New Mexico Administrative Code › Title 17 - PUBLIC UTILITIES AND UTILITY SERVICES › Chapter 6 - AFFILIATE TRANSACTIONS › Part 450 - AFFILIATE TRANSACTIONS › Section 17.6.450.10 - CLASS II TRANSACTIONS: APPROVAL OF GENERAL DIVERSIFICATION PLAN

Current through Register Vol. 35, No. 13, July 16, 2024
A. No public
				utility may engage in a Class II transaction after November 30, 1982 [the
				effective date of former General Order No. 39] without first obtaining written
				approval of a general diversification plan from the Commission.
B. The general diversification plan shall
				include:
(1) to the extent known the name,
				home office address, and chief executive officer of each affiliate, corporate
				subsidiary, holding company, or person which is the subject of the Class II
				transaction;
(2) a statement of the
				goals and effects upon the utility operation of the Class II transaction
				including an analysis of the benefits, risks, and any costs to the public
				utility which could arise, and including all tax effects on the utility both on
				a consolidated entity basis and on a stand-alone basis;
(3) the type of corporate structure to be
				used;
(4) the means of implementing
				the corporate structure to be used, including, but not limited to, amendments
				to corporate articles, any issuances, acquisitions, cancellations, exchanges,
				transfers, or conversions of securities, and the impact of such on the rights
				of creditors and security holders;
(5) the anticipated capital structure for the
				utility, its affiliates, and the consolidated entity (utility plus affiliates)
				for the next five (5) years;
(6)
				the contemplated annual and cumulative investment in each affiliated interest
				for the next five (5) years in dollars and as a percentage of projected net
				utility plant and an explanation of why this level of investment is reasonable
				and will not increase the risks of investment in the public utility;
(7) an explanation of how the affiliate(s)
				will be financed, by whom, and the type and amounts of capital or instruments
				of indebtedness;
(8) an explanation
				of how the utility's capital structure, cost of capital, and ability to attract
				capital at reasonable rates will be impacted;
(9) an explanation of how the utility can
				assure that adequate capital will still be available for the construction of
				necessary new utility plants and at no greater cost than if the utility did not
				engage in this Class II transaction;
(10) to the extent not answered in (9) above,
				an explanation of how ratepayers will be protected and insulated from any
				risks, costs, or other adverse and material effects attributable to Class II
				transactions or their resulting effects;
(11) if the utility intends to divest a
				corporate subsidiary, an explanation of the reasons for such divestiture, how
				it will be accomplished, how it will affect utility operations, financial
				viability, cost of capital, and adequacy of service during the next ten (10)
				years following divestiture, the anticipated proceeds to the utility, the
				extent, if any, that the utility intends for ratepayers to share in the
				proceeds or otherwise benefit from the divestiture, the amount of and reasons
				why any ratepayer funds have flowed directly or indirectly to the benefit of
				the corporate subsidiary; and
(12)
				to the extent not provided above, such information or representations that will
				allow the Commission to make the findings contained in NMPSC Rule 450.7(c)
				[Subsection C of 17.6.450 10.NMAC].