Implementation of Amended Section of the Federal Power Act, 33662-33664 [2020-11869]

Agencies

• DEPARTMENT OF ENERGY
• Federal Energy Regulatory Commission

[Federal Register Volume 85, Number 106 (Tuesday, June 2, 2020)]
[Notices]
[Pages 33662-33664]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-11869]


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DEPARTMENT OF ENERGY

Federal Energy Regulatory Commission

[Docket No. RM19-4-000]


Implementation of Amended Section of the Federal Power Act

AGENCY:  Federal Energy Regulatory Commission, DOE.

ACTION:  Notice of Availability of Report; Request for Public Comment.

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SUMMARY:  Pursuant to ``An Act to amend section 203 of the Federal 
Power Act'' (Act), the Commission issues an initial report on the 
effects of the amendment on mergers or consolidations by a public 
utility as well as the information collected since this amendment and 
the Commission's final rule implementing this amendment became 
effective.

DATES:  Comments are due on or before June 29, 2020.

ADDRESSES:  Comments, identified by docket number, may be filed 
electronically at https://www.ferc.gov in acceptable native applications 
and print-to-PDF, but not in scanned or picture format. For those 
unable to file electronically, comments may be filed by mail or hand-
delivery to: Federal Energy Regulatory Commission, Secretary of the 
Commission, 888 First Street NE, Washington, DC 20426. The Comment 
Procedures Section of this document contains more detailed filing 
procedures.

FOR FURTHER INFORMATION CONTACT: 
    Tina Briscoe (Technical Information), Office of Energy Market 
Regulation, 888 First Street NE, Washington, DC 20426, (202) 502-8751, 
[email protected].
    Regine Baus (Legal Information), Office of the General Counsel, 888 
First Street NE, Washington, DC 20426, (202) 502-8757, 
[email protected].

United States of America Federal Energy Regulatory Commission

Implementation of Amended Section 203(a)(1)(B) of the Federal Power 
Act; Notice Of Availability Of Report; Request For Public Comment

May 22, 2020

I. Introduction

    1. On September 28, 2018, Congress passed ``An Act to amend section 
203 of the Federal Power Act'' (Act) in Public Law 115-247. As 
discussed in further detail below, the Act resulted in two changes to 
section 203 of the Federal Power Act (FPA).\1\ The Act also directed 
the Commission to issue a report, subject to notice and comment, on the 
changes to FPA section 203 and to submit that report to Congress. As 
discussed below, interested persons may submit comments on this report 
by June 29, 2020.
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    \1\ 16 U.S.C. 824b (2018).
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II. Background

A. Public Law 115-247

    2. Section 1 of the Act amended section 203(a)(1)(B) \2\ to provide 
that no public utility shall, without first having secured an order of 
the Commission authorizing it to do so, merge or consolidate, directly 
or indirectly, its facilities subject to the jurisdiction of the 
Commission, or any part thereof, with the facilities of any other 
person, or any part thereof, that are subject to the jurisdiction of 
the Commission and have a value in excess of $10 million, by any means 
whatsoever. Section 3 of the Act provided that the amendment to section 
203(a)(1)(B) shall take effect 180 days after the date of the enactment 
of the Act, i.e., March 28, 2019. The primary effect of this amendment 
was to establish a $10 million threshold for

[[Page 33663]]

transactions that are subject to the Commission's review and 
authorization under section 203(a)(1)(B).
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    \2\ Id. 824b(a)(1)(B).
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    3. In section 2 of the Act, Congress amended section 203(a) to add 
section 203(a)(7) to require notification for certain transactions. 
Section 203(a)(7) provides that, not later than 180 days after the date 
of the enactment of section 203(a)(7), the Commission shall promulgate 
a rule requiring any public utility that is seeking to merge or 
consolidate, directly or indirectly, its facilities subject to the 
jurisdiction of the Commission, or any part thereof, with those of any 
other person, to notify the Commission of such transactions not later 
than 30 days after the date on which the transaction is consummated if: 
(1) The facilities, or any part thereof, to be acquired are of a value 
in excess of $1 million; and (2) such public utility is not required to 
secure a Commission order under amended section 203(a)(1)(B).
    4. The Act also specified that, not later than two years after the 
date of the enactment of the Act, the Commission shall submit to 
Congress a report that assesses the effects of the amendment made by 
section 1 and that such report shall take into account any information 
collected under section 203(a)(7). The Act required that the Commission 
provide for notice and comment with respect to the report.

