Subchapter I. REGISTRATION OF SECURITIES
Sec.
3.601. General.
3.602. Abbreviated securities certificate.
Authority The provisions of this Subchapter I issued under the Public Utility Code, 66 Pa.C.S. § § 501, 504—506, 1301 and 1501, unless otherwise noted.
Source The provisions of this Subchapter I adopted January 24, 1997, effective January 25, 1997, 27 Pa.B. 414; amended April 28, 2006, effective April 29, 2006, 36 Pa.B. 2097, unless otherwise noted. Immediately preceding text appears at serial pages (281567) to (281568) and (225629) to (225633).
§ 3.601. General.
(a) Scope. A public utility shall file with the Commission and receive from it notice of registration of a securities certificate before the public utility issues or assumes securities.
(b) Format. A securities certificate must be in a form consistent with § § 1.31 and 1.32 (relating to requirements for documentary filings; and form of documents), accompanied by payment in the amount provided in § 1.43 (relating to schedule of fees payable to the Commission) and in a payment mode provided for in § 1.31.
(c) Form. The securities certificate must provide information required by the Commission on a form available from the Commission or shown on its website as well as additional information required by the Commission. The securities certificate must contain the following information:
(1) The name and address of the public utility filing the securities certificate.
(2) The name and address of the public utility’s attorney.
(3) A brief corporate history of the public utility, a general description of the territory in which it actually furnishes service to the public, and of the kind of service rendered.
(4) Whether the public utility is controlled by a corporation, and, if so:
(i) The name of the controlling corporation.
(ii) The form and manner of control.
(iii) The extent of control.
(iv) Whether control is direct or indirect.
(v) The names of intermediaries through which control, if indirect, is held. When control is in a holding company organization, show the chain of ownership or control to the main parent company.
(5) The following information regarding the securities which the public utility proposes to issue or assume:
(i) The exact title of security.
(ii) The aggregate par value, or if no par value then the number of shares, or the principal amount to be issued or assumed.
(iii) In the case of stock certificates, as applicable:
(A) Par value.
(B) Dividend rate and payment dates.
(C) Redemption value.
(D) Liquidation value.
(E) Voting powers.
(F) Preferences as to assets and dividends.
(G) Cumulative and participating dividend provisions.
(H) Callability and conversion provision.
(iv) In the case of evidences of indebtedness, as applicable:
(A) Nominal date of issue.
(B) Date of maturity.
(C) Interest rate and payment dates.
(D) Extent to which taxes on securities are assumed by the issuer.
(E) Callability and conversion provisions.
(F) Maintenance.
(G) Depreciation and sinking or other fund provision.
(H) Name and address of trustee and whether affiliated with the public utility.
(6) The method by which the public utility proposes to dispose of the securities, giving pertinent details as to date and manner of sale, exchange or other disposition. If sale, include minimum net price to the public utility, maximum commission or fee to be paid to investment bankers, brokers or others, and whether securities are to be sold on an underwriting or take-down basis. State whether or not those negotiating or arranging the sale are in any way affiliated with the utility. If a private sale, state whether the purchasers are in any way affiliated with the utility. Show in tabular form an estimate in reasonable detail of the expenses to be incurred in issuing the securities, including, by groups, legal fees, fees and documentary taxes to governmental authorities, printing expenses, underwriting or brokerage commission, duplicate interest and other expenses.
(7) The purpose for which the public utility proposes to issue or assume the securities.
(i) If the purpose is the acquisition of all or part of the assets of a going concern, state:
(A) The name and address of the vendor and the docket number of Commission approval of the acquisition.
(B) A brief description of property, and whether it is all or part of a completed system.
(C) The full consideration to be paid, including any indebtedness to be assumed by the utility.
(D) The manner of determining consideration.
(E) The manner in which acquisition is to be recorded on the public utility’s books.
(F) The original cost of physical property to be acquired, stated according to plant accounts prescribed by the classification of accounts applicable to the public utility.
(G) The depreciation applicable thereto as recorded on the books of the vendor.
(H) The manner of determining the original cost and depreciation.
(I) An income statement for the latest available 12 months applicable to the operation of the property being acquired.
(ii) If the purpose is the purchase or construction of new facilities, or the betterment of existing facilities, give:
(A) A brief description of the new facilities or betterments.
