§ 6-102 — Authorization of issues of stock

(a) Subject to the provisions of this Act and of the order of the Commission issued as provided in this Act, a public utility may issue stocks and stock certificates, and bonds, notes and other evidences of indebtedness payable at periods of more than 12 months after the date thereof for any lawful purpose. However, such public utility shall first have secured from the Commission an order authorizing such issue and stating the amount thereof and the purpose or purposes to which the issue or the proceeds thereof are to be applied, and that in the opinion of the Commission, the money, property or labor to be procured or paid for by such issue is reasonably required for the purpose or purposes specified in the order. (b) The provisions of this subsection (b) shall apply only to (1) any issuances of stock in a cumulative amount, exclusive of any issuances referred to in item (3), that are 10% or more in a calendar year or 20% or more in a 24-month period of the total common stockholders' equity or of the total amount of preferred stock outstanding, as the case may be, of the public utility, and (2) to any issuances of bonds, notes or other evidences of indebtedness in a cumulative principal amount, exclusive of any issuances referred to in item (3), that are 10% or more in a calendar year or 20% or more in a 24-month period of the aggregate principal amount of bonds, notes and other evidences of indebtedness of the public utility outstanding, all as of the date of the issuance, but shall not apply to (3) any issuances of stock or of bonds, notes or other evidences of indebtedness 90% or more of the proceeds of which are to be used by the public utility for purposes of refunding, redeeming or refinancing outstanding issues of stock, bonds, notes or other evidences of indebtedness. To enable it to determine whether it will issue the order required by subsection (a) of this Section, the Commission may hold a hearing and may make such additional inquiry or investigation, and examine such witnesses, books, papers, accounts, documents and contracts and require the filing of such data as it may deem of assistance. The public utility may be required by the Commission to disclose every interest of the directors of such public utility in any transaction under investigation. The Commission shall have power to investigate all such transactions and to inquire into the good faith thereof, to examine books, papers, accounts, documents and contracts of public utilities, construction or other companies or of firms or individuals with whom the public utility shall have had financial transactions, for the purpose of enabling it to verify any statements furnished, and to examine into the actual value of property acquired by or services rendered to such public utility. Before issuing its order, the Commission, when it is deemed necessary by the Commission, shall make an adequate physical valuation of all property of the public utility, but a valuation already made under proper public supervision may be adopted, either in whole or in part, at the discretion of the Commission; and shall also examine all previously authorized or outstanding securities of the public utility, and fixed charges attached thereto. A statement of the results of such physical valuation, and a statement of the character of all outstanding securities, together with the conditions under which they are held, shall be included in the order. The Commission may require that such information or such part thereof as it thinks proper, shall appear upon the stock, stock certificate, bond, note or other evidence of indebtedness authorized by its order. The Commission may by its order grant permission for the issue of such stock certificates, or bonds, notes or other evidences of indebtedness in the amount applied for, or in a lesser amount, or not at all, and may attach to the exercise of its permission such condition or conditions as it may deem reasonable and necessary. Nothing in this Section shall prevent a public utility from seeking, nor the Commission from approving, a shelf registration plan for issuing securities over a reasonable period in accordance with regulations established by the United States Securities and Exchange Commission. Any securities issued pursuant to an approved shelf registration plan need not be further approved by the Commission so long as they are in compliance with the approved shelf registration plan. The Commission shall have the power to refuse its approval of applications to issue securities, in whole or in part, upon a finding that the issue of such securities would be contrary to public interest. The Commission may also require the public utility to compile for the information of its shareholders such facts in regard to its financial transactions, in such form as the Commission may direct. No public utility shall, without the consent of the Commission, apply the issue of any stock or stock certificates, or bond, note or other evidence of indebtedness, which was issued pursuant to an order of the Commission entered pursuant to this subsection (b), or any part thereof, or any proceeds thereof, to any purpose not specified in the Commission's order or to any purpose specified in the Commission's order in excess of the amount authorized for such purpose; or issue or dispose of the same on any terms less favorable than those specified in such order, or a modification thereof. The Commission shall have the power to require public utilities to account for the disposition of the proceeds of all sales of stocks and stock certificates, and bonds, notes and other evidences of indebtedness, which were issued pursuant to an order of the Commission entered pursuant to this subsection (b), in such form and detail as it may deem advisable, and to establish such rules and regulations as it may deem reasonable and necessary to insure the disposition of such proceeds for the purpose or purposes specified in its order. (c) A public utility may issue notes, for proper purposes, and not in violation of any provision of this Act or any other Act, payable at periods of not more than 12 months after the date of issuance of the same, without the consent of the Commission; but no such note shall, in whole or in part, be renewed or be refunded from the proceeds of any other such note or evidence of indebtedness from time to time without the consent of the Commission for an aggregate period of longer than 2 years. A "telecommunications carrier" as that term is defined by Section 13-202 of this Act is exempt from the requirements of this subsection (c). (d) Any issuance of stock or of bonds, notes or other evidences of indebtedness, other than issuances of notes pursuant to subsection (c) of this Section, which is not subject to subsection (b) of this Section, shall be regulated by the Commission as follows: the public utility shall file with the Commission, at least 15 days before the date of the issuance, an informational statement setting forth the type and amount of the issue and the purpose or purposes to which the issue or the proceeds thereof are to be applied. Prior to the date of the issuance specified in the public utility's filing, the Commission, if it finds that the issuance is not subject to subsection (b) of this Section, shall issue a written order in conformance with subsection (a) of this Section authorizing the issuance. Notwithstanding any other provisions of this Act, the Commission may delegate its authority to enter the order required by this subsection (d) to an administrative law judge. (e) The Commission shall have no power to authorize the capitalization of the right to be a corporation, or to authorize the capitalization of any franchise, license, or permit whatsoever or the right to own, operate or enjoy any such franchise, license, or permit, in excess of the amount (exclusive of any tax or annual charge) actually paid to the State or to a political subdivision thereof as the consideration for the grant of such franchise, license, permit or right; nor shall any contract for consolidation or lease be capitalized, nor shall any public utility hereafter issue any bonds, notes or other evidences of indebtedness against or as a lien, upon any contract for consolidation or merger. (f) The provisions of this Section shall not apply to public utilities which are not corporations duly incorporated under the laws of this State to the extent that any such public utility may issue stock, bonds, notes or other evidences of indebtedness not directly or indirectly constituting or creating a lien or charge on, or right to profits from, any property used or useful in rendering service within this State.

Legislative History

(Source: P.A. 100-840, eff. 8-13-18.)