Title 6. Business Structure — Subtitle 1. Financing
Statutes in effect as of October 1, 2026.
Md. Code Ann., Pub. Util. § 6-101 (2026)
Title 6. Business Structure
Subtitle 1. Financing
§ 6–101LinkCopy Citation
(a)
(1)
This subsection:
(i)
applies only to corporations that operate in Maryland; and
(ii)
does not apply to a transaction in which the capital stock of a telephone company is acquired by another entity with a greater than 50% ownership in common with the telephone company.
(2)
Except as provided in paragraph (4) of this subsection, a public service company shall obtain authorization from the Commission before the public service company:
(i)
assumes or guarantees an obligation or liability with respect to stocks, bonds, securities, notes, or other evidence of indebtedness of any person that is payable wholly or partly more than 12 months after the date of the assumption or guarantee;
(ii)
issues stocks, bonds, securities, notes, or other evidence of indebtedness that is payable wholly or partly more than 12 months after the date issued; or
(iii)
lends money to an affiliate, as defined in § 7–501 of this article, at rates or on terms that are significantly more favorable to the affiliate than the rates or terms that are otherwise commercially available to the affiliate.
(3)
An issuance under paragraph (2)(ii) of this subsection shall conform to §§ 6–102 and 6–103 of this subtitle.
(4)
Prior authorization of the Commission is not required for an assumption or guarantee under paragraph (2)(i) of this subsection or an issuance under paragraph (2)(ii) of this subsection made by a gas company, electric company, or telephone company whose gross annual revenues, for the most recent calendar year for which data are available, are less than 3% of the total gross annual revenues of all public service companies in the State during the same calendar year, if the gas company, electric company, or telephone company:
(i)
provides prior written notice to the Commission of the transaction; and
(ii)
obtains approval of the transaction from the entity in another state that regulates the gas company, electric company, or telephone company.
(b)
(1)
Subject to the requirements of subsection (c) of this section, the Commission may authorize an act described under subsection (a)(2) of this section if the Commission finds that the act is consistent with the public convenience and necessity.
(2)
Authorization under this subsection does not:
(i)
revive a lapsed franchise, validate an invalid franchise, or add to the powers and privileges in a franchise; or
(ii)
waive a forfeiture.
(c)
(1)
This subsection does not apply to the formation of a holding company by a public service company in a corporate reorganization that involves an exchange of stock of the public service company for stock in the holding company.
(2)
In this subsection, a company controlling a public service company is deemed a public service company of the same class as the controlled public service company.
(3)
Without prior authorization of the Commission, a public service company may not take, hold, or acquire any part of the capital stock of a public service company that:
(i)
operates in Maryland; and
(ii)
is of the same class as the acquiring company.
(4)
(i)
Except as provided in subparagraph (ii) of this paragraph, a stock corporation may not take, hold, or acquire more than 10% of the total capital stock of a public service company that operates in Maryland unless:
(1)
the stock is acquired as collateral security; and
(2)
the Commission approves the acquisition.
(ii)
The Commission may authorize a public service company of the same class to take, hold, or acquire more than 10% of the total capital stock of a public service company that operates in Maryland.
(5)
A public service company may not be a party to a violation of this subsection.
(6)
Notwithstanding paragraph (2) of this subsection, § 6–105 of this subtitle shall apply, and the provisions of this subsection do not apply, to the acquisition, ownership, or disposition of any capital stock or voting securities of a company that controls, directly or indirectly, a gas and electric company.
(7)
Notwithstanding any other provision of this subsection, the Commission may authorize, in accordance with § 6–105 of this subtitle, the taking, holding, or acquiring of all or any part of the capital stock of a gas and electric company that operates in the State by a stock corporation or a public service company that is not of the same class as the gas and electric company.
Md. Code Ann., Pub. Util. § 6-102 (2026)
Title 6. Business Structure
Subtitle 1. Financing
§ 6–102LinkCopy Citation
(a)
This section applies only to public service companies that operate in Maryland.
