HB 1824-1_ Filed 02/15/2007, 15:52
Adopted 2/19/2007


Text Box

Adopted Rejected


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COMMITTEE REPORT

            
                                                        YES:

6

                                                        NO:
5

MR. SPEAKER:

    Your Committee on       Commerce, Energy and Utilities     , to which was referred       House Bill 1824     , has had the same under consideration and begs leave to report the same back to the House with the recommendation that said bill be amended as follows:

    Delete the title and insert the following:
    A BILL FOR AN ACT to amend the Indiana code concerning utilities and transportation.
    Delete everything after the enacting clause and insert the following:

SOURCE: IC 8-1-2-84.1; (07)CR182401.1. -->     SECTION 1. IC 8-1-2-84.1 IS ADDED TO THE INDIANA CODE AS A NEW SECTION TO READ AS FOLLOWS [EFFECTIVE UPON PASSAGE]: Sec. 84.1. (a) This section applies to a transaction involving:
        (1) a merger, consolidation, reorganization, or union involving an energy company;
        (2) a tender offer or contract for the purchase, acquisition, assignment, or transfer of stock of an energy company; or
        (3) a transaction described in subdivision (1) or (2) that:
            (A) is combined with one (1) or more transactions described in subdivision (1) or (2);
            (B) is conducted within three (3) years of a transaction

described in subdivision (1) or (2); and
            (C) causes at least fifty percent (50%) of the shares of an energy company's stock that are:
                (i) outstanding at the time of the transaction; and
                (ii) entitled to vote generally in the election of the energy company's board of directors;
            to be beneficially held, directly or indirectly, immediately after the transaction by persons other than the persons that beneficially held, directly or indirectly, the shares of the energy company's stock immediately before the transaction.
    (b) This section does not apply to a transaction involving an exempt wholesale generator or a direct or an indirect affiliate of an exempt wholesale generator if either the generator or the affiliate:
        (1) is under the jurisdiction of the federal energy regulatory commission; and
        (2) either:
            (A) is not controlled by; or
            (B) is not an affiliate of;
        an energy utility that engages in retail sales in Indiana.
    (c) As used in this section, "energy company" means an energy utility or an energy utility holding company.
    (d) As used in this section, "energy utility" means an energy utility (as defined in IC 8-1-2.5-2) that provides retail energy service (as defined in IC 8-1-2.5-3) to more than forty thousand (40,000) retail gas or electric customers in Indiana.
    (e) As used in this section, "energy utility holding company" means a corporation, company, partnership, or limited liability company that owns an energy utility.
    (f) Except as provided in subsection (g), without the prior approval of the commission, a person may not, except in an intracorporate transaction, consummate a transaction described in subsection (a) that causes at least fifty percent (50%) of the then outstanding shares of an energy company's stock entitled to vote generally in the election of the energy company's directors to be beneficially held, directly or indirectly, immediately after the transaction by persons other than the persons that beneficially held, directly or indirectly, the shares of the energy company's

stock immediately before the transaction.
    (g) If the transaction to be consummated under subsection (f) is a transaction described in subsection (a)(3), approval by the commission is required only for the particular transaction that causes at least fifty percent (50%) of the then outstanding shares of the energy company's stock entitled to be voted generally in the election of the energy company's directors to be beneficially held, directly or indirectly, immediately after the transaction by persons other than the persons that beneficially held, directly or indirectly, the shares of the energy company's stock immediately before the particular transaction.
    (h) An energy company that seeks approval of a transaction subject to this section shall file an application with the commission. In determining whether to approve a transaction subject to this section, the commission shall consider the following:
        (1) The financial, technical, and managerial capacity of the new entity.
        (2) The effect of the merger on the provision and cost of service to customers of the energy utility involved in the transaction.
    (i) After notice and hearing, the commission shall approve a transaction subject to this section if the commission:
        (1) considers the effect of the transaction on the provision and cost of service to customers; and
        (2) finds that the transaction will result in a new entity with the technical, financial, and managerial capacity to provide adequate and reliable retail energy service.
    (j) The commission shall, after notice and public hearing, enter an order either approving or disapproving a transaction subject to this section not later than one hundred thirty-five (135) days after the date on which an energy company files an application with the commission for approval of the proposed transaction. If the commission fails to issue an order within the one hundred thirty-five (135) day period allowed the commission under this subsection, the transaction shall be considered approved by operation of law as of the first day following the one hundred thirty-five (135) day period described in this subsection. If the transaction is approved by the commission or considered approved

under this subsection, the commission may not take action in any state or federal administrative or judicial proceeding to oppose the transaction. Notwithstanding any other law, rule, or order, an order entered under this section is not subject to a petition for rehearing to the commission, and an appeal from the order must be filed in the Indiana supreme court not more than twenty (20) days after the date of the order.
    (k) If commission approval of a transaction involving a:
        (1) merger, consolidation, reorganization, or union involving an energy company; or
        (2) tender offer or contract for the purchase, acquisition, assignment, or transfer of stock of an energy company;

is not required under this section, commission approval of the transaction is not required under any other provision of this title.
    (l) This chapter does not:
        (1) prevent the holding of an energy company's stock that is lawfully acquired before April 1, 2007; or
        (2) prohibit a merger, consolidation, reorganization, or union involving an energy company if the transaction was lawfully completed before April 1, 2007.
    (m) This section does not nullify, restrict, or limit the authority of the commission under sections 83 and 84 of this chapter.

