On November 15, 2018, FERC issued a Notice of Proposed Rulemaking (“NOPR”) to implement Public Law No. 115-247, which amended section 203 of the Federal Power Act (“FPA”) to clarify that FERC authorization is only required for mergers or consolidations valued at more than $10 million. In addition, in accordance with the new law’s requirements, FERC proposes that transactions that are valued at $10 million or less, but more than $1 million, would only be subject to a notification requirement.
Prior to Public Law No. 115-247, FERC interpreted FPA section 203(a)(1)(B) to require public utilities to apply for FERC’s authorization prior to any merger or consolidation of jurisdictional facilities, even if the value of the transaction was nominal. On September 28, 2018, President Trump signed Public Law No. 115-247 into law (see October 9, 2018 edition of the WER). The primary effect of the law is to establish a $10 million threshold for public utilities seeking to merge or consolidate their facilities under FPA section 203(a)(1)(B). This essentially means that parties to transactions with a value of more than $10 million will necessarily have to seek approval from FERC before consummating the transaction. The law also establishes a notification requirement whereby public utilities that are parties to transactions that are valued at $10 million or less, but greater than $1 million, will merely have to inform FERC of such a transaction within 30 days after the transaction has closed.
In the NOPR, FERC proposes to amend Part 33 of its regulations to establish a $10 million threshold for public utilities seeking authority to merge or consolidate FERC-jurisdictional facilities. In addition, FERC proposes to require public utilities to notify FERC of mergers or consolidations that are valued at $10 million or less, but more than $1 million, within 30 days of the consummation of the transaction. FERC proposes that such notifications should include narrative information about the transaction, such as the consideration for the transaction and the effect of the transaction on the ownership of certain jurisdictional facilities. FERC states that the notification requirement would be useful in “collect[ing] information about the transaction should a question arise related to the underlying facilities and the Commission’s oversight under the [FPA].”
Comments on FERC’s NOPR are due 30 days after publication in the Federal Register.
A copy of FERC’s NOPR can be found here.