Michigan Administrative Code › Department - Licensing and Regulatory Affairs › Public Service Commission › Mergers and Acquisitions › Section R. 460.302 - Definitions

Current through Vol. 24-12, July 15, 2024
Rule 2. As used in these rules:
(a) "Acquire" or "acquisition" means to
				obtain an interest in a jurisdictional regulated utility through a transaction
				that results in a transfer of control of the jurisdictional regulated utility.
				An underwriter or broker-dealer that obtains an interest in securities solely
				for the purpose of facilitating a distribution of securities does not thereby
				acquire or make an acquisition of an interest in the jurisdictional regulated
				utility for purposes of MCL 460.6q and these rules.
(b) "Applicant" means any person seeking
				approval from the commission under MCL 460.6q and these rules.
(c) "Asset" means real and personal property,
				including natural gas and electric distribution facilities, electric
				transmission and generation facilities, and natural gas transmission and
				storage facilities, owned by a jurisdictional regulated utility and used to
				directly provide natural gas or electric utility services to end users at rates
				regulated by the commission. For purposes of these standards, asset does not
				include accounts receivable.
(d)
				"Assign" or "assignment" means the transfer to another person of any of the
				interest held in an asset or assets.
(e) "Encumber" or "encumbrance" or "encumber
				assets" means subjecting an asset or assets of a jurisdictional regulated
				utility to a lien or security interest for purposes other than to facilitate,
				directly or indirectly, financing of utility operations, or for purposes other
				than to facilitate, directly or indirectly, the provision of utility service.
				It does not include a refinancing of existing secured debts or securities to
				the extent that the amount refinanced is equal to or less than the amount of
				the existing secured debt or security.
(f) "Jurisdictional regulated utility" means
				a utility whose rates are regulated by the commission. Jurisdictional regulated
				utility does not include a telecommunications provider as defined in the
				Michigan telecommunications act, 1991 PA 179, MCL 484.2101 to 484.2604, or a
				motor carrier as defined in the motor carrier act, 1933 PA 254, MCL 475.1 to
				479.43.
(g) "Merge" or "merger"
				means the combination or consolidation of a jurisdictional regulated utility
				with another person in a manner that results in a transfer of control of the
				jurisdictional regulated utility.
(h) "Original book cost" means the amount at
				which an asset is recorded in the books of accounts of the jurisdictional
				regulated utility, plus additions, without deduction of related provisions for
				accrued depreciation, amortization, securitization, write-downs, impairments,
				or for other purposes.
(i) "Person"
				means an individual, corporation, association, partnership, utility, or any
				other private or public entity. Person includes a jurisdictional regulated
				utility.
(j) "Normal course of
				business" means a transaction that is related to the transfer, sale,
				assignment, or encumbrance of assets and that satisfies any 1 of the following
				criteria:
(i) With respect to utilities
				having 500,000 or more retail customers, a transaction that involves the
				transfer, sale, or assignment of assets having an original book cost equal to
				or less than the dollar threshold identified in the following table:
Transaction Date
Dollar Threshold
Prior to December 31, 2020
$50 million
January 1, 2021 to December 31, 2030
$65 million
January 1, 2031 to December 31, 2040
$85 million
January 1, 2041 to December 31, 2050
$105 million
January 1, 2051 to December 31, 2060
$135 million
January 1, 2061 to December 31, 2070
$175 million
January 1, 2071 to December 31, 2080
$225 million
January 1, 2081 and beyond
$275 million
(ii)
				With respect to utilities having fewer than 500,000 retail customers, a
				transaction that involves the transfer, sale, or assignment of assets having an
				original book cost equal to or less than the dollar threshold identified in the
				following table:
Transaction Date
Dollar Threshold
Prior to December 31, 2020
$10 million
January 1, 2021 to December 31, 2030
$12.8 million
January 1, 2031 to December 31, 2040
$16.4 million
January 1, 2041 to December 31, 2050
$21 million
January 1, 2051 to December 31, 2060
$26.9 million
January 1, 2061 to December 31, 2070
$34.4 million
January 1, 2071 to December 31, 2080
$44 million
January 1, 2081 and beyond
$56.3 million
(iii) With respect to all utilities, a
				transaction, regardless of amount, that constitutes a sale, assignment,
				transfer, or encumbrance of interests in fuel, natural gas, purchased power,
				electric or natural gas transmission capacity, natural gas storage services, or
				other commodities, if such transaction is otherwise subject to review for
				reasonableness and prudence in a gas cost recovery or power supply cost
				recovery proceeding, or a successor thereof.
(iv) With respect to cooperative utilities
				whose rates are regulated by the commission, an encumbrance of assets in which
				the total aggregate proceeds to the jurisdictional regulated utility from all
				of the currently outstanding encumbrances immediately following the encumbrance
				will not exceed 5 million dollars.
A transaction described in subdivision (j) (i), (ii), (iii),
				  or (iv) of this rule shall not be classified as in the normal course of
				  business if the transaction, either directly or indirectly, is in connection
				  with the acquisition, transfer of control, or merger of a jurisdictional
				  regulated utility, or if the transaction involves the transfer or sale of an
				  electrical generating plant that has a total installed generating capacity
				  (nameplate rating) of more than 20 megawatts.