On July 19, 2018, the Federal Energy Regulatory Commission (“FERC” or the “Commission”) issued a Notice of Proposed Rulemaking (“NOPR”) that would update FERC’s regulations regarding interlocking positions. According to the NOPR, the proposed revisions to parts 45 and 46 of the Commission’s regulations aim to “reflect statutory changes to the circumstances in which an applicant who would otherwise require Commission authorization to hold an interlocking position need not do so.”
In addition to some general clarifications to the existing regulations, the NOPR contained five primary proposed revisions:
- Allow applicants for an interlocking position between a public utility and a “bank, trust company, banking association, or firm that is authorized by law to underwrite or participate in the marketing of public utility securities,” to avoid seeking Commission authorization when: (1) the applicant does not participate in any deliberations or decisions of a public utility regarding the selection of a bank, trust company, banking association, or firm to underwrite or participate in the marketing of securities of the public utility, if he or she serves as an officer or director of a bank, trust company, banking association, or firm that is under consideration in the deliberation process; (2) the bank, trust company, banking association, or firm of which the applicant is an officer or director does not participate in the marketing of the securities of the public utility in which he or she holds the position of officer or director; (3) the public utility of which the applicant serves as an officer or director selects underwriters by competitive procedures; or (4) the issuance of securities of the public utility for which he/she serves or proposes to serve as an officer or director has been approved by all federal and state regulatory agencies having jurisdiction over the issuance.
- Consider late-filed applications for interlocking positions on a case by case basis, as there may be good faith reasons for inadvertently delayed applications. The Commission stated that it expects applicants to be attentive to their obligation to timely file for the required authorizations and stipulated that in cases where occasional errors and oversights occur, “the Commission expects that those errors and oversights will be expeditiously identified and rectified, and applications to hold interlocking director positions promptly filed.”
- Clarify that an applicant does not need to make any supplemental filings to notify FERC of any change in position in the case of a person already authorized to hold interlocks identified in section 45.9(a) of the Commission’s regulations who may assume new or different positions that are still among those identified by § 45.9(a). For example, a promotion within a holding company system would not require an interlock holder to file a notice of change.
- State that applicants do not need to list in their applications those public utilities that do not have officers or directors.
- Recognize that public utilities can now be owned by a natural person, instead of only corporate entities.
Comments will be due 60 days after publication in the Federal Register.
A copy of the NOPR can be found here.