16 USC 824(b)

§ 824b

TITLE 16—CONSERVATION

§ 824b. Disposition of property; consolidations;
purchase of securities
(a) Authorization
(1) No public utility shall, without first having
secured an order of the Commission authorizing
it to do so—
(A) sell, lease, or otherwise dispose of the
whole of its facilities subject to the jurisdiction of the Commission, or any part thereof of
a value in excess of $10,000,000;
(B) merge or consolidate, directly or indirectly, such facilities or any part thereof with
those of any other person, by any means whatsoever;
(C) purchase, acquire, or take any security
with a value in excess of $10,000,000 of any
other public utility; or
(D) purchase, lease, or otherwise acquire an
existing generation facility—
(i) that has a value in excess of $10,000,000;
and
(ii) that is used for interstate wholesale
sales and over which the Commission has jurisdiction for ratemaking purposes.
(2) No holding company in a holding company
system that includes a transmitting utility or
an electric utility shall purchase, acquire, or
take any security with a value in excess of
$10,000,000 of, or, by any means whatsoever, directly or indirectly, merge or consolidate with,
a transmitting utility, an electric utility company, or a holding company in a holding company system that includes a transmitting utility, or an electric utility company, with a value
in excess of $10,000,000 without first having secured an order of the Commission authorizing it
to do so.
(3) Upon receipt of an application for such approval the Commission shall give reasonable notice in writing to the Governor and State commission of each of the States in which the physical property affected, or any part thereof, is situated, and to such other persons as it may deem
advisable.
(4) After notice and opportunity for hearing,
the Commission shall approve the proposed disposition, consolidation, acquisition, or change
in control, if it finds that the proposed transaction will be consistent with the public interest, and will not result in cross-subsidization of
a non-utility associate company or the pledge or
encumbrance of utility assets for the benefit of
an associate company, unless the Commission
determines that the cross-subsidization, pledge,
or encumbrance will be consistent with the public interest.
(5) The Commission shall, by rule, adopt procedures for the expeditious consideration of applications for the approval of dispositions, consolidations, or acquisitions, under this section.
Such rules shall identify classes of transactions,
or specify criteria for transactions, that normally meet the standards established in paragraph (4). The Commission shall provide expedited review for such transactions. The Commission shall grant or deny any other application
for approval of a transaction not later than 180
days after the application is filed. If the Commission does not act within 180 days, such application shall be deemed granted unless the Com-

Page 1282

mission finds, based on good cause, that further
consideration is required to determine whether
the proposed transaction meets the standards of
paragraph (4) and issues an order tolling the
time for acting on the application for not more
than 180 days, at the end of which additional period the Commission shall grant or deny the application.
(6) For purposes of this subsection, the terms
‘‘associate company’’, ‘‘holding company’’, and
‘‘holding company system’’ have the meaning
given those terms in the Public Utility Holding
Company Act of 2005 [42 U.S.C. 16451 et seq.].
(b) Orders of Commission
The Commission may grant any application
for an order under this section in whole or in
part and upon such terms and conditions as it
finds necessary or appropriate to secure the
maintenance of adequate service and the coordination in the public interest of facilities subject
to the jurisdiction of the Commission. The Commission may from time to time for good cause
shown make such orders supplemental to any
order made under this section as it may find
necessary or appropriate.
(June 10, 1920, ch. 285, pt. II, § 203, as added Aug.
26, 1935, ch. 687, title II, § 213, 49 Stat. 849; amended Pub. L. 109–58, title XII, § 1289(a), Aug. 8, 2005,
119 Stat. 982.)
REFERENCES IN TEXT
The Public Utility Holding Company Act of 2005, referred to in subsec. (a)(6), is subtitle F of title XII of
Pub. L. 109–58, Aug. 8, 2005, 119 Stat. 972, which is classified principally to part D (§ 16451 et seq.) of subchapter
XII of chapter 149 of Title 42, The Public Health and
Welfare. For complete classification of this Act to the
Code, see Short Title note set out under section 15801
of Title 42 and Tables.
AMENDMENTS
2005—Subsec. (a). Pub. L. 109–58 amended subsec. (a)
generally. Prior to amendment, subsec. (a) read as follows: ‘‘No public utility shall sell, lease, or otherwise
dispose of the whole of its facilities subject to the jurisdiction of the Commission, or any part thereof of a
value in excess of $50,000, or by any means whatsoever,
directly or indirectly, merge or consolidate such facilities or any part thereof with those of any other person,
or purchase, acquire, or take any security of any other
public utility, without first having secured an order of
the Commission authorizing it to do so. Upon application for such approval the Commission shall give reasonable notice in writing to the Governor and State
commission of each of the States in which the physical
property affected, or any part thereof, is situated, and
to such other persons as it may deem advisable. After
notice and opportunity for hearing, if the Commission
finds that the proposed disposition, consolidation, acquisition, or control will be consistent with the public
interest, it shall approve the same.’’
EFFECTIVE DATE OF 2005 AMENDMENT
Pub. L. 109–58, title XII, § 1289(b), (c), Aug. 8, 2005, 119
Stat. 983, provided that:
‘‘(b) EFFECTIVE DATE.—The amendments made by this
section [amending this section] shall take effect 6
months after the date of enactment of this Act [Aug. 8,
2005].
‘‘(c) TRANSITION PROVISION.—The amendments made
by subsection (a) [amending this section] shall not
apply to any application under section 203 of the Federal Power Act (16 U.S.C. 824b) that was filed on or before the date of enactment of this Act [Aug. 8, 2005].’’

