On February 21, 2019, FERC issued a final rule (“Order No. 855”) amending Part 33 of its regulations to establish that FERC authorization for mergers or consolidations of a public utility’s jurisdictional facilities is only required when such transactions exceed a $10 million threshold. Order No. 855 also establishes that public utilities are not required to secure FERC authorization for mergers and acquisitions that are valued between $1 million and $10 million – instead they are only required to submit a notification filing. Order No. 855 will become effective 30 days after publication in the Federal Register.
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”). In the NOPR, FERC proposed changes to Part 33 of its regulations to (1) clarify that FERC authorization is only required for mergers or consolidations valued at more than $10 million and (2) establish a notification requirement for transactions valued between $1 million and $10 million (see November 20, 2018 edition of the WER). In such notification filings, FERC proposed that the public utilities be required to file: (1) the exact name and principal address of the public utility, and (2) a narrative description of the transaction, including the identity of all parties involved and all jurisdictional facilities associated with or affected by the transaction, the location of such jurisdictional facilities, the date on which the transaction was consummated, the consideration for the transaction, and the effect of the transaction on the ownership and control of such jurisdictional facilities.
In Order No. 855, FERC adopted the proposed $10 million threshold language with no comments. With regard to the notification requirement, FERC: (i) clarified that each notification filing should be filed in the first docket for section 203 filings of the fiscal year, (ii) clarified that the notification filings are intended to be informational, and (iii) added a requirement that the notification filings must also include a statement regarding whether the parties to the transaction are affiliates. FERC declined to include any additional requirements to the notification filings, as some commenters had suggested.
FERC also reiterated that it would not change its interpretation of which transactions are subject to FERC’s jurisdiction under the “merge or consolidate” clause of FPA section 203(a)(1)(B). FERC stated that it would retain jurisdiction to review transactions over $10 million that involve a public utility’s acquisition of facilities from a non-public utility if such facilities would be subject to FERC’s jurisdiction after the transaction is completed.
Finally, FERC declined to address whether the revised regulations for small transactions would have an effect on questions posed in outstanding rulemakings and stated that Order No. 855 is limited in scope and is only intended to implement the changes made in the amended FPA section 203.
A copy of Order No. 855 can be found here.