§824c Issuance of securities; assumption of liabilities

Summary

Public utilities must get the Federal Power Commission’s permission before they sell securities or promise to pay for someone else’s securities. The Commission will only approve this if it finds the action is legal, fits the company’s purposes, serves the public interest, is needed for the utility to do its job, won’t hurt its ability to provide service, and is reasonably necessary. These rules took effect six months after August 26, 1935. The Commission can hold hearings and approve with limits, changes, or extra conditions, and can later change those orders after hearings. A utility may not use a security or its money for anything not allowed in the order or use more than the allowed amount without Commission consent. The Commission won’t let a company count a corporate right, franchise, permit, or merger/lease contract as capital for more than the amount actually paid (not counting taxes or annual charges). Short-term notes maturing in one year or less are exempt if they total no more than 5 percent of the par value of the utility’s other outstanding securities; if there is no par value, use fair market value at issue. The utility must file a notification with the Commission within ten days after issuing such notes. These rules do not apply to utilities whose securities are regulated by a State commission. Nothing here means the United States guarantees any securities. If the Commission approves a utility’s issues, the utility may file duplicate reports with the Securities and Exchange Commission instead of the reports required by sections 77g, 78l, and 78m of title 15.