Committee approves disclosure requirements for EMC gas-subsidiary transactions

The House Energy, Utilities & Telecommunications Committee voted to advance Senate Bill 256, a measure that requires electric membership corporations (EMCs) to disclose to their members when they pledge more than 15% of utility assets to acquire gas distribution or marketing subsidiaries and to report annually how much gas they purchase for resale.

Sponsor Senator Casa described the measure as a narrowly tailored, negotiated compromise that restores disclosure provisions removed from a prior version of the bill. "All this language does is require those disclosures — that you tell us what percentage of your assets you've pledged to buy gas distribution companies, and you tell your annual cost of gas that you're passing through and reselling," Senator Casa said.

The bill responds to past efforts by some EMCs to increase the share of assets that may be pledged to finance acquisitions. Committee discussion recounted a prior increase that allowed EMCs to pledge up to 25% of assets, and described the current bill as restoring an agreement that required additional member disclosures in exchange for any increased pledge authority. Senator Casa said the core requirement is that within six months of a transaction that pledges more than 15% of assets, the EMC must disclose the assets pledged and the percentage of net utility plant used for acquiring other companies. The bill also adds an annual reporting requirement that committee members said had been negotiated and drafted with input from Georgia EMCs.

Representative Mary Frances Williams, who identified herself as from Cobb County, thanked the sponsor and said transparency was warranted given past problems at one EMC. "Transparency is really something that was not there in the past and is one of the reasons things went the way they did," Williams said.

Committee members asked about enforcement and penalties. In response, Senator Casa said enforcement would likely be private litigation seeking declaratory relief and that membership reaction at board elections would also be a political sanction; he did not cite a specific administrative penalty in the bill text.

Representative Seaball offered the motion to advance the bill; a second was recorded. The committee approved the motion by voice vote; the chair called for ayes and the motion passed. Committee members noted the bill had been the subject of prior negotiations in the Senate and had passed the Senate committee unanimously before arriving in the House committee.

Clarifying details discussed in the committee included that the six-month disclosure trigger applies to transactions that pledge more than 15% of an EMC's assets, that some EMCs have already used the opportunity to operate gas subsidiaries, and that the bill's disclosure language was drafted with input from Georgia EMCs and Gas South. Committee members described the bill as narrowly tailored to EMCs that have pledged large shares of assets, rather than to all utilities in the state.

The committee did not take up proposed broader amendments to extend the disclosure requirement to all electric providers; members said that would be a different policy question and was not part of this bill.