Legalectric

For those who are following the Big Stone II fracas, which is scheduled for deliberations at PUC today, there are probably some who are also curious about what Otter Tail Corporation is doing, why they filed Form 8K at SEC, here’s their filing.  Why did they pick June 3 for the filing date?

Otter Tail Initial Filing with PUC

This was filed electronically in Minnesota PUC docket 08-658 and the service list says it was mailed to the interested parties list.  To get to the website to watch for future filings, go to www.puc.state.mn.us and then “eDockets” on the left, and then “Search Documents” and search for 08-658.

Have they forgotten the first word of the Commission’s name: PUBLIC? They’re barring the door to my being there by phone. Or more correctly, they won’t answer the phone! It’s beyond “don’t call us, we’ll call you.” More like “I’m sorry, but the number you have reached has been disconnected” minus the “sorry” because they’re probably relieved.

I’d asked to sit in on the Big Stone deliberations by phone a couple days ago, given that I’m in Delaware, I can’t just hop in the Diamante and fly to St. Paul. Janet Gonzalez said she wasn’t handling it (she’s the one who has arranged this in the past, though Bob Cupit did it once), and Janet said to call Bob Cupit, and Bob said he was overloaded and to contact Mary Swoboda, who has the technical knowledge to do it. No problem… so I thought. Silly me… I called and sensed some resistance, which is odd, because I’ve done this several times before, for two or three PUC meetings, and as many prehearing conferences… Mary said she’d have to talk to Bob… who had just sent me to Mary… yes, we’re going circular… and Mary said she’d call back. Yet here’s what showed up from Bob:

We’ve discussed this further after your call to Mary. I’m reminded that our accommodation policy is for full parties with extenuating circumstances. And of course, oral arguments were yesterday, which you did not attend as a limited party. Three parties with limited party status, including yourself, were called on by the Chair during the oral arguments and none responded. Further, you haven’t offered any extenuating circumstances. We must decline your request.

SAY WHAT?!?!?!?!? “Accommodation policy” my ass… I think Alan would call this the NON-accommodation policy. Methinks it just might be something else bringing on the bad connection.  My response:

Bob & Burl –

I did present extenuating circumstances as I definitely told Mary and Janet that I was in Delaware, and that if I was in Red Wing it would not be an issue, obviously I’d come up.  I did not ask to listen in on yesterday’s argument as I had no argument to make, and there’s no requirement to argue and as a limited intervenor — I wouldn’t even try to argue that actively participating in final argument is required or necessary.

mncoalgasplant.com’s limited party status in this proceeding is another major problem, but that’s another story for another time…

Your “accommodation policy” isn’t anything that’s been discussed with me in the previous times I’ve done this and I believe that Charlotte Neigh, not a party to any proceeding, has also listened in. The only issue raised previously is that there is limited access and it’s first come first serve.  No one has said that there are too many asking for listening privileges.  Trotting out a “policy” now and refusing access isn’t equitable.  As someone said recently, “I’ve just about had it.”

There’s a few hours left to line up someone to speak for mncoalgasplant.com at the meeting…

Carol

Here, Bob, this one’s for you — as you may recall, you haven’t gotten one of these since your comment at the Excelsior Task Force meeting about the TF and the law regarding cumulative impacts, so here you go, today’s Horse’s Ass Award:

TODAY – CAN YOU BELIEVE IT!!!

While Otter Tail Power is at the PUC arguing for their Big Stone II,(or is it their life?), their messenger was really busy filing at the SEC. The Otter Tail Corporation Board of Directors has authorized reorganization. Is this all about debt/equity ratio? Does this keep some things out of consideration? What’s going on… this is a short short SEC document that says so much!

This is something that the Commission must address as it makes its decision about the Certificate of Need and Routing Permits for Big Stone II, so I whipped off a mncoalgasplant.com Motion:

mncoalgasplant.com Motion for Disclosure & Commission Notice; Exhibit A – Otter Tail Power 8k filing

Here it is verbatim, linked, of course:

Item 7.01 Regulation FD Disclosure

The Board of Directors of Otter Tail Corporation (the “Company”) has authorized the Company to proceed with a holding company reorganization under the provisions of Section 302A.626 of the Minnesota Business Corporation Act. Currently, the Company’s regulated electric utility business is operated under the name of Otter Tail Power Company as a division of the Company. Following the holding company reorganization, Otter Tail Power Company will be operated as a wholly-owned subsidiary of the new parent holding company to be named Otter Tail Corporation.

