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House Panel Passes 11 Energy Bills; One Sets $10M Threshold for Some M&A

The House Committee on Energy and Commerce (E&C) Committee on Wednesday passed 11 bills covering energy infrastructure and efficiency matters, including one bill that would set a $10 million minimum threshold for mergers and acquisitions (M&A) subject to FERC jurisdiction.

HR 1109 calls for amending Section 203 of the Federal Power Act (FPA) in two places. Specifically, the first change would clarify facility merger authorization. The reworded FPA would not allow a public utility to merge or consolidate, either directly or indirectly, any facilities or parts of facilities worth more than $10 million without first having secured approval from the Federal Energy Regulatory Commission.

The second change outlined in HR 1109 would affect the notification process for certain transactions.

All 11 bills will now move to the full House for consideration. HR 1109 was introduced by Rep. Tim Walberg (R-MI) in February; most of the remaining bills dealt with hydroelectric power.

"When Congress can take steps that allow for more domestic energy output, lower costs for ratepayers, reduced emissions, and more jobs, it should not hesitate to do so," said E&C Committee Chairman Greg Walden (R-OR). "These bills all lead us toward the common goal of smarter energy use. They are also job creators and can be done at little or no cost to the taxpayers. I'm thankful for the committee's dedication to enact solutions that put consumers first."

Under the FPA, FERC is given the responsibility for determining whether M&A in power markets is in the public interest. In May 2016, FERC issued a four-point policy statement on the future implementation of hold harmless commitments, which applicants offer as ratepayer protection mechanisms to mitigate the adverse effects resulting from M&A. One of the points stipulates that an applicant "may be able to demonstrate that the transaction will not have an adverse effect on rates without the need to make any hold harmless commitment."

Under a separate order issued by FERC in February 2012, the Commission decided after receiving public comments to retain its existing policies for the analysis of horizontal market power when reviewing transactions under Section 203 of the FPA.

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