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§ 824d

TITLE 16—CONSERVATION

§ 824c. Issuance of securities; assumption of liabilities
(a) Authorization by Commission
No public utility shall issue any security, or
assume any obligation or liability as guarantor,
indorser, surety, or otherwise in respect of any
security of another person, unless and until, and
then only to the extent that, upon application
by the public utility, the Commission by order
authorizes such issue or assumption of liability.
The Commission shall make such order only if it
finds that such issue or assumption (a) is for
some lawful object, within the corporate purposes of the applicant and compatible with the
public interest, which is necessary or appropriate for or consistent with the proper performance by the applicant of service as a public utility and which will not impair its ability to perform that service, and (b) is reasonably necessary or appropriate for such purposes. The provisions of this section shall be effective six
months after August 26, 1935.
(b) Application approval or modification; supplemental orders
The Commission, after opportunity for hearing, may grant any application under this section in whole or in part, and with such modifications and upon such terms and conditions as it
may find necessary or appropriate, and may
from time to time, after opportunity for hearing
and for good cause shown, make such supplemental orders in the premises as it may find
necessary or appropriate, and may by any such
supplemental order modify the provisions of any
previous order as to the particular purposes,
uses, and extent to which, or the conditions
under which, any security so theretofore authorized or the proceeds thereof may be applied, subject always to the requirements of subsection (a)
of this section.
(c) Compliance with order of Commission
No public utility shall, without the consent of
the Commission, apply any security or any proceeds thereof to any purpose not specified in the
Commission’s order, or supplemental order, or
to any purpose in excess of the amount allowed
for such purpose in such order, or otherwise in
contravention of such order.
(d) Authorization of capitalization not to exceed
amount paid
The Commission shall not authorize the capitalization of the right to be a corporation or of
any franchise, permit, or contract for consolidation, merger, or lease in excess of the amount
(exclusive of any tax or annual charge) actually
paid as the consideration for such right, franchise, permit, or contract.
(e) Notes or drafts maturing less than one year
after issuance
Subsection (a) shall not apply to the issue or
renewal of, or assumption of liability on, a note
or draft maturing not more than one year after
the date of such issue, renewal, or assumption of
liability, and aggregating (together with all
other then outstanding notes and drafts of a maturity of one year or less on which such public
utility is primarily or secondarily liable) not

more than 5 per centum of the par value of the
other securities of the public utility then outstanding. In the case of securities having no par
value, the par value for the purpose of this subsection shall be the fair market value as of the
date of issue. Within ten days after any such
issue, renewal, or assumption of liability, the
public utility shall file with the Commission a
certificate of notification, in such form as may
be prescribed by the Commission, setting forth
such matters as the Commission shall by regulation require.
(f) Public utility securities regulated by State not
affected
The provisions of this section shall not extend
to a public utility organized and operating in a
State under the laws of which its security issues
are regulated by a State commission.
(g) Guarantee or obligation on part of United
States
Nothing in this section shall be construed to
imply any guarantee or obligation on the part of
the United States in respect of any securities to
which the provisions of this section relate.
(h) Filing duplicate reports with the Securities
and Exchange Commission
Any public utility whose security issues are
approved by the Commission under this section
may file with the Securities and Exchange Commission duplicate copies of reports filed with the
Federal Power Commission in lieu of the reports, information, and documents required
under sections 77g, 78l, and 78m of title 15.
(June 10, 1920, ch. 285, pt. II, § 204, as added Aug.
26, 1935, ch. 687, title II, § 213, 49 Stat. 850.)
TRANSFER OF FUNCTIONS
Executive and administrative functions of Securities
and Exchange Commission, with certain exceptions,
transferred to Chairman of such Commission, with authority vested in him to authorize their performance
by any officer, employee, or administrative unit under
his jurisdiction, by Reorg. Plan No. 10 of 1950, §§ 1, 2, eff.
May 24, 1950, 15 F.R. 3175, 64 Stat. 1265, set out in the
Appendix to Title 5, Government Organization and Employees.

§ 824d. Rates and charges; schedules; suspension
of new rates; automatic adjustment clauses
(a) Just and reasonable rates
All rates and charges made, demanded, or received by any public utility for or in connection
with the transmission or sale of electric energy
subject to the jurisdiction of the Commission,
and all rules and regulations affecting or pertaining to such rates or charges shall be just and
reasonable, and any such rate or charge that is
not just and reasonable is hereby declared to be
unlawful.
(b) Preference or advantage unlawful
No public utility shall, with respect to any
transmission or sale subject to the jurisdiction
of the Commission, (1) make or grant any undue
preference or advantage to any person or subject
any person to any undue prejudice or disadvantage, or (2) maintain any unreasonable difference in rates, charges, service, facilities, or in
any other respect, either as between localities
or as between classes of service.