8
business activities. The activities not reported generally consisted of those in which the
EMC had an ownership interest of less than 10%.
The Public Staff contacted the EMCs that had either failed to file a report or had
filed a report that was incomplete. Discussions with these EMCs revealed that the basic
reason for the incomplete reporting was a belief that no report was required if an EMC
held no investments equal to 10% or greater. The Public Staff informed the EMCs that
it believed Rule R19-1 required them to report information regarding all separate
business entities, even if the ownership interest in such entities was less than 10%.
Each of the EMCs that were contacted filed or re-filed the affected pages of its 2000
annual transaction report by the spring of 2002.
Based on its discussions with the EMCs and review of the annual transaction
report form, the Public Staff concluded that it might be appropriate to clarify the report
form. The Public Staff filed a motion on February 14, 2002, asking for two relatively
minor changes to the report form. The Public Staff asserted that its proposal would not
change the content of the report required by the Commission, but would instead clarify
the form and lead to better reporting by the EMCs. The Commission granted the Public
Staff’s motion and amended the annual transaction report form as of March 8, 2002.
When the annual transaction reports for 2001 were filed, the Public Staff
performed a similar review of the sufficiency of the filings. While some issues with
individual EMCs remain, overall the sufficiency of filings was improved in comparison
with the filings for 2000. The reports for calendar year 2002 were due by May 1, 2003,
and these reports are currently being processed and reviewed for sufficiency by the
Public Staff.
During 2002, the Public Staff sent requests for information to several EMCs
regarding the contents of the 2000 and 2001 annual transaction reports. For this first
round of information requests, the Public Staff concentrated on those EMCs that were
conducting active separate business activities through affiliates and were allocating
costs to those affiliates. The EMCs contacted were responsive to the Public Staff’s
information requests, in certain cases providing large amounts of additional data.
Review and follow-up of the information received from these EMCs began in 2002 and
will continue in 2003, along with the gathering of information related to the 2002 annual
transaction reports filed in 2003.
Appendix D to this report is a schedule for the year 2002 setting forth each of the
EMCs that made reports or statements pursuant to Commission Rule R19-1 and
indicating whether each was engaged in separate business activities as described in
G.S. 117-18.1. As can be seen on this schedule, 26 EMCs were engaged in separate
business activities as described in G.S. 117-18.1 and 7 EMCs were not engaged in
such activities. The EMCs actively engaged in separate business activities are involved
in several different types of operations. According to the latest reports filed with the
Commission, four EMCs are actively operating businesses that involve the sale of
gasoline, propane, and/or other petroleum products. However, approximately 20 EMCs