo and Michigan Transco to FERC.
(Filed January 30, 2001).
D-2 Order of FERC. (Filed January 30, 2001).
F-1 Preliminary Opinion of Counsel.
F-2 Past Tense Opinion of Counsel. (To be filed with certificate of
notification.)
G-1 CMS Energy Form U-3A-2, "Statement by Holding Company Claiming
Exemption under Rule U-2 from the Provisions of the Public Utility
Holding Company Act of 1935,". (Incorporated by reference to such
filing, filed February 29, 2000, SEC File No. 69--333)
H-1 Form 10-K Annual Report of CMS Energy for the year ended December 31,
1999, dated March 29, 2000. (Incorporated by reference to such filing,
filed March 30, 2000, SEC File No. 1--9513)
H-2 Form 10-K Annual Report of CECo for the year ended December 31, 1999,
dated March 29, 2000. (Incorporated by reference to such filing, filed
March 30, 2000, SEC File No. 1-5611).
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B. FINANCIAL STATEMENTS
FS-1 CMS Energy Consolidated Balance Sheet as of March 31, 2000 (see
Quarterly Report of CMS Energy on Form i0-Q for the quarter ended March
31, 2000). (Incorporated by reference to such filing, filed May 15,
2000, SEC File No. 1--9513)
FS-2 CMS Energy Consolidated Statements of Income for its last three fiscal
years (see Yearly Report of CMS Energy on Form 10-K for the year ended
December 31, 1999). (Incorporated by reference to such filing, filed
March 30, 2000, SEC File No. 1--9513)
FS-3 CECo Consolidated Balance Sheet as of March 31, 2000 (see Quarterly
Report of CECo on Form 10-Q for the quarter ended March 31, 2000).
(Incorporated by reference to such filing, filed May 15, 2000, SEC File
No. 1--5611)
FS-4 CECo Consolidated Statements of Income for its last three fiscal years
(see Yearly Report of CECo on Form 10--K for the year ended December
31, 1999). (Incorporated by reference to such filing, filed March 30,
2000, SEC File No. 1--5611)
FS-5 CMS Energy Consolidated Balance Sheet as of June 30, 2000 (see
Quarterly Report of CMS Energy on Form 10-Q for the quarter ended June
30, 2000). (Incorporated by reference to such filing, filed August 11,
2000, SEC File No. 1--9513).
FS-6 CECo Consolidated Balance Sheet as of June 30, 2000 (Quarterly Report
of CECo on Form 10-Q for the quarter ended June 30, 2000).
(Incorporated by reference to such filing, filed August 11, 2000, SEC
File No. 1--5611)
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