Title 18—Conservation of Power and Water Resources--Volume 1
PART 34—APPLICATION FOR AUTHORIZATION OF THE ISSUANCE OF SECURITIES OR THE ASSUMPTION OF LIABILITIES
§ 34.1   Applicability; definitions; exemptions in case of certain State regulation, certain short-term issuances and certain qualifying facilities.
(a) Applicability. This part applies to applications for authorization from the Commission to issue securities or assume an obligation or liability which are filed by:
(1) Licensees and other entities pursuant to sections 19 and 20 of the Federal Power Act (41 Stat. 1073, 16 U.S.C. 812, 813) and part 20 of the Commission's regulations; and
(2) Public utilities pursuant to section 204 of the Federal Power Act (49 Stat. 850, 16 U.S.C. 824c).
(b) Definitions. For the purpose of this part:
(1) The term utility means a licensee, public utility or other entity seeking authorization under sections 19, 20 or 204 of the Federal Power Act;
(2) The term securities includes any note, stock, treasury stock, bond, or debenture or other evidence of interest in or indebtedness of a utility;
(3) The term issuance or placement of securities means issuance or placement of securities, or assumption of obligation or liability; and
(4) The term State means a State admitted to the Union, the District of Columbia, and any organized Territory of the United States.
(c) Exemptions. (1) If an agency of the State in which the utility is organized and operating approves or authorizes, in writing, the issuance of securities prior to their issuance, the utility is exempt from the provisions of sections 19, 20 and 204 of the Federal Power Act and the regulations under this part, with respect to such securities.
(2) This part does not apply to the issue or renewal of, or assumption of liability on, a note or draft maturing one year or less after the date of such issue, renewal, or assumption of liability, if the aggregate of such note or draft and all other then-outstanding notes and drafts of a maturity of one year or less on which the utility is primarily or secondarily liable, is not more than 5 percent of the par value of the other then-outstanding securities of the utility as of the date of issue or renewal of, or assumption of liability on, the note or draft. In the case of securities having no par value, the par value for the purpose of this part is the fair market value, as of the date of issue or renewal of, or assumption of liability on, the note or draft.
(3) For certain qualifying facilities. Any cogeneration or small power production facility which is exempt from sections 19, 20 and 204 of the Federal Power Act pursuant to § 292.601 of this chapter shall be exempt from the provisions of this part.
§ 34.2   Placement of securities.
(a) Method of issuance. Upon obtaining authorization from the Commission, utilities may issue securities by either a competitive bid or negotiated placement, provided that:
(1) Competitive bids are obtained from at least two prospective dealers, purchasers or underwriters; or
(2) Negotiated offers are obtained from at least three prospective dealers, purchasers or underwriters; and
(3) The utility:
(i) Accepts the bid or offer that provides the utility with the lowest cost of money for securities with fixed or variable interest or dividend rates, or
(ii) Accepts the bid or offer that provides the utility with the greatest net proceeds for securities with no specified interest or dividend rates, or
(iii) The utility has filed for and obtained authorization from the Commission to accept bids or offers other than those specified in paragraphs (a)(3)(i) or (a)(3)(ii) of this section.
(b) Exemptions. The provisions of paragraph (a) of this section do not apply where:
(1) The securities are to be issued to existing holders of securities on a pro rata basis;
(2) The utility receives an unsolicited offer to purchase the securities;
(3) The securities have a maturity of one year or less; or
(4) The securities are to be issued in support of or to guarantee securities issued by governmental or quasi-governmental bodies for the benefit of the utility.
(c) Prohibitions. No securities will be placed with any person who:
(1) Has performed any service or accepted any fee or compensation with respect to the proposed issuance of securities prior to submission of bids or entry into negotiations for placement of such securities; or
(2) Would be in violation of section 305(a) of the Federal Power Act with respect to the issuance.
§ 34.3   Contents of application for issuance of securities.
Each application to the Commission for authority to issue securities shall contain the information specified in this section. In lieu of filing the information required in paragraphs (e), (i) and (j) of this section, a specific reference may be made to the portion of the registration statement filed under § 34.4(f), which includes the information required in these paragraphs.
(a) The official name of the applicant and address of its principal business office.
(b) The State in which the utility is incorporated, the date of incorporation, and each State in which it operates.
(c) The name, address and telephone number of a person within the utility authorized to receive notices and communications with respect to the application.
(d) The date by which Commission action is requested.
