1.1                          A bill for an act 
  1.2             relating to utilities; regulating certain utility 
  1.3             mergers; providing employees of public utilities 
  1.4             notice of the sale of certain utility assets; 
  1.5             requiring certain reports; amending Minnesota Statutes 
  1.6             1994, sections 216B.09, subdivision 1; 216B.16, 
  1.7             subdivision 6; 216B.50, subdivision 1, and by adding a 
  1.8             subdivision; proposing coding for new law in Minnesota 
  1.9             Statutes, chapter 216B. 
  1.10  BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.11     Section 1.  [216B.043] [SERVICE REPORTS BY LARGE ELECTRIC 
  1.12  UTILITIES.] 
  1.13     Subdivision 1.  [REQUIREMENT.] An electric public utility 
  1.14  that is in the process of merging or has merged with another 
  1.15  company that has or will result in a merged company providing 
  1.16  over 150,000 retail customers within Minnesota with electric 
  1.17  service must annually by June 1 file with the commission a 
  1.18  report summarizing the following information on its electric 
  1.19  generation, transmission, and distribution systems throughout 
  1.20  its service area during the immediately preceding calendar year: 
  1.21     (1) number, duration, and cause of each outage; 
  1.22     (2) number and job classifications of personnel actually 
  1.23  assigned to each outage and personnel available for it; 
  1.24     (3) scheduled maintenance of major equipment; 
  1.25     (4) industry standard for maintenance of major equipment; 
  1.26     (5) minimum number of employees needed for maintenance; 
  1.27     (6) major unscheduled repairs and replacement undertaken; 
  2.1   and 
  2.2      (7) all customer complaints and the public utility's 
  2.3   response to those complaints. 
  2.4      Subd. 2.  [PENALTY.] A public utility that fails to timely 
  2.5   file a report required by subdivision 1 is subject to a fine not 
  2.6   to exceed $25,000 for each failure to be determined and assessed 
  2.7   by the commission. 
  2.8      Sec. 2.  Minnesota Statutes 1994, section 216B.09, 
  2.9   subdivision 1, is amended to read: 
  2.10     Subdivision 1.  [COMMISSION AUTHORITY, GENERALLY.] The 
  2.11  commission, on its own motion or upon complaint and after 
  2.12  reasonable notice and hearing, may ascertain and fix just and 
  2.13  reasonable standards, classifications, rules, or practices to be 
  2.14  observed and followed by any or all public utilities with 
  2.15  respect to the service to be furnished.  In the process of 
  2.16  considering rules related to standards of practice for electric 
  2.17  public utilities, the public utility commission shall, among 
  2.18  other issues, consider the issues of standards of maintenance 
  2.19  and maintenance schedules for major equipment and response times 
  2.20  to outages. 
  2.21     Sec. 3.  Minnesota Statutes 1994, section 216B.16, 
  2.22  subdivision 6, is amended to read: 
  2.23     Subd. 6.  [FACTORS CONSIDERED, GENERALLY.] (a) The 
  2.24  commission, in the exercise of its powers under this chapter to 
  2.25  determine just and reasonable rates for public utilities, shall 
  2.26  give due consideration to: 
  2.27     (1) the public need for adequate, efficient, and reasonable 
  2.28  service; 
  2.29     (2) customer service and satisfaction and equipment 
  2.30  maintenance, quality, and repair standards; and to 
  2.31     (3) the need of the public utility for revenue sufficient 
  2.32  to enable it to meet the cost of furnishing the service, 
  2.33  including adequate provision for depreciation of its utility 
  2.34  property used and useful in rendering service to the public, and 
  2.35  to earn a fair and reasonable return upon the investment in such 
  2.36  property. 
  3.1      (b) In determining the rate base upon which the utility is 
  3.2   to be allowed to earn a fair rate of return, the commission 
  3.3   shall give due consideration to evidence of the cost of the 
  3.4   property when first devoted to public use, to prudent 
  3.5   acquisition cost to the public utility less appropriate 
  3.6   depreciation on each, to construction work in progress, to 
  3.7   offsets in the nature of capital provided by sources other than 
  3.8   the investors, and to other expenses of a capital nature.  For 
  3.9   purposes of determining rate base, the commission shall consider 
  3.10  the original cost of utility property included in the base and 
  3.11  shall make no allowance for its estimated current replacement 
  3.12  value. 
  3.13     Sec. 4.  Minnesota Statutes 1994, section 216B.50, 
  3.14  subdivision 1, is amended to read: 
  3.15     Subdivision 1.  [COMMISSION APPROVAL REQUIRED.] (a) No 
  3.16  public utility shall sell, acquire, lease, or rent any plant as 
  3.17  an operating unit or system in this state for a total 
  3.18  consideration in excess of $100,000, or merge or consolidate 
  3.19  with another public utility operating in this state, without 
  3.20  first being authorized so to do by the commission.  Upon the 
  3.21  filing of an application for the approval and consent of the 
  3.22  commission thereto the commission shall investigate, with or 
  3.23  without public hearing, and in case of a public hearing, upon 
  3.24  such notice as the commission may require, and if it shall find 
  3.25  that the proposed action is consistent with the public interest 
  3.26  it shall give its consent and approval by order in writing.  For 
  3.27  the purpose of considering a merger application, "public 
  3.28  interest" includes the interests of the employees of a public 
  3.29  utility proposing a merger.  In reaching its determination the 
  3.30  commission shall take into consideration the reasonable value of 
  3.31  the property, plant, or securities to be acquired or disposed 
  3.32  of, or merged and consolidated. 
  3.33     (b) The commission may not approve a merger unless, in 
  3.34  addition to any other requirements, it finds that: 
  3.35     (1) the service provided by each public utility proposing 
  3.36  to merge has substantially complied with all applicable service 
  4.1   standards for the previous calendar year; 
  4.2      (2) the merged public utility will employ sufficient 
  4.3   personnel to ensure adequate maintenance, safe operation, and 
  4.4   reliability for its utility operations; and 
  4.5      (3) each public utility proposing to merge is making a good 
  4.6   faith, substantial effort to resolve its customer complaints. 
  4.7      The commission shall, as a condition of its consent and 
  4.8   approval to a merger, require the proposed merged company to 
  4.9   enter into binding commitments obligating the merged company to 
  4.10  maintain minimum levels of investment and staffing needed to 
  4.11  meet the requirements of clause (2).  These commitments are in 
  4.12  addition to any other conditions that the commission may impose. 
  4.13     This paragraph (b) applies only to mergers involving a 
  4.14  public utility that provides electric service to over 150,000 
  4.15  retail customers within Minnesota. 
  4.16     (c) The provisions of this section shall not be construed 
  4.17  as applicable to the purchase of units of property for 
  4.18  replacement or to the addition to the plant of the public 
  4.19  utility by construction. 
  4.20     Sec. 5.  Minnesota Statutes 1994, section 216B.50, is 
  4.21  amended by adding a subdivision to read: 
  4.22     Subd. 1a.  [EMPLOYEE NOTICE OF SALE OF PROPERTY.] A public 
  4.23  utility that provides electric service to over 150,000 retail 
  4.24  customers may not enter into a binding agreement to sell a power 
  4.25  plant, service center, or headquarters building, until six 
  4.26  months after notifying its employees of its intent to sell. 
  4.27     Sec. 6.  [EFFECTIVE DATE.] 
  4.28     Section 4 is effective the day following final enactment 
  4.29  and applies to mergers pending or proposed on or after that date.