Section 701.5 Of Article 1. Generally From California Public Utilities Code >> Division 1. >> Part 1. >> Chapter 4. >> Article 1.
701.5
. With respect to financing arrangements which are established
after January 1, 1988, no electrical, gas, or telephone corporation,
whose rates are set by the commission on a cost-of-service basis,
shall issue any bond, note, lien, guarantee, or indebtedness of any
kind pledging the utility assets or credit for or on behalf of any
subsidiary or affiliate of, or corporation holding a controlling
interest in, the electrical, gas, or telephone corporation. The
commission may, however, authorize an electrical, gas, or telephone
corporation to issue any bond, note, lien, guarantee, or indebtedness
pledging the utility assets or credits as follows:
(a) For or on behalf of a subsidiary if its revenues and expenses
are included by the commission in establishing rates for the
electrical, gas, or telephone corporation.
(b) For or on behalf of a subsidiary if it is engaged in a
regulated public utility business in this state or in any other
state.
(c) For or on behalf of a subsidiary or affiliate if it engages in
activities which support the electric, gas, or telephone corporation
in its operations or service, these activities are, or will be,
regulated either by the commission or a comparable federal agency,
and the issuance of the bond, note, lien, guarantee, or indebtedness
is specifically approved in advance by the commission.
The commission shall not approve the bond, note, lien, guarantee,
or indebtedness unless the commission finds and determines that the
proposed financing will benefit the interests of the utility and its
ratepayers.