Under existing law, the Public Utilities Commission has regulatory authority over public utilities, including telephone corporations, and authorizes the commission to fix the rates and charges for every public utility. The existing Public Utilities Act regulates stock and security transactions by public utilities, and prohibits a public utility from issuing stocks and stock certificates, or other evidence of interest or ownership, or bonds, notes, or other evidences of indebtedness payable at periods of more than 12 months, without first securing authorization to do so from the commission. The act exempts from the stock and security transaction provisions, with certain exceptions, persons delivering commodities for or to public utilities or municipal or other public corporations primarily for resale or use in serving the public or any portion of the public. The act authorizes the commission, by order or rule, to exempt any public utility or class of public utility from the stock and security transaction provisions if the commission finds that application of those provisions is not in the public interest.

This bill would provide that a telephone corporation that is not regulated under a rate-of-return regulatory structure, as defined, is exempt from the stock and security transaction provisions, but authorizes the commission to impose any stock and security transaction requirement if the commission finds, in a proceeding in which the telephone corporation is or may become a party, that application of the requirement is required by the public interest. A telephone corporation that is also an electrical corporation or a gas corporation would not be exempt from the stock and security transaction provisions unless the commission, by order or rule, exempts the telephone corporation upon finding that application of the stock and security transaction provisions to the telephone corporation is not in the public interest.