2000 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 

    HIST: 1974 c 429 s 48; 1993 c 327 s 11-13