(b)
The Commission shall authorize a public service company to issue stocks, bonds, securities, notes, or other evidence of indebtedness, payable wholly or partly more than 12 months after the date of issuance, if the Commission finds that the issuance is reasonably required for the public service company to:
(1)
acquire property;
(2)
construct, complete, extend, or improve its facilities;
(3)
discharge or lawfully refund its obligations;
(4)
maintain or improve service; or
(5)
reimburse money, not secured by or obtained from the issuance, that is expended for a purpose described in item (1), (2), or (3) of this subsection within 5 years before the filing of an application with the Commission for the reimbursement.
(c)
(1)
The Commission may authorize a public service company to issue stocks, bonds, securities, notes, or other evidence of indebtedness, payable wholly or partly more than 12 months after the date of issuance, for the public service company to:
(i)
conform the aggregate capitalization of the public service company to the value of its property; or
(ii)
subject to paragraph (2) of this subsection, pay a dividend in shares of the public service company’s own stock.
(2)
An order of the Commission authorizing an issuance under paragraph (1)(ii) of this subsection shall state that:
(i)
concurrently with the issuance, the public service company shall transfer from surplus to capital an amount that the Commission determines under paragraph (3) of this subsection; and
(ii)
a sum equal to the amount to be transferred has been expended from income or other money in the treasury of the public service company not secured by, obtained from, or reimbursed by the issuance of stocks, bonds, notes, or other evidence of indebtedness of the public service company for a purpose described in subsection (b)(1), (2), or (3) of this section.
(3)
The amount that the Commission determines under paragraph (2)(i) of this subsection may not be less than:
(i)
the aggregate par value of the stock whose issuance is to be authorized; or
(ii)
if the stock has no par value, the capital value of the stock.
(d)
(1)
An authorization by the Commission under subsection (b) or (c) of this section shall be by order.
(2)
The order shall specify:
(i)
the amount of the issuance authorized; and
(ii)
the purpose under subsection (b) or (c) of this section for which the issuance is reasonably required.
(e)
(1)
Notwithstanding subsections (b), (c), (d), and (g) of this section, the Commission may approve the issuance of stocks, bonds, securities, notes, or other evidence of indebtedness in connection with the organization of a new public service company by the purchaser of the franchise or property of a public service company sold under judicial proceedings, mortgage, or deed of trust.
(2)
An issuance that the Commission approves under this subsection shall be in the amount that the Commission considers necessary fully to protect the rights and equities of the holders of the securities of the predecessor company.
(f)
A public service company’s application for authorization under this section of long–term debt in excess of $1,000,000 shall include a copy of any restrictive covenant attached to the debt.
(g)
(1)
Except as provided in paragraph (2) of this subsection, this section does not prevent a public service company from issuing, without the prior consent of the Commission, notes that are:
(i)
for proper corporate purposes;
(ii)
not otherwise in violation of the law; and
(iii)
payable at periods totaling not more than 12 months after the date of issuance.
(2)
Except as authorized under subsection (b) or (c) of this section, notes issued under paragraph (1) of this subsection may not be refunded directly or indirectly, wholly or partly, by an evidence of indebtedness running for more than 12 months.
Md. Code Ann., Pub. Util. § 6-103 (2026)
Title 6. Business Structure
Subtitle 1. Financing
§ 6–103LinkCopy Citation
(a)
This section applies only to public service companies that operate in Maryland.
(b)
(1)
A public service company may not:
(i)
capitalize or issue bonds against or as lien on a contract for consolidation, merger, or lease; or
(ii)
except as provided in paragraph (2) of this subsection, capitalize a franchise or the right to own a franchise.
(2)
A public service company may capitalize a franchise or right to own a franchise in an amount not exceeding the amount, exclusive of any tax or annual charge, actually paid to the State or a political subdivision as consideration for the grant of the franchise or right.
(c)
The stated capital, as determined under Title 2, Subtitle 3 of the Corporations and Associations Article, of a public service company formed by a merger or consolidation of corporations may not exceed, solely by virtue of the merger or consolidation, the stated capital of the corporations merged or consolidated plus any additional sum paid in cash.
(d)
(1)
This subsection does not apply to the capitalization of a franchise to be a public service company.
