An amendment to FERC’s M&A statute, Section 203 of the Federal Power Act (FPA), was signed into law on September 28, 2018. (See our prior blog post.) Public Law 115-247 (PL 115-347 or the Amendment) makes a minor but helpful change to one provision of FPA Section 203 by immunizing one particular class of transactions from pre-consummation FERC M&A application and approval requirements.
On February 21, 2019, FERC adopted the rulemaking that the Amendment directs:
- Mergers or consolidations of public utility facilities that are valued at under $1 million may be undertaken without the parties first obtaining FPA Section 203 authorization from FERC
- Likewise, mergers or consolidations of public utility facilities that are valued above $1 million but not above $10 million may be undertaken without the parties first obtaining FPA Section 203 authorization from FERC, but are subject to a reporting requirement
- The reporting requirement applicable to those merger transactions falling within the $1 million to $10 million range directs that the form of notice to the Commission be submitted within 30 days following the facility merger or consolidation, and include the following information:
- The exact name of the public utility and its principal business address
- A narrative description of the transaction, including
- the identity of all parties involved in the transaction, whether such parties are affiliates, and all jurisdictional facilities associated with or affected by the transaction;
- the location of such jurisdictional facilities involved in the transaction;
- 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.
- Mergers or consolidations of public utility facilities that are valued above $10 million will continue to require formal, pre-consummation FPA Section 203 applications and orders, unless some other exemption or blanket authorization applies in a particular case
- The new rulemaking will become effective 30 days after its publication in the Federal Register, or likely in late March 2019.
The new rulemaking will simplify certain asset transfers but does not in any way change or relax Commission Section 203 requirements relating to changes in the voting ownership interests of a public utility, and to direct and indirect “dispositions” of control. Those requirements were not affected by the Amendment.