Current through Register Vol. 54, No. 38, September 21, 2024
(a)
Pro forma transactions. The following transactions of an
applicant not involving a change in conditions of service or rates that seek
Commission approval for acquisition, merger, stock sales or transfers, transfer
of assets or transfer of control of an applicant require notification to the
Commission and approval by the Commission as a pro forma transaction:
(1) A transaction resulting in the transfer
of less than 20% of the assets of an applicant.
(2) A transaction resulting in the transfer
of less than 20% of the direct or indirect control of an applicant.
(3) A transaction requiring a certificate of
public convenience issued under
66 Pa.C.S. §
1102(a) (relating to
enumeration of acts requiring certificate).
(4) A transaction subject to evaluation under
the statement of policy on transfer of control, §
69.901 (relating to utility stock
transfer under
66 Pa.C.S. §
1102(a)(3)).
(5) A transaction that transfers the customer
base of an applicant and does not involve a change in conditions of service or
rates.
(6) A transaction subjected
to this subchapter by decision of the Commission, including a pro forma
transaction no longer classified as a pro forma transaction by the
Commission.
(b)
Reclassification of a pro forma transaction. When an applicant
seeks review and approval of a transaction as a pro forma transaction and the
Commission reclassifies the pro forma transaction, the Commission will notify
the applicant of the reclassification by notice published in the
Pennsylvania Bulletin. An applicant may file a challenge to
the reclassification during the protest period established by the notice. If a
formal protest or complaint to the transaction is filed, the challenge will be
reviewed as part of a traditional rule review proceeding. If no formal protest
or complaint to the transaction is filed, the challenge will be reviewed by the
Commission as part of the review of the transaction.
(c)
Notification requirements for pro
forma transactions. Notification of a pro forma transaction shall be
filed with the Commission on the date of filing with a Federal regulatory
agency seeking Federal approval of a pro forma transaction or no later than 30
days prior to the closing of a pro forma transaction subject to this
subchapter, whichever is longer. The applicant filing the notification shall
comply with the Commission's rules of practice and procedure governing
applications. The applicant shall clearly state that the application is a pro
forma transaction and provide a copy of the application to the Commission and
the statutory advocates. An applicant shall provide an updated copy of any
subsequent filings to the Commission and the statutory advocates in the
following circumstances:
(1) Filing with the
Federal Communications Commission (FCC) of an application seeking approval of
the transaction (FCC application).
(2) Filing of a notice with the United States
Department of Justice (U.S. DOJ) pursuant to the Hart-Scott-Rodino Antitrust
Improvements Act (15
U.S.C.A. §
§
15c-15h,
18a and
66) (HSR Filing).
(3) Filing by an applicant of a pleading
responding to a formal or informal complaint, investigation, or proceeding
undertaken by the FCC or the U.S. DOJ or other State or Federal regulatory
agency involving the transaction.
(4) Filing required by the Commission from an
applicant in response to a notification by the Commission that simultaneous
notification is appropriate to protect the public interest.
(5) Filing required by the Commission from an
applicant in response to a request by any of the following:
(i) A request by a statutory
advocate.
(ii) A request by a
carrier with a certificate of public convenience obtained under
66 Pa.C.S. §
1102(a) for a
copy.
(iii) A request by the
Commission or staff for a copy.
(iv) A request by a person or party for a
copy.
(d)
Content of notification for pro forma transactions. In
addition to the information required under §
5.12 (relating to contents of
applications) of the Commission's rules of practice and procedure, a pro forma
transaction must contain the following information:
(1) The name, address and telephone number of
each party or applicant to the transaction.
(2) The government, state or territory under
the laws of which each corporate or partnership applicant to the transaction is
organized.
(3) The name, title,
post office address and telephone number of the officer or contact point,
including Pennsylvania legal counsel in this Commonwealth, to whom
correspondence concerning the transaction is to be addressed.
(4) The name, address, citizenship and
principal place of business of any person, party or entity that directly or
indirectly owns more than 20% of the equity of the applicant, and the
percentage of equity owned by each of those entities (to the nearest
1%).