B. Order No. 855

    5. The Commission issued Order No. 855 on February 21, 2019,\3\ to 
revise its regulations to implement the amendments in the Act. 
Specifically, the Commission revised section 33.1(a)(1)(ii) to provide 
that part 33 applies to any public utility seeking authorization under 
section 203 to merge or consolidate, directly or indirectly, its 
facilities subject to the jurisdiction of the Commission, or any part 
thereof, with the facilities of any other person, or any part thereof, 
that are subject to the jurisdiction of the Commission and have a value 
in excess of $10 million, by any means whatsoever.\4\
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    \3\ Implementation of Amended Section 203(a)(1)(B) of the 
Federal Power Act, Order No. 855, 166 FERC ] 61,120 (2019); see also 
Mergers or Consolidations by a Public Utility, 84 FR 6069 (Feb. 26, 
2019).
    \4\ 18 CFR 33.1(a)(1)(ii) (2019).
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    6. In addition, the Commission added section 33.12 to its 
regulations to require that public utilities submit a notification 
filing for transactions subject to section 203(a)(7). The Commission 
required that such public utilities include the following information 
in the notification filing: (1) The exact name of the public utility 
and its principal business address; and (2) a narrative description of 
the transaction, including the identity of all parties involved in the 
transaction 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. The 
Commission also required that the notification filing contain a 
statement regarding whether the parties to the transaction are 
affiliates to provide transparency as to whether these transactions are 
negotiated at arm's length and whether these transactions could have an 
effect on a public utility's rates.\5\
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    \5\ Id. 33.12 (2019).
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    7. The Commission directed public utilities to file the 
notification filings within a dedicated docket number associated with 
section 203 filings. Filings for each fiscal year (FY) are submitted 
into the designated docket number and made accessible through the 
Commission's eLibrary system.\6\
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    \6\ Filings for the FY are included in a separate docket denoted 
as EC19-1 for FY 2019, EC20-1 for FY 2020, etc.
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III. Review of Section 203 Filings Following Amendment to Section 
203(a)(1)(B)

    8. As to the effects of the amendment adding the $10 million 
threshold to section 203(a)(1)(B), the Act has resulted in two notable 
changes with respect to transactions that were previously and remain 
subject to section 203(a)(1)(B). The first such change is that, in 
general, since the Act took effect on September 28, 2018, the 
Commission has seen a reduction in the overall number of section 203 
filings from previous years. For example, in FY 2018 and FY 2019, 
respectively, the Commission received 164 and 142 filings under section 
203. However, to date in FY 2020, the Commission has received 66 
filings.
    9. In addition, since the Act took effect, the Commission has seen 
fewer filings requesting authorization for transactions under section 
203(a)(1)(B). Generally, these transactions involve acquisitions by a 
public utility of Commission-jurisdictional facilities, usually 
transmission facilities. Before the Act took effect, the Commission 
would receive a significant number of filings requesting authorization 
for transactions where the facilities at issue were valued at less than 
$10 million, many less than $1 million. Since the Act took effect, only 
a few filings requesting authorization under section 203(a)(1)(B) have 
been submitted. For example, in FY 2018, the Commission received 30 
filings requesting authorization under section 203(a)(1)(B). In 
contrast, in FY 2020, to date, the Commission has received only 17 
filings requesting authorization for transactions under section 
203(a)(1)(B). The Commission expects to continue to see fewer section 
203 filings as a result of the Act's addition of the $10 million 
threshold to this section of the FPA.

