SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
Current Report Pursuant to Section 13 or 15(d) of
the Securities Act of 1934
Date of Report (Date of earliest event reported): APRIL 17, 2003
NORTHERN BORDER PARTNERS, L.P.
(Exact name of registrant as specified in its charter)
DELAWARE 1-12202 93-1120873
(State or other jurisdiction (Commission (I.R.S. Employer
of incorporation) File Number) Identification No.)
13710 FNB PARKWAY
OMAHA, NEBRASKA 68154-5200
(Address of principal executive offices) (Zip Code)
(402) 492-7300
(Registrant's telephone number, including area code)
ITEM 5. OTHER EVENTS
Two of our general partners, Northern Plains Natural Gas Company and
Pan Border Gas Company, are owned by Enron Corp. In addition, all of the common
stock of Portland General Electric Company ("PGE") is owned by Enron. As the
owner of PGE's common stock, Enron is a holding company for purposes of the
Public Utility Holding Company Act ("PUHCA"). Following Enron's acquisition of
PGE in 1997, Enron annually filed a statement claiming an exemption from all
provisions of PUHCA (except the provision which addresses the acquisition of
public utility company affiliates) under Section 3(a)(1). Due to Enron's
bankruptcy filing in December 2001, Enron is no longer able to provide necessary
financial information needed to file the exemption statement. As a result, in
February 2002, Enron applied to the SEC for an order of exemption under Section
3(a)(1). To be eligible for this exemption, PGE's utility activities must, among
other things, be predominantly intrastate in character.
Following the submission of testimony by the parties to the proceeding,
a hearing on Enron's application was held on December 5, 2002. On February 6,
2003, the administrative law judge ("ALJ") issued an initial decision ("Initial
Decision") holding that PGE does not meet the criteria to be predominantly
intrastate in character, thereby denying Enron's application for exemption. On
February 27, 2003, Enron filed a petition for review with the SEC requesting
that the SEC review the ALJ's Initial Decision, reverse such Initial Decision,
and find that Enron is entitled to an exemption from PUHCA. Filing of the
petition stays the effect of the Initial Decision until such time as the SEC
acts on the petition. As directed by the SEC, the Division of Investment
Management filed a response to the petition on March 25, 2003 urging the SEC to
reject the petition and affirm the ALJ's Initial Decision. The SEC could act on
the petition at any time. Possible actions that the SEC could take include
setting the matter for further hearings before the full Commission or summarily
affirming, reversing or modifying the Initial Decision. If the SEC affirms the
Initial Decision, Enron would be required to register as a holding company under
PUHCA and Northern Plains and Pan Border would presumptively become subsidiaries
within the newly registered Enron holding company system. Further, because of
the voting interest held by Enron through its general partner interests in
Northern Border Partners, we and certain of our subsidiaries, including Northern
Border Pipeline Company, would also presumptively become subsidiaries within
the Enron holding company system.
PUHCA imposes a number of restrictions on the operation of registered
holding companies and their subsidiaries within the registered holding company
system, including the requirement of SEC approval of securities issuances and
certain restrictions on the ability to own or acquire businesses. PUHCA also
regulates transactions between the companies in a holding company system.
Operations under PUHCA can become materially more expensive and cumbersome than
operations by companies that are not subject to, or exempt, from PUHCA. If we
are unable to obtain an exemption from subsidiary status under PUHCA, we would
become subject to regulation by the SEC not only with respect to the acquisition
of the securities of public utilities, but also with respect to, among other
things, the acquisition of assets and interests in any other business,
declaration and payment of certain cash distributions; intra-system borrowings
or indemnifications; sales, services or construction transactions with other
holding company system companies; the issuance of debt or equity securities; and
borrowings under credit facilities. At this time, we cannot predict how
regulations under PUHCA would impact our operations, althouh if we receive the
exemptions or blanket, forward-looking orders referred to below, we believe that
we will be able to conduct our operations in a manner consistent with our
current operations without material cost or delay.
If Enron's exemption application is denied by the SEC, we cannot
estimate the amount of time that the SEC will provide for Enron to register as a
holding company under PUHCA at which time Enron and its holding company system
would become subject to PUHCA. We intend to seek blanket, forward-looking orders
from the SEC that, if granted, would minimize the impacts as described above of
PUHCA on our operations. We also may seek exemptions for our operations from
regulation under PUHCA. Similar blanket, forward-looking orders and exemptions
have been granted by the SEC to operating subsidiaries of a holding company
under PUHCA. No assurance can be given that we will be successful in obtaining
all the blanket orders or exemptions that we intend to seek or that our
operations will not be subject to the full regulatory impact of PUHCA.
SIGNATURES
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.
Northern Border Partners, L.P.
(A Delaware Limited Partnership)
Dated: April 17, 2003 By: /s/ Jerry L. Peters
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Jerry L. Peters
Chief Financial & Accounting Officer