Chapter 366: Affiliates of Public Utilities

Terms used in this chapter shall be construed as follows unless a different meaning is clearly apparent from the language or context:

I. "Person" shall mean and include individuals, corporations, trustees, lessees, holders of beneficial equitable title, voluntary associations, receivers, and partnerships.

II. "Affiliate" shall mean and include the following:

(a) Any person that directly or indirectly owns, controls, or holds with power to vote a majority of the outstanding voting securities or such minority thereof as to give him substantial control of such a public utility.

(b) Every person who the commission may determine as a matter of fact, after investigation and hearing, is either directly or indirectly through intermediate persons, or otherwise, actually exercising any substantial influence over the policies and actions of a public utility, whether or not in conjunction with one or more persons.

(c) Any person with whom a public utility has a management or service contract or arrangement of the character set forth in RSA 366:3, but not including contracts for personal services with persons not otherwise affiliated.

(d) Any person that is directly or indirectly owned, controlled or held by any person described in subparagraph (a) of this paragraph through either power to vote a majority of the outstanding voting securities, or such a minority so as to maintain substantial control.

The provisions of this chapter shall not apply to any excepted local exchange carrier.

No public utility shall, without the approval of the department of energy, permit any employee to sell, offer for sale, or solicit the purchase of any security issued by an affiliate during such hours as such employee is engaged to perform any duty of such public utility; nor shall any public utility by any means or device whatsoever require any employee to purchase or contract to purchase any of its securities or those of any other person or corporation; nor shall any public utility require any employee to permit the deduction from his wages or salary of any sum as a payment or to be applied as a payment on any purchase or contract to purchase any security of such public utility or of any other person.

The original or a verified copy of any contract or arrangement and of any modification thereof or a verified summary of any unwritten contract or arrangement, the consideration of which exceeds $500, hereafter entered into between a public utility and an affiliate providing for the furnishing of managerial, supervisory, construction, engineering, accounting, purchasing, financial, or any other services either to or by a public utility or an affiliate shall be filed by the public utility with the department of energy within 10 days after the date on which the contract is executed or the arrangement entered into. The department may also require a public utility to file in such form as the department may require full information with respect to any purchase from or sale to an affiliate, whether or not made in pursuance of a continuing contract or arrangement.

Any contract or arrangement not filed with the department of energy pursuant to RSA 366:3 shall be unenforceable in any court in this state and payments thereunder may be disallowed by the department unless the later filing thereof is approved in writing by the department. The commission shall disallow payment if recommended by the department.

The department of energy shall have full power and authority to investigate any such contract, arrangement, purchase, or sale and initiate a proceeding related thereto before the commission. If the commission after notice and hearing shall find any such contract, arrangement, purchase, or sale to be unjust or unreasonable, the commission may make such reasonable order relating thereto as the public good requires. In any such investigation, the burden shall be on the public utility and affiliate to prove the reasonableness of any such contract, arrangement, purchase, or sale with, from, or to an affiliate. If the public utility shall fail to satisfy the commission of the reasonableness of any such contract, arrangement, purchase, or sale, the commission may disapprove the same and disallow payments thereunder or such part of any such payment as the commission shall find to be unjust or unreasonable. No payment disallowed by the commission shall be capitalized or included as an operating cost of the public utility in the fixing of rates or as an asset in fixing a rate base. If in any such investigation the public utility or affiliate shall unreasonably refuse to comply with any request of the commission or the department for information with respect to relevant accounts and records, whether of such public utility or any affiliate, any portion of which may be applicable to any transaction under investigation, so that such parts thereof as the commission or the department may deem material may be made part of the record, such refusal shall justify the commission in disapproving the transaction under investigation and disallowing payments in pursuance thereof.

If as a result of an investigation or proceeding in accordance with RSA 366:5 the commission shall find that any public utility is making any payment or about to make any payment or doing or about to do any other thing which substantially threatens or impairs the ability of the public utility to render adequate service at reasonable rates or otherwise to discharge its duty to the public, the commission may apply to the superior court for an order directing the public utility to cease making any such payment or doing such other thing; and, thereupon, the court shall make such order as the public good may require.

In any proceeding whether upon the department's initiation or commission's own motion or upon complaint involving the rates or practices of any public utility, the commission may disallow the inclusion in the accounts of a public utility of any payments or compensation to an affiliate for any services rendered, or property furnished, under existing contracts or arrangements with an affiliate unless such public utility shall establish the reasonableness of such payment or compensation.

Every public utility annually reporting to the commission or department of energy under RSA 374 shall also annually report the name and address of, and the number of shares held by, its officers and directors and each holder of one percent or more of the voting capital stock of the reporting public utility according to its records.

The commission or department of energy may also require such other information as to the direct or indirect control of a public utility or affiliate from a public utility, affiliate, or other person as may be reasonably required for the effective enforcement of this chapter.

From any order or decision of the commission in the exercise of the jurisdiction and power conferred upon it by this chapter, an appeal shall lie to the supreme court. The procedure for rehearings and appeals shall be that prescribed by RSA 541.