IV. Information Collected in Notification Filings

    10. Since the Act took effect, the Commission has received 14 
notification filings pursuant to section 203(a)(7) of the FPA and 
section 33.12 of the Commission's regulations. Below is a brief 
description of those filings. Interested persons may view the 
notification filings in Docket Nos. EC19-1-000 (for FY2019 transaction) 
and EC20-1-000 (for FY2020 transactions) for more detailed information.
    11. Specifically, in Docket No. EC19-1-000, the Commission received 
notification filings for eight transactions submitted by the following 
entities: Virginia Electric and Power Company, Monongahela Power 
Company, and The Potomac Edison Company; NSTAR Electric Company; 
Entergy Louisiana, LLC (Entergy Louisiana); FPL Energy Wyman IV LLC 
(FPL Energy); ITC Midwest LLC, Westar Energy, Inc., and American 
Transmission Systems, Inc. For example, Entergy Louisiana submitted a 
filing indicating that it had acquired from a non-affiliated customer 
certain limited transmission facilities that were subject to the 
Commission's jurisdiction with a total value in excess of $1 million, 
but less than $10 million. Entergy Louisiana stated that the total cost 
of the transmission facilities and equipment was $6,043,750.
    12. Thus far for FY 2020, in Docket No. EC20-1-000 the Commission 
has received six notification filings, including notices filed by 
Michigan Electric Transmission Company, LLC; Paulding Wind Farm IV, LLC 
(Paulding IV); International Transmission Company; Little Bear Solar 1, 
LLC; and American Electric Power Service Corporation. For example, 
Paulding IV submitted a filing in connection with its acquisition of an 
undivided interest in certain Commission-jurisdictional shared 
interconnection facilities from Paulding Wind Farm III LLC (Paulding 
III). According to Paulding IV, both parties were indirectly owned by 
EDP Renewables North America LLC and are

[[Page 33664]]

affiliated. Paulding IV acquired the undivided ownership interests from 
Paulding III for $4,694,270, which the parties stated was net book 
value.
    13. Given the Commission's more limited oversight over transactions 
subject to section 203(a)(7), we believe that the information collected 
in these notification filings was adequate to ensure compliance with 
the statute and the Commission's regulations. That is, the information 
collected is far less than the information required for full section 
203 applications pursuant to part 33 of the Commission's regulations, 
but more than a brief notice establishing that the underlying 
transaction was consummated. Thus, the Commission continues to be able 
to track who controls the Commission-jurisdictional facilities at issue 
in these transactions as well as whether these transactions are 
executed at arm's length or could affect a public utility's rates.

V. Request for Comment

    14. As discussed above, the Act specified that, not later than two 
years after the date of enactment of the Act, the Commission shall 
submit to Congress a report that assesses the effects of the amendment 
made by section 1 and takes into account any information collected 
under section 203(a)(7). The Act also required that the Commission 
provide for notice and comment with respect to this report.
    15. Consistent with this directive from Congress, we request 
comment on this report. Comments are due June 29, 2020. The Commission 
will review the comments prior to submitting the report to Congress by 
September 28, 2020.

VI. Comment Procedures

    16. The Commission invites interested persons to submit comments on 
the matters and issues proposed in the report, including any related 
matters that commenters may wish to discuss. Comments are due on or 
before June 29, 2020. Comments must refer to Docket No. RM19-4-000 and 
must include the commenter's name, the organization they represent, if 
applicable, and their address.
    17. The Commission encourages comments to be filed electronically 
via the eFiling link on the Commission's website at https://www.ferc.gov. The Commission accepts most standard word processing 
formats. Documents created electronically using word processing 
software should be filed in native applications or print-to-PDF format 
and not in a scanned format. Commenters filing electronically do not 
need to make a paper filing.
    18. Commenters that are not able to file comments electronically 
must send an original of their comments to: Federal Energy Regulatory 
Commission, Secretary of the Commission, 888 First Street NE, 
Washington, DC 20426.
    19. All comments will be placed in the Commission's public files 
and may be viewed, printed, or downloaded remotely. Commenters on this 
report are not required to serve copies of their comments on other 
commenters.

    Dated: May 27, 2020.
Kimberly D. Bose,
Secretary.
[FR Doc. 2020-11869 Filed 6-1-20; 8:45 am]
 BILLING CODE 6717-01-P