(2)
Notwithstanding any other provision of this article, the Commission may approve the capitalization of tangible and intangible property of:
(i)
a newly chartered public service company; or
(ii)
a public service company organized or reorganized by the purchaser of the franchise and property of its predecessor at a sale under judicial proceedings, mortgage, or deed of trust.
(3)
Capitalization under paragraph (2) of this subsection shall be in the amount and form that the Commission considers reasonably necessary to enable the public service company to obtain the capital necessary to establish itself as a going concern.
Md. Code Ann., Pub. Util. § 6-104 (2026)
Title 6. Business Structure
Subtitle 1. Financing
§ 6–104LinkCopy Citation
Any contract, assignment, transfer, or agreement for transfer or purchase of stock in violation of the provisions of this article is void.
Md. Code Ann., Pub. Util. § 6-105 (2026)
Title 6. Business Structure
Subtitle 1. Financing
§ 6–105LinkCopy Citation
(a)
In this section, “affiliate” has the meaning stated in § 7–501 of this article.
(b)
(1)
The General Assembly finds that:
(i)
existing legislation requires the approval by the Commission of the acquisition by one public service company of another public service company’s stocks and obligations, but does not require the Commission’s approval of these acquisitions by persons not engaged in the public utility business in the State; and
(ii)
an attempt by a person not engaged in the public utility business in the State to acquire the power to exercise any substantial influence over the policies and actions of a public service company that provides electricity or gas in the State could result in harm to the customers of the public service company, including the degradation of utility services, higher rates, weakened financial structure, and diminution of utility assets.
(2)
The General Assembly declares that it is the policy of the State to regulate acquisitions by persons that are not engaged in the public utility business in the State of the power to exercise any substantial influence over the policies and actions of a public service company that provides electricity or gas in the State in order to prevent unnecessary and unwarranted harm to the customers of the public service company.
(c)
This section applies to the acquisition of an electric company, gas and electric company, or a gas company that operates in Maryland.
(d)
(1)
A gas and electric company, at the same time as a filing by the company or within 10 days after receipt by the company, shall provide the Commission with a copy of any document regarding the acquisition of voting securities of the gas and electric company or any company that owns or controls the gas and electric company, filed or received by the company, that is filed with:
(i)
the Securities and Exchange Commission;
(ii)
the Federal Energy Regulatory Commission;
(iii)
the Nuclear Regulatory Commission;
(iv)
the Department of Justice;
(v)
the Federal Trade Commission; or
(vi)
any successor agency.
(2)
The Commission shall provide the gas and electric company with the same confidentiality and other protections provided by the federal agency with which the filing was made.
(e)
(1)
Without prior authorization from the Commission, a person may not acquire, directly or indirectly, the power to exercise any substantial influence over the policies and actions of an electric company, gas and electric company, or gas company, if the person would become an affiliate of the electric company, gas and electric company, or gas company as a result of the acquisition.
(2)
For the purposes of this subsection, a person may not be considered to have acquired, directly or indirectly, the power to exercise any substantial influence over the policies and actions of a gas and electric company if the person:
(i)
after any acquisition of voting interests of a company that owns or controls a gas and electric company, directly or indirectly, owns, controls, or has the right to vote, or direct the voting of, not more than 20% of the outstanding voting interests of a company that owns or controls a gas and electric company; and
(ii)
does not have the right to designate more than 20% of the board of directors or other governing body of a company that owns or controls a gas and electric company.
(3)
Paragraph (2) of this subsection may not be construed to apply to the acquisition of any voting interests of a gas and electric company.
(4)
If a person that acquires voting securities of a company that owns or controls a gas and electric company after the acquisition actually exercises substantial influence over the policies and actions of a gas and electric company, the Commission may order compliance with, and take any actions authorized by, other provisions of this article with respect to the gas and electric company.
(f)
An application for authorization under subsection (e) of this section must include detailed information regarding:
(1)
the applicant’s identity and financial ability;
(2)
the background of the key personnel associated with the applicant;
(3)
the source and amounts of funds or other consideration to be used in the acquisition;
(4)
the applicant’s compliance with federal law in carrying out the acquisition;
(5)
whether the applicant or the key personnel associated with the applicant have violated any State or federal statutes regulating the activities of public service companies;
(6)
all documents relating to the transaction giving rise to the application;
(7)
the applicant’s experience in operating public service companies providing electricity;
(8)
the applicant’s plan for operating the public service company;
(9)
how the acquisition will serve the customers of the public service company in the public interest, convenience, and necessity; and
(10)
any other information that the Commission may specify by regulation or order.
