§ 79z-5b. — Treatment of foreign utilities.
[Laws in effect as of January 24, 2002]
[Document not affected by Public Laws enacted between
January 24, 2002 and December 19, 2002]
[CITE: 15USC79z-5b]
TITLE 15--COMMERCE AND TRADE
CHAPTER 2C--PUBLIC UTILITY HOLDING COMPANIES
Sec. 79z-5b. Treatment of foreign utilities
(a) Exemptions for foreign utility companies
(1) In general
A foreign utility company shall be exempt from all of the
provisions of this chapter, except as otherwise provided under this
section, and shall not, for any purpose under this chapter, be
deemed to be a public utility company under section 79b(a)(5) of
this title, notwithstanding that the foreign utility company may be
a subsidiary company, an affiliate, or an associate company of a
holding company or of a public utility company.
(2) State commission certification
Section \1\ (a)(1) shall not apply or be effective unless every
State commission having jurisdiction over the retail electric or gas
rates of a public utility company that is an associate company or an
affiliate of a company otherwise exempted under section \1\ (a)(1)
(other than a public utility company that is an associate company or
an affiliate of a registered holding company) has certified to the
Commission that it has the authority and resources to protect
ratepayers subject to its jurisdiction and that it intends to
exercise its authority. Such certification, upon the filing of a
notice by such State commission, may be revised or withdrawn by the
State commission prospectively as to any future acquisition. The
requirement of State certification shall be deemed satisfied if the
relevant State commission had, prior to October 24, 1992, on the
basis of prescribed conditions of general applicability, determined
that ratepayers of a public utility company are adequately insulated
from the effects of diversification and the diversification would
not impair the ability of the State commission to regulate
effectively the operations of such company.
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\1\ So in original. Probably should be ``subsection''.
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(3) ``Foreign utility company'' defined
For purposes of this section, the term ``foreign utility
company'' means any company that--
(A) owns or operates facilities that are not located in any
State and that are used for the generation, transmission, or
distribution of electric energy for sale or the distribution at
retail of natural or manufactured gas for heat, light, or power,
if such company--
(i) derives no part of its income, directly or
indirectly, from the generation, transmission, or
distribution of electric energy for sale or the distribution
at retail of natural or manufactured gas for heat, light, or
power, within the United States; and
(ii) neither the company nor any of its subsidiary
companies is a public utility company operating in the
United States; and
(B) provides notice to the Commission, in such form as the
Commission may prescribe, that such company is a foreign utility
company.
(b) Ownership of foreign utility companies by exempt holding companies
Notwithstanding any provision of this chapter except as provided
under this section, a holding company that is exempt under section 79c
of this title shall be permitted without condition or limitation under
the \2\ chapter to acquire and maintain an interest in the business of
one or more foreign utility companies.
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\2\ So in original. Probably should be ``this''.
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(c) Registered holding companies
(1) Ownership of foreign utility companies by registered
holding companies
Notwithstanding any provision of this chapter except as
otherwise provided under this section, a registered holding company
shall be permitted as of October 24, 1992 (without the need to apply
for, or receive approval from the Commission) to acquire and hold
the securities or an interest in the business, of one or more
foreign utility companies. The Commission shall promulgate rules or
regulations regarding registered holding companies' acquisition of
interests in foreign utility companies which shall provide for the
protection of the customers of a public utility company which is an
associate company of a foreign utility company and the maintenance
of the financial integrity of the registered holding company system.
(2) Issuance of securities
The issuance of securities by a registered holding company for
purposes of financing the acquisition of a foreign utility company,
the guarantee of securities of a foreign utility company by a
registered holding company, the entering into service, sales, or
construction contracts, and the creation or maintenance of any other
relationship between a foreign utility company and a registered
holding company, its affiliates and associate companies, shall
remain subject to the jurisdiction of the Commission under this
chapter (unless otherwise exempted under this chapter, in the case
of a transaction with an affiliate or associate company located
outside of the United States). Any State commission with
jurisdiction over the retail rates of a public utility company which
is part of a registered holding company system may make such
recommendations to the Commission regarding the registered holding
company's relationship to a foreign utility company, and the
Commission shall reasonably and fully consider such State
recommendation.
