N.J. Admin. Code § 14:4-4.6

Current through Register Vol. 56, No. 19, October 7, 2024

Section 14:4-4.6 - Structural separation

(a) Commencing October 6, 2009, an electric or gas public utility, having a board of directors comprised of more than one director, shall file all of the following in its annual report with the Board:

1. An annual certification stating that at least 40 percent of the electric or gas public utility's board of directors satisfy separately the board of directors New Jersey qualification and board of directors independence qualification;

2. The name of each director that satisfies the board of directors independence qualification and/or the board of directors New Jersey qualification, and a description of how the director so satisfies the board of directors New Jersey qualification (a preexisting director, as defined at N.J.A.C. 14:4-4A.2, shall be considered in compliance with the board of directors independence qualification and the board of directors New Jersey qualification for purposes of determining the requirements of this section); and

3. A certification, if the board of directors independence qualification and/or board of directors New Jersey qualification is not satisfied, stating that it was unable to comply with such requirements in good faith and an explanation for the inability to comply with such requirement(s).

(b) An electric or gas public utility shall maintain a distinct corporate identity, as evidenced by a separate corporate credit rating or a separate credit rating for its outstanding securities with a nationally recognized statistical rating organization (NRSRO). For an electric or gas public utility without outstanding securities, the requirement to maintain a separate credit rating shall apply only to the extent that a NRSRO provides or has provided a credit rating of such utility without outstanding securities.

(c) If an electric or gas public utility or its public utility holding company regularly subscribes to the publications of an NRSRO, corporate governance rating agency, or investment banking firm, and the NRSRO, corporate governance rating agency, or investment banking firm releases a report or article that addresses the electric or gas public utility or its public utility holding company, the electric or gas public utility shall submit the report to the Board and/or Board staff. The report or article shall be provided electronically to the Office of the Chief Economist within five business days after the electric or gas public utility or its holding company receives or becomes aware of the report.

(d) If the senior secured credit rating for the outstanding publicly-held securities of an electric or gas public utility, or the senior unsecured credit rating for its public utility holding company, is downgraded after April 6, 2009, to one notch above the speculative grade of any applicable NRSRO (for example, BBB- for Standard & Poor's (S&P) or Baa3 for Moody's Investors Services (Moody's) or lower), the electric or gas public utility shall do both of the following:

1. Within five business days after the downgrade, notify the Office of the Chief Economist and Division of Energy; and

2. Within 30 calendar days after the downgrade, analyze the cost impact of the downgrade on the electric or gas public utility, and if there is a cost impact, submit to the Office of the Chief Economist and Division of Energy a detailed explanation of how the public utility holding company will seek to prevent the credit rating from falling below the then present level.

N.J. Admin. Code § 14:4-4.6

New Rule, R.2009 d.110, effective 4/6/2009.
See: 40 N.J.R. 1616(a), 41 N.J.R. 1500(a).
Recodified from N.J.A.C. 14:4-4A.6 by R.2012 d.091, effective 5/7/2012.
See: 43 N.J.R. 1150(a), 44 N.J.R. 1534(a).