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HomePublic Utilities CodeDiv. 1Pt. 1Ch. 4Art. 5§ 823 Utility Securities And Financing

§ 823 Utility Securities And Financing

Public Utilities Code·California
AI Summary·Official Text·Key Terms·Related Statutes·References
AI SummaryVerified

§ 823 Utility Securities And Financing

Key Takeaways

  • •Public utilities (like electric or water companies) can't use money from selling stocks or bonds for things the commission didn't approve.
  • •They can borrow money with short-term notes (like IOUs) for up to 12 months without asking the commission, but only for the right reasons.
  • •If a utility wants to borrow a lot of short-term money (more than 5% of their total debts), they need the commission's okay.
  • •They can't pay back short-term notes by selling more stocks or bonds without the commission's permission.

Example

A water company wants to borrow $1 million to fix old pipes.

If the company wants to borrow this money for 12 months or less, they can do it without asking the commission, as long as the total short-term loans don’t exceed 5% of their other debts. If they want to borrow more or use the money for something else, they need permission.

AI-generated — May contain errors. Not legal advice. Always verify source.

Official Source
View on CA.gov

§ 823 Utility Securities And Financing

(a) No public utility shall, without the consent of the commission, apply any part of the issue of any stock or stock certificate or other evidence of interest or ownership, or bond, note, or other evidence of indebtedness, or any proceeds thereof, to any purpose not specified in the commission’s order, or to any purpose specified in the order in excess of the amount authorized for such purpose, or issue or dispose thereof on any terms less favorable than those specified in the order, or a modification thereof. (b) A public utility may issue notes, for proper purposes and not in violation of any provision of law, payable at periods of not more than 12 months after the date of issuance of the notes without the consent of the commission. (c) Notwithstanding the provisions of subdivision (b), no public utility as defined in Section 201(e) of the Federal Power Act (49 Stat. 847, 16 U.S.C. 824) shall, without the consent of the commission, issue notes payable at periods of not more than 12 months after the date of issuance of the notes if such notes and all other notes payable at periods of not more than 12 months after the date of issuance of such notes on which such public utility is primarily or secondarily liable would exceed in aggregate amount 5 percent of the par value of the other securities then outstanding. In the case of securities having no par value, the par value for the purposes of this subsection shall be the fair market value as of the date of issue. (d) No note payable at a period of not more than 12 months after the date of issuance of such note shall, in whole or in part, be refunded by any issue of stocks or stock certificates or other evidence of interest or ownership, or of bonds, notes of any term or character, or any other evidence of indebtedness, without the consent of the commission. (Amended by Stats. 1969, Ch. 700.)

Last verified: January 23, 2026

Key Terms

ownershiputilityevidenceissuancecommissionsecuritiesstockfine

Related Statutes

  • § 818 Public Utility Securities Issuance
  • § 825 Public Utility Securities Validity
  • § 826 Public Utility Securities Penalties
  • § 817 Public Utility Financing Purposes
  • § 819 Commission Securities Approval Authority

References

  • Official text at leginfo.legislature.ca.gov
  • California Legislature. Public Utilities Code. Section 823.
View Official Source