In connection with the reorganization, each outstanding share of Otter Tail Corporation common stock will be automatically converted into one share of the common stock of the new holding company, and each outstanding share of Otter Tail Corporation cumulative preferred stock will be automatically converted into one share of the cumulative preferred stock of the new holding company having the same terms. Shareholder approval is not required for the reorganization under the provisions of the Minnesota Business Corporation Act.

The holding company reorganization is subject to approval by Minnesota, North Dakota and South Dakota regulatory agencies and by the Federal Energy Regulatory Commission, consents from various third parties and certain other conditions. Subject to such conditions, the holding company reorganization is expected to become effective on January 1, 2009.

Signature

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.

OTTER TAIL CORPORATION

Date: June 3, 2008

By /s/ Kevin G. Moug
Kevin G. Moug
Chief Financial Officer and Treasurer

In case you’re wondering, Minn. Stat. 302A.626 is (click it to read) “Merger to affect a holding company reorganization.”

So who cares about reorganization? Apparently Bill Gates does, it’s mentioned in the Note Purchase Agreement from last year…

Note Purchase Agreement between Cascade and Otter Tail Power

Read carefully and you’ll see that reorganization is one of the reasons the obligations on Otter Tail Power wouldn’t be binding.

A couple of questions are apparent (and this is NOT my specialty by any means, it’s the myopic leading the blind here):

Is the reorganization a prelude to a spin-off divestiture?

Is the reorganization due to contractual debt ratio provisions?

Is the reorganization a prelude to bankruptcy?

Does the reorganization open the door to “carry-over credit or loss of merged subsidiary?”

Others? Any ideas? We’ll see…

It’s good to see a state where the legislature has the sense to learn and think about what it’s voting on!  The Illinois General Assembly has rejected subsidies for coal gasification in a close but sufficient vote.  Given Illinois is a coal state, this is a strong slap to IGCC, which has been getting a free and uninformed ride for too long.

Taylorville coal plant supports continue despite setback

But thankfully they won’t have the legislature pushing along a project that cant stand on its own!

Energy bill fails in House
By ADRIANA COLINDRES
STATE JOURNAL-REGISTER

Posted May 31, 2008 @ 11:13 PM

A legislative proposal meant to encourage the development of Illinois’ “clean-coal” industry, including a Taylorville project, failed to muster enough support Saturday in the state House of Representatives.

The measure included provisions to assist a proposed $2.5 billion coal-gasification plant near Taylorville.

The bill also specified that the state’s goal is to have “cost-effective clean coal facilities” generate one-fourth of Illinois’ electricity by 2025.

But the vote on Senate Bill 1987 was 50-51, with 14 lawmakers voting “present.” It needed 60 votes to advance. The bill’s sponsor, Rep. Gary Hannig, D-Litchfield, used a parliamentary maneuver that could allow him to call the measure for a second vote later.

Many lawmakers had questions about the plan, and some of them said they were seeing it for the first time on Saturday. Several also said they believed the end result would be higher electricity prices.

“Why would we want to go down a path that’s going to increase the rates for the business community and no doubt, down the road, for the consumer?” said Rep. David Leitch, R-Peoria.

Hannig said the bill would simply have directed Tenaska Inc., which is behind the Taylorville project, to study how much it would cost to produce electricity by using Illinois coal in a coal-gasification operation.

Once that study was completed, the matter would have gone back to the General Assembly, which could have decided whether or not to go forward with the Tenaska proposal.

Adriana Colindres can be reached at 782-6292.

Did you see this: “The bill also specified that the state’s goal is to have “cost-effective clean coal facilities” generate one-fourth of Illinois’ electricity by 2025.” That’s absurd.  But they get it, that the result would be higher prices!