Chapter 369: Issuance of Stock and Other Securities; General Provisions

A public utility lawfully engaged in business in this state may, with the approval of the commission but not otherwise, issue and sell its stock, bonds, notes and other evidences of indebtedness payable more than 12 months after the date thereof for lawful corporate purposes. The proposed issue and sale of securities will be approved by the commission where it finds that the same is consistent with the public good. Such approval shall extend to the amount of the issue authorized and the purpose or purposes to which the securities or the proceeds thereof are to be applied, and shall be subject to such reasonable terms and conditions as the commission may find to be necessary in the public interest; provided, however, that the provisions of RSA 293-A shall be observed by corporations organized under the laws of this state in respect of the corporate authorization required and of other formalities to be observed.

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

A public utility may, with the approval of the commission but not otherwise, mortgage its present and future property, tangible and intangible including franchises, to secure the payment of its bonds or notes, including any bonds or notes to be thereafter issued under the provisions of such mortgage; provided, however, that no such approval shall be required for any mortgage of property pursuant to after-acquired clauses of mortgages securing the payment of bonds or notes issued prior to September 1, 1951.

Any such public utility which may apply to the commission for authority to issue such securities shall file with its application a statement in reasonable detail, showing the actual cost already incurred and the estimated cost to be incurred for any of the purposes for which such securities are to be issued and the actual cost already incurred and the estimated cost to be incurred for such purposes.

The commission, after such hearing or investigation as it may deem proper, shall determine the actual or probable cost incurred or to be incurred; and, if in its judgment the issue of such securities upon the terms proposed is consistent with the public good, it shall authorize the same to an amount sufficient, at the price fixed in accordance with the laws applicable thereto, to provide funds for defraying the cost as so determined.

Upon any application for authority to issue securities for the purpose of providing funds for discharging any indebtedness incurred by a public utility in good faith prior to July 1, 1914, in acquiring property, or for other lawful corporate purpose, no deduction shall be made from the cost thereof, as determined by the commission, on account of any estimated depreciation of plant and properties beyond the portion, if any, of such cost which it may appear has been paid out of the depreciation reserve of said public utility, if any, or out of earnings, to make good depreciation.

I. No public utility engaged in business within this state shall issue or renew any notes, bonds, or other evidences of indebtedness payable less than 12 months after the date thereof, except as provided in this section, by rules adopted by the commission, or by specific order of the commission in an individual case.

II. In establishing the amounts of the notes, bonds, and other evidences of indebtedness which the utility is permitted to issue or renew without prior commission approval, the commission shall consider the size, circumstances, and other characteristics of each utility, the aggregate term of the renewals of such notes, bonds, and other evidences of indebtedness, and the time period and manner for reporting such renewals to the commission.

I. Public utilities carrying on business both within and without this state shall not be subject to the provisions of RSA 369:1-7 when the stock or obligations are to be issued for the acquisition of property, the construction, completion, extension or improvement of their facilities, or the improvement or maintenance of their service entirely without this state, or the discharge or refunding of their obligations or reimbursement of money actually expended for such purposes; provided, however, that the provisions of this section shall not be applicable to the financing by domestic electric utilities of their interests in electric power facilities, as defined in RSA 374-A:1, located without the state.

II. (a) To the extent that the approval of the commission is required by any other statute for any corporate restructuring, financing, change in long-term or short-term indebtedness, or issuance of stock involving parent companies of a public utility regulated by the commission, the approval of the commission shall not be required if the public utility files with the commission a detailed representation in writing no less than 60 days prior to the anticipated completion of the transaction that the transaction will not adversely affect rates, terms, service, or operation of the public utility within the state.

(b) (1) To the extent that the approval of the commission is required by any other statute for any corporate merger or acquisition involving parent companies of a public utility whose rates, terms, and conditions of service are regulated by the commission, the approval of the commission shall not be required if the public utility files with the commission a detailed written representation no less than 60 days prior to the anticipated completion of the transaction that the transaction will not have an adverse effect on rates, terms, service, or operation of the public utility within the state.

(2) If the commission does not issue an order within 60 days of the completed filing, the transaction shall be considered approved as filed.

(3) If the commission within 30 days, and after an opportunity for a public hearing, issues a preliminary written determination that such a merger or acquisition will have an adverse effect on rates, terms, service, or operation of the public utility in the state, the commission shall allow the utility at least 30 days to amend its filing in order to address the commission's preliminary determination.

(4) The commission may extend making its preliminary determination of adverse effect on rates, terms, service, or operation of the public utility in the state for 30 days.

(5) Should the commission find within 30 days after receiving the amended filing, the proposed merger or acquisition has an adverse effect, the commission shall review the transaction under the statute which would have otherwise applied but for this section, and, after an opportunity for a public hearing, issue a ruling based upon the other applicable statute or statutes within 60 days of its determination of adverse effect.

The commission shall have no power to authorize the capitalization, directly or indirectly, of any franchise to be a corporation, or of any franchise or any right to own, operate or enjoy any franchise whatever in excess of the amount (exclusive of any tax or annual charge) actually paid to the state or to a political subdivision thereof as a consideration for the grant of such franchise or right, all such franchises, rights and privileges being granted in the public interest only, and not justly subject to capitalization against the public.

No unincorporated person or partnership, being a public utility through the ownership, operation or management of property devoted to public use, shall be required to apply to the commission for authority to issue notes or bonds unless the same are to be secured by mortgage of the property so devoted to public use.

No public utility shall apply the proceeds of any stock, bonds or notes to any other purpose than those specified in the order of the commission authorizing the issue of the same.

Every public utility issuing stocks, bonds or other evidence of indebtedness subject to the provisions hereof shall file with the commission an account showing, in such detail as the commission shall require, the disposition of the proceeds of such issue.

Any foreign corporation which shall engage in intrastate business as a public utility within this state after May 1, 1919, shall be subject to the provisions hereof, and, by applying for authority to begin or by continuing to engage in such intrastate business after said date, shall be deemed to have consented to said provisions as a condition precedent to its right to engage in such intrastate business.

A public utility for any corporate purpose approved by the commission, upon petition of the corporation, may, from time to time, with the authority of the commission as provided in this chapter, increase its capital stock or bonds beyond the amounts fixed and limited by its articles of association or its charter or by any act of the general court.

Whenever a public utility organized under the laws of this state shall issue (1) additional shares of its capital stock having unconditionally the general right to vote or (2) securities convertible into shares of such capital stock, it shall, except as hereinafter provided, first offer such shares or convertible securities proportionately to holders of its stock having such voting right in such manner as shall have been determined by its directors; provided, however, that if the charter, articles of agreement or stockholder votes authorizing the outstanding stock have limited or eliminated the rights of holders of such outstanding stock to subscribe to such shares or convertible securities, such offer need not be made, except to the extent, if any, required by said charter, articles of agreement or votes.

Whenever a public utility incorporated under the laws of this state shall apply to the commission for authority to issue any stock requiring the approval of the commission, the stockholders shall not become individually liable for debts and contracts of the corporation under RSA 296:30, if the amount of stock which the commission authorized the corporation to issue upon any such application is paid in and a certificate of the treasurer and a majority of the directors to that effect is executed, filed and recorded in the manner provided by RSA 296:30 within 90 days after the filing in the office of the secretary of state of the order of the commission authorizing the issue of such stock; provided, that, in cases where such stock is an increase of prior capital, the whole amount of the prior capital as theretofore fixed and limited by the corporation, or so much thereof as the stockholders have voted to issue, or as the commission has authorized to be issued, has also been paid in and that the certificate so filed by the treasurer and directors shows that fact.