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HB-6358, As Passed House, September 20, 2006

SUBSTITUTE FOR

HOUSE BILL NO. 6358

A bill to amend 1939 PA 3, entitled

"An act to provide for the regulation and control of public and

certain private utilities and other services affected with a public

interest within this state; to provide for alternative energy

suppliers; to provide for licensing; to include municipally owned

utilities and other providers of energy under certain provisions of

this act; to create a public service commission and to prescribe

and define its powers and duties; to abolish the Michigan public

utilities commission and to confer the powers and duties vested by

law on the public service commission; to provide for the

continuance, transfer, and completion of certain matters and

proceedings; to abolish automatic adjustment clauses; to prohibit

certain rate increases without notice and hearing; to qualify

residential energy conservation programs permitted under state law

for certain federal exemption; to create a fund; to provide for a

restructuring of the manner in which energy is provided in this

state; to encourage the utilization of resource recovery

facilities; to prohibit certain acts and practices of providers of

energy; to allow for the securitization of stranded costs; to

reduce rates; to provide for appeals; to provide appropriations; to

declare the effect and purpose of this act; to prescribe remedies

and penalties; and to repeal acts and parts of acts,"

(MCL 460.1 to 460.10cc) by adding section 6r.

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

Sec. 6r. (1) A person shall comply with this section before

completing either of the following transactions:

(a) The purchase or sale, or other acquisition or disposition,

of 51% or more of the then outstanding shares of a regulated

utility's stock, or of a controlling interest in a regulated

utility, either directly or indirectly.

(b) The purchase or sale, or other acquisition or disposition,

of all or a substantial part of a regulated utility's existing and

operating assets used or useful at the time of the transaction in

providing regulated service in this state. This section does not

apply to the acquisition or transfer of assets acquired or sold in

the normal course of business.

(2) The commission shall promulgate rules for the

administration of this section.

(3) Within a reasonable period after entering into an

agreement for a transaction described in subsection (1), the

parties to the transaction shall file all of the following material

with the commission:

(a) A concise summary of the terms and conditions of the

proposed transaction.

(b) Copies of the material transaction documents if available.

rates and regulated utility services in Michigan.

(d) Pro forma financial statements that are relevant to the

transaction.

(e) Copies of the parties' public filings with other state or

federal regulatory agencies regarding the same transaction

including any regulatory orders issued by the agencies regarding

the transaction.

(4) Not later than 30 days from the date a person makes a

filing under this section, the commission shall notify the person

what, if any, materials required under subsection (3) or requested

under subsection (6) have not been provided. The commission shall

have 30 days from the date that the commission receives all of the

materials required under subsection (3) or requested under

subsection (6) to determine whether any investigations or hearings

are necessary to review the proposed transaction. At the end of the

30-day period, the commission shall issue 1 of the following:

(a) Advisory comments that may include any proposed

recommendations, modifications, or changes to the structure of the

proposed transaction based on the factors listed in subsection (8).

(b) A written statement that review is completed and no

further comment is necessary.

(5) The commission may extend the time required under

subsection (4) for the review and the issuing of its advisory

comments for a period not to exceed 120 days from the date that the

commission receives all of the material required or requested

within 30 days of the initial filing under subsection (3).

(6) The commission shall be entitled, upon written request, to

documents reasonably related to making the advisory comments under

subsection (4).

(7) Nonpublic information and materials submitted by a person

under this section clearly designated by the person as confidential

are exempt from the freedom of information act, 1976 PA 442, MCL

15.231 to 15.246. The commission shall issue protective orders as

necessary to protect information designated by a party as

confidential.

(8) The commission shall consider and may issue advisory

comments, including specific recommendations, modifications, or

changes to the structure of a proposed transaction subject to this

section, regarding 1 or more of the following:

(a) Whether the proposed transaction would have a material

adverse impact on the rates regulated by the commission under MCL

460.6a of the customers in this state affected by the transaction.

(b) Whether the proposed transaction would have a material

adverse impact on the provision of safe, reliable, and adequate

energy service.

subsidization of a nonregulated activity of a person through the

rates paid by the customers of a regulated utility, to the extent

prohibited by a code of conduct established by the commission under

section 10a(4).

(d) Whether the proposed transaction will significantly impair

a regulated utility's ability to raise necessary capital or to

maintain a reasonable capital structure.

(e) Whether the proposed transaction will have a material

adverse impact on competition in this state.

(9) As used in this section:

(a) "Commission" means the Michigan public service commission.

(b) "Person" means an individual, corporation, association,

partnership, or any other legal private or public entity.

utility, an electric cooperative, or a natural gas distribution

utility, with rates subject to the jurisdiction of the commission.

(10) This section does not apply to a transaction subject to a

written agreement entered into before the effective date of the

amendatory act that added this section.