(5) A summary description of
the transaction.
(6) A summary of
the services and the service territories in this Commonwealth that will be
affected by the transaction.
(7) A
verified statement as to how the transaction fits into one or more of the
categories subject to the pro forma rule.
(8) Identification of other transactions
related to the transaction.
(9) A
verified statement whether the transaction warrants special consideration
because either party to the transaction is facing imminent business
failure.
(10) Identification of a
separately filed waiver request sought in conjunction with the
transaction.
(11) A verified
statement of facts and allegations establishing:
(i) For a merger or similar transaction, how
the transaction will affirmatively promote the service, accommodation,
convenience, or safety of the public in some substantial way as required by
State law.
(ii) Findings that
approval for a transaction subject to
66 Pa.C.S. §
1103(a) (relating to
procedure to obtain certificates of public convenience) is necessary or proper
for the service, accommodation, convenience, or safety of the public.
(iii) The impact of the transaction on
competition.
(12) A
verified statement affirming that the applicant is in compliance with
Commission obligations and filings and a listing of all State and Federal
proceedings when:
(i) Within the 3-year
period prior to filing the application, the applicant was found to have
violated either State or Federal requirements.
(ii) Within the 3-year period prior to filing
the application, the applicant is alleged to have violated either State or
Federal requirements.
(13) A verified statement affirming that
customers received prior notice. Notice shall be accomplished using a notice
approved by the Commission's Bureau of Consumer Services (BCS). Any
disagreement between the applicant and BCS shall be addressed by an appeal from
an action of staff mirroring §
5.44 (relating to petitions for
appeal from actions of the staff) of the Commission's rules of practice and
procedure.
(14) A verified
statement containing a copy of any Commonwealth utility certificates held by
the applicant.
(15) A verified
statement on the effect of the transaction on existing Commonwealth tariffs. If
applicable or in response to a request from staff, an applicant shall provide a
red-line document identifying changes in existing Commonwealth tariffs before
and after the transaction for which the applicant seeks approval from the
Commission.
(16) A verified
statement on the transaction's effect on the existing affiliate interest
agreements of the applicant.
(17) A
verified statement establishing that no State or Federal regulatory agency is
expected to undertake an informal or formal investigation, complaint or
proceeding relating to the transaction.
(18) Organizational charts showing the effect
on the applicant's organization before and after the transaction.
(19) A copy of the application filed at the
FCC or a notice filed with the U.S. DOJ, if any, including the electronic
location on the agency's web site.
(20) A verified statement setting forth the
expected public effect of the transaction on the capital structure of the
applicant over the next 5 years.
(21) For an applicant subject to a broadband
deployment commitment under Federal or State law, a verified statement
affirming that the applicant is in compliance with that commitment.
(22) For an applicant with eligible
telecommunications carrier status under Federal and State law, a verified
statement affirming that the applicant is in compliance with the law and that
the applicant will continue to be in compliance with the law.
(23) A verified statement affirming that the
transaction complies with the prohibition against cross-subsidization imposed
under Federal and State law.
(e)
Continuing obligations for
notification of pro forma transactions. When a Commission or Federal
proceeding related to a transaction that is the subject of the pro forma
transaction is pending, the applicant seeking approval of a pro forma
transaction shall file with the Commission and provide to the statutory
advocates copies of all procedural motions, public responses to discovery, and
orders or other actions addressing or terminating the proceeding. The applicant
shall supplement the application with any FCC or U.S. DOJ public notice issued
concerning the transaction.
(f)
Commission publication and reclassification of pro forma
transactions.
(1) The Secretary will
publish notice of a pro forma transaction in the Pennsylvania
Bulletin. The Secretary may post notice of the pro forma transaction
on the Commission's web site.
(2) A
notice will contain a 15-day formal protest period established under §
5.14(d) (relating
to applications requiring notice) of the Commission's rules of practice and
procedure. A formal protest or complaint shall constitute a formal protest
under §
5.14 of the Commission's rules of
practice and procedure and shall subject the transaction to traditional rule
review.