(e) A full description of the securities proposed to be issued, including:
(1) Type and nature of securities;
(2) Amount of securities (par or stated value and number of units);
(3) Interest or dividend rate, if any;
(4) Dates of issuance and maturity;
(5) Institutional rating of the securities—or if the securities are not rated, an explanation as to why they are not rated, and if the securities will be rated, an estimate of the rating; and
(6) Any stock exchange on which the securities will be listed.
(f) The purpose for which the securities for which application is made are to be issued:
(1) If the purpose of such issuance is the construction, completion, extension, or improvement of facilities, describe in reasonable detail the construction program for which the funds were or are to be used.
(2) If the purpose for such issuance is for the refunding of obligations, describe in detail the obligations to be refunded, including the character, principal amounts, applicable discount or premium, dates of issuance and maturity, and all other material facts concerning such obligations.
(3) If the purpose for such issuance is for other than construction or refunding, explain such other purpose(s) in detail.
(g) A statement as to whether or not any application with respect to the transaction or any part thereof is required to be filed with any State regulatory body.
(h) A detailed statement of the facts relied upon by the applicant to show that the issuance:
(1) Is for some lawful object, within the corporate purposes of the applicant and compatible with the public interest, is necessary or appropriate for or consistent with the proper performances by the applicant of service as a public utility and will not impair its ability to perform that service, and
(2) Is reasonably necessary or appropriate for such purposes.
(i) A detailed statement of the bond indenture(s) or other limitations on interest and dividend coverage, and the effects of such limitations on the issuance of additional debt or equity securities.
(j) A brief summary of any rate changes which were made effective during the period for which financial statements are submitted or which became or will become effective after the period for which statements are submitted.
§ 34.4   Required exhibits.
(a) Exhibit A. The applicant must file the statement of corporate purposes from its articles of incorporation.
(b) Exhibit B. A copy of all resolutions of the applicant's directors authorizing the issuance of securities for which the application is made; and copies of the resolution of the stockholders approving such issuance if approval of the stockholders has been obtained.
(c) Exhibit C. The Balance Sheet and attached notes for the most recent 12-month period for which financial statements have been published, provided that the 12-month period ended no more than 4 months prior to the date of the filing of the application, on both an actual basis and a pro forma basis in the form prescribed for the “Comparative Balance Sheet” of FERC Form No. 1, “Annual Report for major electric utilities, licensees and others.” Each adjustment made in determining the pro forma basis must be clearly identified.
(d) Exhibit D. The Income Statement and attached notes for the most recent 12-month period for which financial statements have been published, provided that the 12-month period ended no more than 4 months prior to the date of the filing of the application, on both an actual basis and a pro forma basis in the form prescribed for the “Statement of Income for the Year” of FERC Form No. 1, “Annual Report for major electric utilities, licensees and others.” Each adjustment made in determining the pro forma basis must be clearly identified.
(e) Exhibit E. A Statement of Cash Flows and Computation of Interest Coverage on an actual basis and a pro forma basis for the most recent 12-month period for which financial statements have been published, provided that the 12-month period ended no more than 4 months prior to the date of the filing of the application. The Statement of Cash Flows must be in the form prescribed for the “Statement of Cash Flows” of the FERC Form No. 1, Annual Report for major electric utilities, licensees and others,” followed by a computation of interest coverage, in the form of the following worksheet:
(f) Exhibit F. A copy of registration statement and exhibits which are filed with the Securities and Exchange Commission for the proposed security issuance.
§ 34.5   Additional information.
The Commission may, in its discretion, require the filing of additional information which appears necessary to reach a determination on any particular application.
§ 34.6   Form and style.
Each application pursuant to this part 34 shall conform to the requirements of subpart T of part 385 of this chapter.
§ 34.7   Filing requirements.
Applications must be filed with the Secretary of the Commission in accordance with filing procedures posted on the Commission's Web site at http://www.ferc.gov. If an applicant seeks to protect any portion of an application from public disclosure, the applicant must make its filing in accordance with the Commission's instructions for filing privileged materials and critical energy infrastructure information in this chapter.
§ 34.8   Verification.
The original application shall be signed by an authorized representative of the applicant, who has knowledge of the matters set forth therein, and it shall be verified under oath.
An application verification shall be signed under oath by an authorized representative of the applicant, who has knowledge of the matters set forth therein and as provided in § 385.2005 of this chapter, and retained at the applicant's business location until the relevant proceeding has been concluded.
§ 34.9   Reports.
The applicant must file reports under § 131.43 and § 131.50 of this chapter no later than 30 days after the sale or placement of long-term debt or equity securities or the entry into guarantees or assumptions of liabilities pursuant to authority granted under this part.
Each application shall be accompanied by the submission of a filing fee if one is prescribed in part 381 of this chapter.