UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549


 
FORM N-Q
 
 
QUARTERLY SCHEDULE OF PORTFOLIO HOLDINGS OF REGISTERED MANAGEMENT INVESTMENT COMPANY
 




Investment Company Act file number 811-21725



Tortoise Energy Capital Corporation
(Exact name of registrant as specified in charter)


11550 Ash Street, Suite 300, Leawood, KS 66211
(Address of principal executive offices) (Zip code)



David J. Schulte
11550 Ash Street, Suite 300, Leawood, KS 66211

(Name and address of agent for service)



913-981-1020
Registrant's telephone number, including area code



Date of fiscal year end: November 30


Date of reporting period:   August 31, 2010



 
 
 
 
Item 1. Schedule of Investments.
Tortoise Energy Capital Corporation
           
SCHEDULE OF INVESTMENTS (Unaudited)
           
               
     
August 31, 2010
 
Master Limited Partnerships and Related Companies - 156.3% (1)
 
Shares
   
Fair Value
 
Crude/Refined Products Pipelines - 67.9% (1)
           
United States - 67.9% (1)
           
Blueknight Energy Partners, L.P. (2)
    436,674     $ 3,842,731  
Buckeye Partners, L.P.
    189,200       11,552,552  
Enbridge Energy Partners, L.P.
    1,064,000       57,190,000  
Holly Energy Partners, L.P.
    312,000       15,600,000  
Kinder Morgan Management, LLC (3)
    974,270       57,550,146  
Magellan Midstream Partners, L.P.
    598,700       29,013,002  
NuStar Energy L.P.
    583,557       33,256,913  
Plains All American Pipeline, L.P.
    680,400       40,851,216  
Sunoco Logistics Partners L.P.
    677,300       50,154,065  
                299,010,625  
Natural Gas/Natural Gas Liquids Pipelines - 59.9% (1)
               
United States - 59.9% (1)
               
Boardwalk Pipeline Partners, LP
    746,157       22,802,558  
Duncan Energy Partners L.P.
    283,800       7,872,612  
El Paso Pipeline Partners, L.P.
    875,500       27,411,905  
Energy Transfer Equity, L.P.
    121,000       4,204,750  
Energy Transfer Partners, L.P.
    1,153,600       52,707,984  
Enterprise Products Partners L.P.
    1,291,800       47,757,846  
Niska Gas Storage Partners LLC
    265,600       5,014,528  
ONEOK Partners, L.P.
    380,000       26,144,000  
PAA Natural Gas Storage, L.P.
    150,919       3,602,437  
Spectra Energy Partners, LP
    303,900       9,791,658  
TC PipeLines, LP
    869,100       37,762,395  
Williams Partners L.P.
    184,096       7,752,283  
Williams Pipeline Partners L.P.
    342,800       10,921,608  
                263,746,564  
Natural Gas Gathering/Processing - 22.5% (1)
               
United States - 22.5% (1)
               
Chesapeake Midstream Partners, L.P.
    189,874       4,471,533  
Copano Energy, L.L.C.
    736,700       18,505,904  
DCP Midstream Partners, LP
    404,100       12,834,216  
MarkWest Energy Partners, L.P.
    612,600       20,411,832  
Regency Energy Partners LP
    623,900       14,836,342  
Targa Resources Partners LP
    970,238       24,537,319  
Western Gas Partners LP
    141,430       3,405,634  
                99,002,780  
Propane Distribution - 5.3% (1)
               
United States - 5.3% (1)
               
Inergy, L.P.
    627,000       23,349,480  
                   
Shipping - 0.7% (1)
               
Republic of the Marshall Islands - 0.7% (1)
               
Teekay LNG Partners L.P.
    98,200       3,225,870  
                   
Total Master Limited Partnerships and Related Companies (Cost $424,185,995)
      688,335,319  
                   
Short-Term Investment - 0.0% (1)
               
United States Investment Company - 0.0% (1)
               
Fidelity Institutional Government Portfolio - Class I, 0.06% (4) (Cost $219,453)
    219,453       219,453  
                   
Total Investments - 156.3% (1) (Cost $424,405,448)
            688,554,772  
Other Assets and Liabilities - (21.1%) (1)
            (93,022,954 )
Long-Term Debt Obligations - (20.4%) (1)
            (90,000,000 )
Mandatory Redeemable Preferred Stock at Liquidation Value - (14.8%) (1)
      (65,000,000 )
Total Net Assets Applicable to Common Stockholders - 100.0% (1)
          $ 440,531,818  
                   
(1)
Calculated as a percentage of net assets applicable to common stockholders.
         
