FERC has proposed a rule to ensure that certain acquisitions of public utilities by holding companies that do not influence the control of the utility do not trigger certain market-based rate requirements or cross-subsidization restrictions. The Federal Energy Regulatory Commission is seeking comment on a notice of proposed rulemaking (NOPR) granting blanket authorization for a holding company to acquire 10% or more, but less than 20%, of a public utility, provided that the holding company files an affirmation in support of exemption from affiliation requirements, a new FERC form. The affirmation would ensure that a holding company purchaser would not change or influence the control of the public utility. The proposed rule would exempt that public utility from certain market-based rate requirements and cross-subsidization restrictions. The new process would allow FERC to monitor and sanction entities that violate any statements made in the affirmation. The proposal came out of a workshop that took place in December 2008 to explore issues involving control and affiliation as they pertain to the Commission’s market-based rate requirements.

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