(B) A list of plant accounts prescribed by the classification of accounts applicable to the utility to be charged with the new facilities or betterments, showing opposite each account the estimated cost to be charged.
(C) A list of the accounts and the amounts to be credited thereto for the retirements of any property resulting from the purchase or construction of new facilities or betterments.
(D) The manner of determining amounts at which retired property is to be credited.
(E) The date when it is expected that the purchase or construction or betterment will be completed.
(iii) If the purpose is to obtain working capital, explain any unusual condition which exists, or will exist, in the public utility’s current assets or current liabilities, stating:
(A) The approximate cost of average materials and supplies inventory which the public utility expects to carry.
(B) The average time elapsing between the date when the public utility furnishes or begins a period of furnishing service to customers and the date when collection is made from customers for the service.
(C) The minimum bank balance requirements.
(D) A statement, by accounts, of the operating expenses for the latest available 12 months.
(iv) If the purpose is to refund obligations, describe obligations in detail.
(A) Explain the purpose for which obligations were issued, or refer to number of securities certificate, securities application or certificate of notification in which the purpose appears.
(B) State the date of last disposition of obligation, the amount disposed of and the price received.
(C) State whether refunding is to meet maturity, or to effect saving in interest or other annual charges; if to effect saving, state date when, and price at which obligations are to be called, and submit statement showing saving to be effected as a result of refunding.
(D) State disposition to be made of any discount or expense remaining unamortized on the obligations to be refunded and of any premium included in the call price.
(E) State whether any unamortized debt discount and expense was originally incurred in connection with securities not now outstanding, and if so, give amount applicable to each issue.
(v) If the purpose is reimbursement for moneys already expended, state the purpose for which the moneys were expended in as complete detail as if the securities now being issued were for that purpose as required by this subsection and by subsections (a), (b) and (d).
(A) List the names and principal amounts of any securities already issued against the expenditures.
(B) State the dates upon or between which the expenditures were made.
(8) State whether a registration statement, application or declaration has been filed or will be filed with the Securities and Exchange Commission in respect to the securities herein proposed to be issued or assumed. If so, state:
(i) The date filed.
(ii) The nature of the application or declaration.
(iii) The closing date before the Securities and Exchange Commission.
(9) The public utility shall attach to each securities certificate:
(i) A balance sheet of the public utility set up by ledger accounts and not by groupings dated within at least 3 months of the date of securities certificate, including any transactions which have occurred between the date of the balance sheet and the date of filing the securities certificate and an explanation of any major contingent liabilities faced by the public utility.
(ii) An income account of the public utility set up by general ledger accounts, not by groupings, showing in detail the other credits and charges made to surplus during the year, for the 12-month period ending by the date of the balance sheet.
(iii) A statement with respect to the plant accounts appearing on the balance sheet showing the following:
(A) A summary by the detailed plant accounts prescribed in the system of accounts applicable to the public utility.
(B) The portion of the plant account balance representing increments in plant book values resulting from the acquisition of property through purchase, merger and consolidation or reorganization.
(C) The portion of the plant account balance representing increases in plant book values resulting from the recording of appraised values by the public utility unless the public utility has filed with the Commission an original cost study.
(iv) A statement of securities of other corporations owned by the public utility, including:
(A) The name of the issuer.
(B) The exact title of the security.
(C) The amount owned.
(D) The date acquired.
(E) The price paid.
(F) The book value.
(G) The market value.
(H) The cost to the affiliate, if acquired from an affiliate.
(V) A statement showing the status of the funded debt of the public utility outstanding at the date of the balance sheet, plus particulars of any important changes in the funded debt outstanding which have taken place since that date. The statement must be in the form available from the Commission.
(vi) A statement showing the status of outstanding capital stock of the public utility as of the date of the balance sheet, including any important changes in the capital stock outstanding which have taken place since the date of the balance sheet according to the form available from the Commission.
(vii) A copy of the registration statement filed by the public utility with the Securities and Exchange Commission under the Securities Act of 1933 (15 U.S.C.A. § § 77a—77aa) with respect to the proposed issuance or assumption of securities.
(viii) Copies of applications and declarations filed by the public utility with the Securities and Exchange Commission with respect to the proposed issuance or assumption of securities, under the Public Utility Holding Company Act of 1935 (15 U.S.C.A. § § 79—79z-6).
