dissenting.
I dissent from the Majority because the Indiana Utility Regulatory Commission does have jurisdiction to approve or disapprove the proposed corporate reorganization. The issue before this Court should be stated as follows:
Whether a proposed corporate reorganization to form a holding company which may require the transfer of stock and the encumbrance of a utility's franchise triggers the jurisdiction of the Indiana Utility Regulatory Commission under I.C. 8-1-2-8387
The statute, I.C. 8-1-2-83, provides that no public utility shall transfer or encumber its franchise, works, or system to any corporation without the approval of the commission. The proposal is a transfer of stock to a holding company which could drastically affect rates and capital The statute does not require an investigation for the purpose of making more regulations, but it does require approval by the Commission.
One contention offered by the Appellees in opposition to the jurisdiction of the Commission is that there is nothing before the Commission because NIPSCO has not sought or petitioned for approval. This is a specious contention that should not be taken seriously. On page 5, footnote 2 of Appellee's Brief, it is conceded that "NIP-SCO has previously relied on the FERC's statutory obligation to serve a copy of NIP-SCO's application on the Indiana Commission. 16 U.S.C. See. 824b(a)."
In an order issued by the Federal Energy Regulatory Commission, dated February 29, 1988, on page 321 of the Record, NIP-SCO denies the necessity of notice to or the jurisdiction of the Indiana Commission. At page 322 of the Record, the last two lines of the third paragraph the order states: "Northern Indiana also denies that state approval is required for its proposed restructuring." If this is a sound position, it seems quite senseless to send the Commission notice as NIPSCO suggests in footnote 2 of its Brief. Clearly, the intent of the statute is to permit a review of a business decision which adversely affects con*960sumer rates and the capital structure of a utility. -
1.C. 8-1-2-49 provides:
The commission shall have jurisdiction over holders of the voting capital stock of all public utility companies under its jurisdiction to such extent as may be necessary to enable the commission to require the disclosure of the identity in respective interests of every owner of any substantial interest in such voting capital stock. One percent [1%] or more is a substantial interest, within the meaning of this section.
This statute is merely an example of the legislature's intent to have an active, reviewing interest in the operation of utilities which have a monopolistic advantage in the state's economic community. The statutory scheme strikes a balance between a fair return to the utility and reasonably fair rates to the consumer. I.C. 8-1-2-83 is just another example of the Commission's jurisdictional opportunities to protect the consumer public from unwise business schemes and efforts to avoid the regulatory schemes carefully orchestrated by the legislature. ‘
The Public Utility Holding Company Act of 1985 sets forth the federal policy with regard to holding companies and is instructive:
. it is declared to be the policy of this chapter, in accordance with which policy all the provisions of this chapter shall be interpreted, to meet the problems and eliminate the evils as enumerated in this section, connected with public-utility holding companies which are engaged in interstate commerce or in activities which directly affect or burden interstate commerce;
15 U.S.C. § 7Qa(c).
Some of the evils of public utility holding companies enumerated in 15 U.S.C. § TQa(b) are:
(1) when such investors cannot obtain the information necessary to appraise the financial position or earning power of the issuers, because of the absence of uniform standard accounts; when such securities are issued without the approval or consent of the States having jurisdiction over subsidiary public-utility companies; when such securities are issued upon the basis of fictitious or unsound asset values having no fair relation to the sums invested in or the earning capacity of the properties and upon the basis of paper profits from intercompany transactions, or in anticipation of excessive revenues from subsidiary public-utility companies; when such securities are issued by a subsidiary public-utility company under cireumstances which subject such company to the burden of supporting an overcapitalized structure and tend to prevent voluntary rate reductions;
(2) when subsidiary public-utility companies are subjected to excessive charges for services, construction work, equipment, and materials, or enter into transactions in which evils result from an absence of arm's-length bargaining or from restraint of free and independent competition; when service, management, construction, and other contracts involve the allocation of charges among subsidiary public-utility companies in different States so as to present problems of regulation which cannot be dealt with effectively by the States;
(8) when control of subsidiary public-utility companies affects the accounting practices and rate, dividend, and other policies of such companies so as to complicate and obstruct State regulation of such companies, or when control of such companies is exerted through disproportionately small investment;
(4) when the growth and extension of holding companies bears no relation to economy of management and operation or the integration and coordination of related operating properties; or
(5) when in any other respect there is lack of economy of management and operation of public-utility companies or lack of efficiency and adequacy of service rendered by such companies, or lack of effective public regulation, or lack of economies in the raising of capital.
For the above reasons and many others that this writer could set forth, the Indiana *961Utility Regulatory Commission needs to approve any proposed reorganization plan to form a holding company. The Indiana Legislature recognized this need when it enact ed I.C. 8-1-2-83 and gave the Commission jurisdiction to review reorganization proposals.