(g)
Applicant notice to customers.
(1)
Pro forma transactions with no
change in conditions of service or rates. An applicant shall prepare
and distribute prior notice to the customers of a pro forma transaction
involving no change in conditions of service or rates with the approval of the
BCS. Any disagreement between the applicant and BCS shall be addressed by an
appeal from an action of staff mirroring §
5.44 of the Commission's rules of
practice and procedure.
(2)
Transfers of customer base subject to the pro forma rule.
(i) A transaction transferring a customer
base involving no change in conditions of service or rates shall require prior
notice to the customer base prepared with the approval of the BCS. Any
disagreement between the applicant and BCS shall be addressed by an appeal from
an action of staff mirroring §
5.44 of the Commission's rules of
practice and procedure.
(ii) A
timely formal protest or complaint to the transfer of a customer base involving
no change in conditions of service or rates shall constitute a formal protest
under §
5.14 of the Commission's rules of
practice and procedure.
(h)
Commission review of pro forma
transactions. The Commission retains the discretion to make inquiries
and, after notice and opportunity to be heard, take action to protect the
public interest, including:
(1) For a merger
or similar transaction, ensuring that the transaction will affirmatively
promote the service, accommodation, convenience, or safety of the public in
some substantial way as required by State law.
(2) Findings that a transaction subject to
66 Pa.C.S. §
1103(a) is necessary or
proper for the service, accommodation, convenience, or safety of the
public.
(3) Addressing the impact
of the transaction on competition.
(4) The imposition of conditions on approval
of the transaction when deemed necessary or proper under
66 Pa.C.S. §
1103.
(i)
Formal protests and complaints to
a pro forma transaction. A protest filed to a pro forma transaction
must comply with the Commission's rules of practice and procedure.
(j)
Reclassification of a
transaction. The Commission will reclassify an application for
approval of a pro forma transaction in the following circumstances:
(1) The filing of a formal protest or
complaint.
(2) The filing involves
an acquisition, merger or other transaction that raises novel or important
issues.
(3) The Commission
determines that reclassification is necessary to protect the public
interest.
(k)
Commission approval for a pro forma transaction. The
Commission will issue a Secretarial letter or order after review of an
unprotested transaction subject to this subchapter determining if the
application is in the public interest and consistent with
66 Pa.C.S. §
§
1102(a) and
1103(a) no later than 30
days after expiration of the protest period established in the public notice in
the Pennsylvania Bulletin.
(1) The Commission will determine for a
merger or similar transaction whether the transaction affirmatively promotes
the service, accommodation, convenience, or safety of the public in some
substantial way.
(2) The Commission
will make findings whether a transaction subject to
66 Pa.C.S. §
1103(a) is necessary for the
service, accommodation, convenience, or safety of the public and state whether
the Commission will issue a certificate of public convenience authorizing the
transaction under
66 Pa.C.S. §
§
1102(a) and
1103.
(3) The Commission will address the impact of
the pro forma transaction on competition.
(4) The Commission will determine whether to
impose conditions deemed necessary or proper under
66 Pa.C.S. §
1103 in
conjunction with a determination to approve a pro forma transaction.
(5) The Commission or staff may extend the
consideration period, reject the filing or transaction, remove a transaction
from the pro forma rule or take other action deemed appropriate to protect the
public interest.
(6) A staff action
will be in writing and inform the applicant of the right of appeal. An appeal
from an action of staff shall be governed by the procedures governing appeals
from an action of staff under §
5.44 of the Commission's rules of
practice and procedure.
(l)
Limitations on pro forma
transactions.
(1)
Bankruptcy
proceedings. Pro forma changes related to bankruptcy remain subject to
§
§
1.61 and
1.62 (relating to matters before
other tribunals) of the Commission's rules of practice and procedure.
(2)
Scope on pro forma
transactions. A pro forma transaction may not operate to permit an
applicant to abandon a condition of service or rate. A pro forma transaction
may not operate to permit an applicant to circumvent an obligation by doing or
refraining from doing anything that an applicant must do or cannot
do.