(3) Construction
Any interest in the business of 1 or more foreign utility
companies, or 1 or more companies organized exclusively to own,
directly or indirectly, the securities or other interest in a
foreign utility company, shall for all purposes of this chapter, be
considered to be--
(A) consistent with the operation of a single integrated
public utility system, within the meaning of section 79k of this
title; and
(B) reasonably incidental, or economically necessary or
appropriate, to the operations of an integrated public utility
system, within the meaning of section 79k of this title.
(d) Effect on existing law; no State preemption
Nothing in this section shall--
(1) preclude any person from qualifying for or maintaining any
exemption otherwise provided for under this chapter or the rules,
regulations, or orders promulgated or issued under this chapter; or
(2) be deemed or construed to limit the authority of any State
(including any State regulatory authority) with respect to--
(A) any public utility company or holding company subject to
such State's jurisdiction; or
(B) any transaction between any foreign utility company (or
any affiliate or associate company thereof) and any public
utility company or holding company subject to such State's
jurisdiction.
(e) Reporting requirements
(1) Filing of reports
A public utility company that is an associate company of a
foreign utility company shall file with the Commission such reports
(with respect to such foreign utility company) as the Commission may
by rules, regulations, or order prescribe as necessary or
appropriate in the public interest or for the protection of
investors or consumers.
(2) Notice of acquisitions
Not later than 30 days after the consummation of the acquisition
of an interest in a foreign utility company by an associate company
of a public utility company that is subject to the jurisdiction of a
State commission with respect to its retail electric or gas rates or
by such public utility company, such associate company or such
public utility company, shall provide notice of such acquisition to
every State commission having jurisdiction over the retail electric
or gas rates of such public utility company, in such form as may be
prescribed by the State commission.
(f) Prohibition on assumption of liabilities
(1) In general
No public utility company that is subject to the jurisdiction of
a State commission with respect to its retail electric or gas rates
shall issue any security for the purpose of financing the
acquisition, or for the purposes of financing the ownership or
operation, of a foreign utility company, nor shall any such public
utility company assume any obligation or liability as guarantor,
endorser, surety, or otherwise in respect of any security of a
foreign utility company.
(2) Exception for holding companies which are predominantly
public utility companies
Subsection (f)(1) of this section shall not apply if:
(A) the public utility company that is subject to the
jurisdiction of a State commission with respect to its retail
electric or gas rates is a holding company and is not an
affiliate under section 79b(a)(11)(B) of this title of another
holding company or is not subject to regulation as a holding
company and has no affiliate as defined in section 79b(a)(11)(A)
of this title that is a public utility company subject to the
jurisdiction of a State commission with respect to its retail
electric or gas rates; and
(B) each State commission having jurisdiction with respect
to the retail electric and gas rates of such public utility
company expressly permits such public utility to engage in a
transaction otherwise prohibited under section \3\ (f)(1); and
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(C) the transaction (aggregated with all other then-
outstanding transactions exempted under this subsection) does
not exceed 5 per centum of the then-outstanding total
capitalization of the public utility.
(g) Prohibition on pledging or encumbering utility assets
No public utility company that is subject to the jurisdiction of a
State commission with respect to its retail electric or gas rates shall
pledge or encumber any utility assets or utility assets of any
subsidiary thereof for the benefit of an associate foreign utility
company.
(Aug. 26, 1935, ch. 687, title I, Sec. 33, as added Pub. L. 102-486,
title VII, Sec. 715, Oct. 24, 1992, 106 Stat. 2912.)
References in Text
This chapter and the chapter, referred to in subsecs. (a)(1), (b),
(c), and (d)(1), was in the original ``this Act'' and ``the Act'',
respectively, and was translated as reading ``this title'', meaning
title I of act Aug. 26, 1935, ch. 687, known as the Public Utility
Holding Company Act of 1935, to reflect the probable intent of Congress.
Prior Provisions
A prior section 33 of act Aug. 26, 1935, ch. 687, was renumbered
section 36 and is classified to section 79 of this title.
State Authorities; Construction
Nothing in this section to be construed as affecting or intending to
affect, or in any way to interfere with, authority of any State or local
government relating to environmental protection or siting of facilities,
see section 731 of Pub. L. 102-486, set out as a note under section 79
of this title.