(ix) A copy of the resolution of the board of directors of the public utility authorizing the proposed issuance or assumption of securities.
(x) A copy of the stock certificate or other security proposed to be issued or assumed. Bonds or other evidences of indebtedness secured by mortgage, collateral trust agreement or other underlying instrument. This exhibit must be a copy of the underlying instrument, rather than of the evidence of indebtedness itself.
(xi) A statement showing, in journal entry form, the charges and credits to be made on the books of account of the public utility as a result of the proposed issuance or assumption of securities.
(xii) An affidavit in the form prescribed by § § 1.35 and 1.36 (relating to execution; and verification).
(d) Format form. The Commission may provide a standard format form for use by an applicant for this section and will, to the extent practicable, provide the format form on the Commission’s website.
(1) Any standard format form developed for purposes of this section that involves a matter of an interagency nature will be developed or revised only after notice is published in the Pennsylvania Bulletin, posted on the Commission’s website to the extent practicable, and after consultation with an interested agency is conducted.
(2) Any standard format form developed for purposes of this section that involves matters other than those governed by paragraph (1) will be developed or revised only after notice is published in the Pennsylvania Bulletin, posted on the Commission’s website to the extent practicable, and after consultation with an interested agency is conducted.
(3) Any standard format form developed for purposes of this section will be developed by staff and may be subject to formal approval by the Commission. Any standard format form developed for purposes of this section not otherwise subject to formal approval by the Commission will be subject to § § 5.41—5.44 (relating to petitions).
§ 3.602. Abbreviated securities certificate.
(a) Scope of rule. The abbreviated procedure of subsections (b) and (c) applies to an issuance or assumption of a security which meets one of the following requirements:
(1) The issuance or assumption of securities has been authorized by another state commission having primary jurisdiction.
(2) The financing is provided by an agency of a state or the United States government.
(3) The issuance or assumption of securities is by a utility having a presence in this Commonwealth of less than 10% as measured by either:
(i) The ratio of gross investment within this Commonwealth to the utility’s total gross investment.
(ii) The ratio of gross operating revenues from service rendered during the immediately preceding fiscal year under tariffs filed with the Commission for intra-State service to the total gross operating revenues of the public utility during the fiscal year from all service, wherever rendered, of the type described in section 102 of the act (relating to definitions).
(4) The declaration by a utility of a stock split if there is no impact on the control of the utility or negative impact attributable to commingling of competitive enterprises with noncompetitive enterprises.
(5) The issuance of a dividend by a utility in the form of the utility’s stock if there is no impact on the control of the utility or negative impact attributable to commingling of competitive enterprises with noncompetitive enterprises.
(b) Form. At the election of the issuing public utility, a securities certificate relating to an issuance of securities within the scope of this rule may consist of two copies of a letter addressed to the Secretary and setting forth the following information:
(1) The name and address of the public utility.
(2) The title or capacity of the representative of the public utility executing the letter.
(3) The designation of the securities to be issued or assumed and the approximate number of shares, principal amount, or other units proposed to be issued or assumed.
(4) A statement setting forth the specific subsections that qualifies the issuance of the abbreviated procedure together with the underlying calculations, when applicable.
(5) A verification or affidavit conforming to § 1.36 (relating to verifications and affidavits) in compliance with section 1902 of the act (relating to contents of securities certificate).
(c) Filing and registration. An abbreviated securities certificate under this section, together with the filing fee specified in § 1.43 (relating to schedule of fees payable to the Commission), shall be filed with the Secretary.
(1) The certificate will be deemed, in fact and in law, to have been registered if no order of rejection has been entered after 20 days from the filing of a securities certificate.
(2) Prior to the expiration of the 20-day period, the Secretary may extend the 20-day consideration period to not more than a total of 40 days upon notification of the public utility served. Further extension to the period will be by the order of the Commission.
(d) Exemption. The filing of a securities certificate with the Commission under Chapter 19 of the act (relating to securities and obligations), relating to an issuance or assumption of securities is not required of a public utility which owns or operates facilities within this Commonwealth, but which has received no gross operating revenues for service rendered during the immediately preceding fiscal year and 12-month period under tariffs filed with the Commission for intrastate service within this Commonwealth.
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