(2)
Non-income producing.
               
(3)
Security distributions are paid-in-kind.
               
(4)
Rate indicated is the current yield as of August 31, 2010.
               

 
 
 
 
Various inputs are used in determining the value of the Company’s investments.  These inputs are summarized in the three broad levels listed below:

Level 1 – quoted prices in active markets for identical investments
Level 2 – other significant observable inputs (including quoted prices for similar investments, market corroborated inputs, etc.)
Level 3 – significant unobservable inputs (including the Company’s own assumptions in determining the fair value of investments)
 
The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities.

The following table provides the fair value measurements of applicable Company assets by level within the fair value hierarchy as of August 31, 2010.  These assets are measured on a recurring basis.


   
Fair Value at
                   
Description
 
August 31, 2010
   
Level 1
   
Level 2
   
Level 3
 
Equity Securities:
                       
Master Limited Partnerships and Related Companies (a)
  $ 688,335,319     $ 688,335,319     $ -     $ -  
Total Equity Securities
    688,335,319       688,335,319       -       -  
Other:
                               
Short-Term Investment (b)
    219,453       219,453       -       -  
Total Other
    219,453       219,453       -       -  
Total
  $ 688,554,772     $ 688,554,772     $ -     $ -  

(a)  
All other industry classifications are identified in the Schedule of Investments.
(b)  
Short-term investment is a sweep investment for cash balances in the Company at August 31, 2010.
 
Valuation Techniques
In general, and where applicable, the Company uses readily available market quotations based upon the last updated sales price from the principal market to determine fair value.  This pricing methodology applies to the Company’s Level 1 investments. 
 
There were no transfers between levels for the period from December 1, 2009 through August 31, 2010.

As of August 31, 2010, the aggregate cost of securities for federal income tax purposes was $352,089,368. The aggregate gross unrealized appreciation for all securities in which there was an excess of fair value over tax cost was $341,422,916, the aggregate gross unrealized depreciation for all securities in which there was an excess of tax cost over fair value was $4,957,512 and the net unrealized appreciation was $336,465,404.

 
 
 

Item 2. Controls and Procedures.
 
(a)  
The registrant’s President and Chief Executive Officer and its Chief Financial Officer have concluded that the registrant's disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940 (the “1940 Act”)) are effective as of a date within 90 days of the filing date of this report, based on the evaluation of these controls and procedures required by Rule 30a-3(b) under the 1940 Act and Rule 13a-15(b) or 15d-15(b) under the Securities Exchange Act of 1934, as amended.

(b)  
There was no change in the registrant's internal control over financial reporting (as defined in Rule 30a-3(d) under the 1940 Act) that occurred during the registrant's last fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting.

Item 3. Exhibits.
 
Separate certifications for each principal executive officer and principal financial officer of the registrant as required by Rule 30a-2(a) under the 1940 Act (17 CFR 270.30a-2(a)) are filed herewith.

 
 
 

 
SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.


  Tortoise Energy Capital Corporation  
       
Date:  October 28, 2010
By:
/s/ David J. Schulte  
    David J. Schulte  
    President and Chief Executive Officer  
       



Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

  Tortoise Energy Capital Corporation  
       
Date:  October 28, 2010
By:
/s/ David J. Schulte  
    David J. Schulte   
    President and Chief Executive Officer   
       
  Tortoise Energy Capital Corporation  
       
Date:  October 28, 2010
By:
/s/ Terry Matlack  
    Terry Matlack  
    Chief Financial Officer  
       


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