(g)
(1)
The Commission promptly shall:
(i)
examine and investigate each application received under this section; and
(ii)
undertake any proceedings necessary or convenient to review the application in accordance with Title 3 of this article and issue an order concerning the acquisition.
(2)
The Commission shall consider the following factors in considering an acquisition under this section:
(i)
the potential impact of the acquisition on rates and charges paid by customers and on the services and conditions of operation of the public service company;
(ii)
the potential impact of the acquisition on continuing investment needs for the maintenance of utility services, plant, and related infrastructure;
(iii)
the proposed capital structure that will result from the acquisition, including allocation of earnings from the public service company;
(iv)
the potential effects on employment by the public service company;
(v)
the projected allocation of any savings that are expected to the public service company between stockholders and rate payers;
(vi)
issues of reliability, quality of service, and quality of customer service;
(vii)
the potential impact of the acquisition on community investment;
(viii)
affiliate and cross–subsidization issues;
(ix)
the use or pledge of utility assets for the benefit of an affiliate;
(x)
jurisdictional and choice–of–law issues;
(xi)
whether it is necessary to revise the Commission’s ring fencing and code of conduct regulations in light of the acquisition; and
(xii)
any other issues the Commission considers relevant to the assessment of acquisition in relation to the public interest, convenience, and necessity.
(3)
(i)
If the Commission finds that the acquisition is consistent with the public interest, convenience, and necessity, including benefits and no harm to consumers, the Commission shall issue an order granting the application.
(ii)
The Commission may condition an order authorizing the acquisition on the applicant’s satisfactory performance or adherence to specific requirements.
(4)
If the Commission does not find that the acquisition is consistent with the public interest, convenience, and necessity, including benefits and no harm to consumers, the Commission shall issue an order denying the application.
(5)
The applicant bears the burden of showing that granting the acquisition is consistent with the public interest, convenience, and necessity, including benefits and no harm to consumers.
(6)
(i)
Except as provided in subparagraph (ii) of this paragraph, the Commission shall issue an order with respect to the application no later than 180 days after the filing of the application for authorization.
(ii)
Unless the Commission finds, based on good cause, that the 180–day period should be extended for an additional 45 days, failure of the Commission to issue an order within the 180–day period shall be considered to be an approval of the acquisition by the Commission.
(h)
Nothing in this section prohibits dissemination by any party of information concerning the acquisition if the dissemination does not otherwise conflict with federal or State law.
Md. Code Ann., Pub. Util. § 6-106 (2026)
Title 6. Business Structure
Subtitle 1. Financing
§ 6–106LinkCopy Citation
(a)
(1)
In this section the following words have the meanings indicated.
(2)
“Affiliate” has the meaning stated in § 7–501 of this article.
(3)
“Investor–owned electric company” means an electric company that is not a municipal electric utility or an electric cooperative.
(b)
For purposes of this section, a person is considered to have acquired, directly or indirectly, the power to exercise substantial influence over the policies or actions of an investor–owned electric company if the person:
(1)
after any acquisition of voting interests, directly or indirectly owns, controls, or has the right to vote, or direct the voting of, at least 20% of the voting interests of the investor–owned electric company or an entity that owns or controls the investor–owned electric company;
(2)
has the right to designate at least 20% of the board of directors or other governing body of the investor–owned electric company or an entity that owns or controls the investor–owned electric company; or
(3)
is found by the Commission, directly or indirectly, or through one or more intermediaries, to have substantial influence over the policies or actions of an investor–owned electric company.
(c)
A person may not acquire, directly or indirectly, the power to exercise substantial influence over the policies or actions of an investor–owned electric company if the person would become an affiliate of each investor–owned electric company in the State as a result of the acquisition.
(d)
The Commission may adopt regulations to implement this section.