Section 96: Purchase, sale, consolidation or merger; procedure; public interest determination
Section 96. (a) For purposes of this section, the following words shall, unless the context clearly requires otherwise, have the following meanings:—
''Control'', the possession of the power, through direct or indirect ownership of a majority of the outstanding voting securities of a gas or electric company or of a holding company thereof, to direct or cause the direction of the management and policies of a gas or electric company or a holding company thereof or the ability to effect a change in the composition of its board of directors or otherwise; provided, however, that control shall not be considered to arise solely from a revocable proxy or consent given to a person in response to a public proxy or consent solicitation made under the applicable rules and regulations of the Securities Exchange Act of 1934 unless a participant in said solicitation has announced an intention to effect a merger or consolidation with, reorganization or other business combination or extraordinary transaction involving such gas or electric company or the holding company.
''Foreign electric company'', an electric company with a domicile, principal place of business, headquarters or place of incorporation outside of the commonwealth, but which may have shared costs with a gas or electric company subject to this chapter that may be allocated by a holding company after an acquisition of control.
''Foreign gas company'', a gas company with a domicile, principal place of business, headquarters or place of incorporation outside of the commonwealth, but which may have shared costs with a gas or electric company subject to this chapter that may be allocated by a holding company after an acquisition of control.
''Holding company'', any corporation, association, partnership, trust or similar organization, or person which, regardless of the locus of the domicile, principal place of business, headquarters or place of incorporation of such entity, either alone or in conjunction and under an arrangement or understanding with 1 or more other corporations, associations, partnerships, trusts or similar organizations, or persons, directly or indirectly, controls, or seeks to acquire control over, and may cause costs to be allocated to a gas or electric company.
''Third party acquirer'', any corporation, association, partnership, trust or similar organization or person that is not under common control with a holding company or companies that are being acquired.
(b) Notwithstanding this chapter or any other general or special law to the contrary, companies, except steam distribution companies, subject to this chapter, or holding companies may consolidate or merge with one another or may sell and convey all or substantially all of their properties to another of such companies. Such companies or holding companies may purchase such properties if: (i) the purchase, sale, consolidation or merger, and the terms thereof, have been approved, at meetings called for the purpose of approving such sale, consolidation or merger, in the case of any contracting company organized under the laws of the commonwealth, by a vote of the holders of at least two-thirds of each class of such company's stock outstanding and entitled to vote on the question, and, in the case of any contracting company organized in a jurisdiction other than the commonwealth, by a vote of the holders of at least that percentage of such company's outstanding stock required for approval of the question under the laws of such jurisdiction; and (ii) that the department, after notice and a public hearing, has determined that such purchase and sale, consolidation or merger, and the terms thereof, are consistent with the public interest. In determining whether a purchase and sale, consolidation or merger is consistent with the public interest, the department shall, at a minimum, consider: potential rate changes, if any; the long term strategies that will assure a reliable, cost effective energy delivery system; any anticipated interruptions in service; or other factors which may negatively impact customer service. The purchase or sale of properties by, or the consolidation or merger of, wholesale generation companies shall not require departmental approval except as otherwise provided in this subsection.
(c) Notwithstanding this chapter or any other general or special law to the contrary, a gas, electric or holding company, subject to this chapter, shall not enter into any transaction or otherwise take any action which would result in a change of its control over any gas, electric or holding company, or foreign gas or electric company unless: (i) the terms thereof, have been approved, at meetings called therefor, in the case of any contracting company organized under the laws of the commonwealth, by a vote of the holders of at least two-thirds of each class of such company's stock outstanding and entitled to vote on the question, and, in the case of any contracting company organized in a jurisdiction other than the commonwealth, by a vote of the holders of at least that percentage of such company's outstanding stock required for approval of the question under the laws of such jurisdiction; and (ii) the department, after notice and a public hearing, has determined that such transaction or action, and the terms thereof, are consistent with the public interest; provided, however, that in making such a determination the department shall, at a minimum, consider: potential rate changes, if any; the long term strategies that will assure a reliable, cost effective energy delivery system; any anticipated interruptions in service; or other factors which may negatively impact customer service.
A holding company may request a waiver of this subsection, on behalf of itself and any foreign electric or gas company directly or indirectly controlled by or under common control with it, by submission to the department of an affidavit, duly executed by a holding company officer, describing the proposed transaction, accompanied with reasonable explanation and documentation, and certifying facts that substantially support a conclusion that the proposed transaction will have no adverse impacts on any electric or gas company subject to the department's jurisdiction, as applicable, or the ratepayers of any such electric or gas company. The department shall have the discretion to waive compliance with this subsection if the department agrees with the conclusion supported by such officer's affidavit; the department shall issue an order granting or denying such waiver request within 45 days following the holding company's submission of the applicable officer's affidavit.
(d) Corporate reorganizations involving holding companies that will not result in the acquisition, directly or indirectly, of control of an electric or gas company subject to this chapter, or of a holding company thereof, by a third party acquirer shall not be subject to this section.
(e) Nothing in this section shall apply to a wholesale generation company.