SOURCE: ; (07)CR182401.2. -->     SECTION 2. [EFFECTIVE UPON PASSAGE] (a) As used in this SECTION, "commission" refers to the Indiana utility regulatory commission created by IC 8-1-1-2.
    (b) As used in this SECTION, "electric utility" means a public utility (as defined in IC 8-1-2-1(a)) that:
        (1) provides retail electric service to:
            (A) more than four hundred thousand (400,000); but
            (B) less than five hundred thousand (500,000);
        retail electric customers in Indiana on April 1, 2007; and
        (2) has a service area that includes, among other counties, the counties described in IC 36-7-7.6-1.
    (c) As used in this SECTION, "electric utility holding company" means a corporation, company, partnership, or limited liability company that owns an electric utility.
    (d) As used in this SECTION, "regional public power authority" means a multicounty public power authority established

to:
        (1) acquire the generation, transmission, and distribution assets of an electric utility or an electric utility holding company;
        (2) own and operate the assets described in subdivision (1); and
        (3) act as a nonprofit utility to provide retail electric service to residential, commercial, industrial, and governmental customers within the participating units.
    (e) The commission shall study the feasibility of establishing a regional public power authority. The study required by this subsection must include the following:
        (1) An examination of the need to:
            (A) enact new state statutes or regulations; or
            (B) amend existing state statutes or regulations;
        to permit the establishment of a regional public power authority.
        (2) A valuation of the electric utility's generation, transmission, and distribution assets to be acquired by the regional public power authority.
        (3) A study of:
            (A) existing and potential funding sources or other mechanisms, including the use of eminent domain, available to the regional public power authority to acquire the assets described in subdivision (2); and
            (B) the method for determining each participating unit's respective:
                (i) contribution toward the acquisition of the assets; and
                (ii) ownership interest in the assets acquired.

         (4) A study of similarly sized public power authorities operating in the United States, including information on the assets, expenses, operations, management, and customer bases of the authorities, to the extent the information is available.
        (5) A cost benefit analysis of establishing a regional public power authority.
        (6) A determination of whether the establishment of a regional public power authority is in the public interest.
        (7) An examination of any other issues concerning the

establishment of a regional public power authority that the commission considers relevant or necessary for study.
     (f) As necessary to conduct the study required by subsection (e), the commission may:
        (1) make use of the commission's existing resources and technical staff;
        (2) employ or consult with outside analysts, engineers, experts, or other professionals; and
        (3) consult with other:
            (A) public power authorities operating in the United States; or
            (B) state regulatory commissions that:
                (i) regulate public power authorities; or
                (ii) have conducted similar studies.
    (g) Not later than December 31, 2007, the commission shall provide a report to the following on the commission's findings from the study conducted under subsection (e):
        (1) The regulatory flexibility committee established by IC 8-1-2.6-4. The report provided to the regulatory flexibility committee under this subsection must be separate from the commission's annual report to the regulatory flexibility committee under IC 8-1-2.5-9(b).
        (2) The legislative council. The report provided to the legislative council under this subsection must be in an electronic format under IC 5-14-6.

         (3) The northwestern Indiana regional planning commission established by IC 36-7-7.6-3.
        (4) The county executive of each county in the electric utility's service area on April 1, 2007.
    (h) The report required by subsection (g) must contain the following:
        (1) A summary of the commission's findings with respect to each issue set forth in subsection (e).
        (2) Recommendations to the regulatory flexibility committee on any legislation needed to establish a regional public power authority.
        (3) Any other findings or recommendations that the commission considers relevant or useful to the entities

described in subsection (g).
    (i)
Before the commission submits its report under subsection (g), any entity described in subsection (g) may require the commission to provide one (1) or more status reports on the commission's study under subsection (e). A status report provided to the legislative council under this subsection must be in an electronic format under IC 5-14-6.
     (j) The regulatory flexibility committee:
        (1) shall review the analyses and recommendations of the commission contained in:
            (A) any status reports provided by the commission under subsection (i); and
            (B) the commission's final report provided under subsection (g); and
        (2) may recommend to the general assembly any legislation that is necessary to establish a regional public power authority in Indiana, if the regulatory flexibility committee determines that the establishment of a regional public power authority is in the public interest.

     (k) This SECTION does not empower the commission or any entity described in subsection (g) to require an electric utility to disclose confidential and proprietary business plans and other confidential information without adequate protection of the information. The commission and all entities described in subsection (g) shall exercise all necessary caution to avoid disclosure of confidential information supplied under this SECTION.

SOURCE: ; (07)CR182401.3. -->     SECTION 3. An emergency is declared for this act.
    (Reference is to HB 1824 as introduced.)

and when so amended that said bill do pass.

__________________________________

Representative Crooks


CR182401/DI 75    2007