FERC Ends Requirement For Jurisdictional Retail Suppliers To Seek Approval For Mergers Valued Under $10 Million, Notice Still Required
Declines Retail Supplier's Request To Adopt Blanket Authorization For Persons Holding Interlocking Positions At Affiliated Companies
February 22, 2019 Email This Story Copyright 2010-19 EnergyChoiceMatters.com
Reporting by Paul Ring • email@example.com
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FERC issued a final order adopting revisions to its rules concerning the mergers of FERC-jurisdictional public utilities, due to recent statutory changes (Docket No. RM19-4)
Any retail supplier with market-based rate (MBR) authority from FERC falls within the definition of public utility, and therefore is subject to the FERC merger rules. Typically, any retail supplier acting as an LSE in a FERC-jurisdictional RTO required MBR authority due to the need to engage in balancing transactions
Under the final rule changes, public utilities are only required to seek FERC approval for a merger if the facilities involved in the transaction are valued at more than $10 million. Current rules already establish a $10 million threshold for transactions involving a sale or purchase, but the language regarding merger had no threshold previously
Under the final rule changes, public utilities shall notify FERC of mergers or consolidations if the facilities are valued at more than $1 million but less than $10 million
In a separate docket (RM18-15), FERC addressed issues related to the authorization of interlocking officers and directors at FERC-jurisdictional public utilities
Notably, FERC declined to grant blanket authorizations related to interlocking officers and directors to public utilities that are not franchised utilities and are not affiliated with a franchised utility, and do not have captive customers.
In comments to FERC, Just Energy had asked that FERC grant such blanket authorizations. Under Just Energy’s proposal, officers and directors of such public utilities and their affiliates would have not been required to seek prior authorization, but would disclose all appointments and changes on their annual Form No. 561
FERC declined to create a blanket authorization for persons holding interlocking positions between affiliated companies without any captive customers, stating that the requirement to seek authorization imposes a minimal burden, and that commenters have not made a sufficient
case for granting their requested relief of a blanket authorization.
FERC did grant a clarification sought by Just Energy. Just Energy suggested that, in section 45.9(a)(3) of the relevant regulations, the Commission authorize interlocking positions of an officer or director of more than one public utility where such officer or director is already authorized under this part to hold positions as officer or director of those "or any other public utilities" where the interlock involves affiliated public utilities. FERC adopted Just Energy's recommended language