On September 27, 2017, U.S. Senators Jim Inhofe (R-Okla.) and Martin Heinrich (D-N.M.) introduced Senate Bill 1860: A bill to amend section 203 of the Federal Power Act (the “FPA”). The legislation, dubbed “The Parity Across Reviews Act” (the “Act”), would amend section 203(a)(1)(B) to add a $10 million threshold to the requirement to seek FERC approval prior to a public utility acquiring FERC-jurisdictional facilities. Additionally, for transactions with a value greater than $1 million, but less than the newly-proposed $10 million threshold, the Act requires FERC to promulgate a rule, within 180 days of the enactment of the Act, that would require a public utility to notify FERC within 30 days of consummating such an acquisition.
Under section 203 of the FPA, public utilities subject to FERC’s jurisdiction must seek FERC’s prior approval before engaging in certain transactions, including those involving the sale and purchase of jurisdictional assets. As it currently exists, section 203 only requires a public utility selling jurisdictional assets to request prior FERC approval if the transaction is in excess of $10 million. However, a public utility who purchases jurisdictional assets, or in the parlance of the statute, who “merges” or “consolidates” its facilities with the facilities of another entity, must request prior approval from FERC irrespective of the transaction value. By adding a $10 million threshold to section 203(a)(1)(B), the Act would resolve this internal inconsistency with regard to the two sides of such a transaction.
The legislation is identical to H.R. 1109, which was approved by the House of Representatives on June 21, 2017 (see June 21, 2017 edition of the WER). Introducing the bill, Senator Inhofe explained that through the Act, “[by] holding all energy transactions to the same standard, we can empower FERC to operate more efficiently and eliminate burdensome requirements—saving consumers money. I look forward to working with Senator Heinrich to pass this legislation swiftly.”
The Act will be considered before the Senate Committee on Energy and Natural Resources Subcommittee on Energy on Wednesday, October 3, 2017. The text of the Act is available here.