2007 Minnesota Statutes

216B.48 RELATIONS WITH AFFILIATED INTEREST.
    Subdivision 1. Definition of affiliated interests. "Affiliated interests" with a public utility
means the following:
(1) every corporation and person owning or holding directly or indirectly five percent or
more of the voting securities of such public utility;
(2) every corporation and person in any chain of successive ownership of five percent or
more of voting securities;
(3) every corporation five percent or more of whose voting securities is owned by any
person or corporation owning five percent or more of the voting securities of such public utility
or by any person or corporation in any such chain of successive ownership of five percent or
more of voting securities;
(4) every person who is an officer or director of such public utility or of any corporation in
any chain of successive ownership of five percent or more of voting securities;
(5) every corporation operating a public utility or a servicing organization for furnishing
supervisory, construction, engineering, accounting, legal, and similar services to utilities, which
has one or more officers or one or more directors in common with the public utility, and every
other corporation which has directors in common with the public utility where the number of the
directors is more than one-third of the total number of the utility's directors;
(6) every corporation or person which the commission may determine as a matter of fact
after investigation and hearing is actually exercising any substantial influence over the policies
and actions of the public utility even though the influence is not based upon stockholding,
stockholders, directors or officers to the extent specified in this section;
(7) every person or corporation who or which the commission may determine as a matter of
fact after investigation and hearing is actually exercising substantial influence over the policies
and actions of the public utility in conjunction with one or more other corporations or persons
with which or whom they are related by ownership or blood relationship or by action in concert
that together they are affiliated with such public utility within the meaning of this section even
though no one of them alone is so affiliated;
(8) every subsidiary of a public utility;
(9) every part of a corporation in which an operating division is a public utility.
    Subd. 2. Construing the term "person." The term "person" as used in subdivision 1 shall
not be construed to exclude trustees, lessees, holders of beneficial equitable interest, voluntary
associations, receivers, and partnerships.
    Subd. 3. Contract between utility and affiliated interest. No contract or arrangement,
including any general or continuing arrangement, providing for the furnishing of management,
supervisory, construction, engineering, accounting, legal, financial, or similar services, and no
contract or arrangement for the purchase, sale, lease, or exchange of any property, right, or thing,
or for the furnishing of any service, property, right, or thing, other than those above enumerated,
made or entered into after January 1, 1975 between a public utility and any affiliated interest as
defined in subdivision 1, clauses (1) to (8), or any arrangement between a public utility and an
affiliated interest as defined in subdivision 1, clause (9), made or entered into after August 1, 1993,
is valid or effective unless and until the contract or arrangement has received the written approval
of the commission. Regular recurring transactions under a general or continuing arrangement
that has been approved by the commission are valid if they are conducted in accordance with the
approved terms and conditions. Every public utility shall file with the commission a verified copy
of the contract or arrangement, or a verified summary of the unwritten contract or arrangement,
and also of all the contracts and arrangements, whether written or unwritten, entered into prior to
January 1, 1975, or, for the purposes of subdivision 1, clause (9), prior to August 1, 1993, and in
force and effect at that time. The commission shall approve the contract or arrangement made or
entered into after that date only if it clearly appears and is established upon investigation that it is
reasonable and consistent with the public interest. No contract or arrangement may receive the
commission's approval unless satisfactory proof is submitted to the commission of the cost to
the affiliated interest of rendering the services or of furnishing the property or service to each
public utility. Proof is satisfactory only if it includes the original or verified copies of the relevant
cost records and other relevant accounts of the affiliated interest, or an abstract or summary
as the commission may deem adequate, properly identified and duly authenticated, provided,
however, that the commission may, where reasonable, approve or disapprove the contracts or
arrangements without the submission of cost records or accounts. The burden of proof to establish
the reasonableness of the contract or arrangement is on the public utility.
    Subd. 4. Contract not exceeding $50,000. The provisions of this section requiring the
written approval of the commission shall not apply to transactions with affiliated interests where
the amount of consideration involved is not in excess of $50,000 or five percent of the capital
equity of the utility whichever is smaller; provided, however, that regularly recurring payments
under a general or continuing arrangement which aggregate a greater annual amount shall not
be broken down into a series of transactions to come within the aforesaid exemption. Such
transactions shall be valid or effective without commission approval under this section. However,
in any proceeding involving the rates or practices of the public utility, the commission may
exclude from the accounts of such public utility any payment or compensation made pursuant
to the transaction unless the public utility shall establish the reasonableness of the payment or
compensation.
    Subd. 5. Applicability to determining rates and costs. In any proceeding, whether upon
the commission's own motion or upon application or complaint, involving the rates or practices
of any public utility, the commission may exclude from the accounts of the public utility any
payment or compensation to an affiliated interest for any services rendered or property or service
furnished, as above described, under existing contracts or arrangements with the affiliated interest
unless the public utility shall establish the reasonableness of the payment or compensation.
    Subd. 6. Commission retains continuing authority over contract. The commission
shall have continuing supervisory control over the terms and conditions of the contracts and
arrangements as are herein described so far as necessary to protect and promote the public
interest. The commission shall have the same jurisdiction over the modifications or amendment
of contracts or arrangements as are herein described as it has over such original contracts or
arrangements. The fact that the commission shall have approved entry into such contracts or
arrangements as described herein shall not preclude disallowance or disapproval of payments
made pursuant thereto, if upon actual experience under such contract or arrangement it appears
that the payments provided for or made were or are unreasonable.
    Subd. 7.[Repealed, 1978 c 795 s 10]
History: 1974 c 429 s 48; 1993 c 327 s 11-13