On May 19, 2016, the Federal Energy Regulatory Commission (FERC or Commission) issued a Final Policy Statement clarifying FERC’s implementation of hold harmless commitments in Federal Power Act (FPA) Section 203 applications seeking change of control authorization. The Final Policy Statement largely tracks a Proposed Policy Statement that was issued in January of 2015.

For FERC approval under Section 203, a transaction must be “consistent with the public interest.” The Commission considers three factors in determining whether a transaction meets this requirement: the effect of the transaction on (1) competition; (2) rates; and (3) regulation. The Policy Statement relates to the second prong of FERC’s analysis (the effect on rates).
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On December 2, 2014, the D.C. Circuit issued its decision in Midland Power Cooperative and National Rural Electric Cooperative Association v. Federal Energy Regulatory Commission, No. 13-1184, finding that it does not have jurisdiction to review Federal Energy Regulatory Commission (FERC) decisions under Section 210 of the Public Utility Regulatory Policies Act of 1978 (PURPA)
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On March 28, 2013, the CFTC issued two final orders, providing exemptive relief to certain energy-related transactions between municipals and electric cooperatives and to certain transactions that are offered or sold in Regional Transmission Organizations (RTO) or Independent System Operators (ISO).  Notwithstanding the relief granted through each of the final orders, the CFTC has reserved its general anti-fraud and anti-manipulation authority.
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The U.S. Court of Appeals for the District of Columbia Circuit issued its opinion in New England Power Generators Association, Inc. v. Federal Energy Regulatory Commission, Case No. 11-1422 (D.C. Cir. Feb. 15, 2013). In that case, the Court reviewed the Federal Energy Regulatory Commission’s (FERC or Commission) determinations regarding the applicability of the Mobile-Sierra doctrine to a capacity market auction price.  Under the Mobile-Sierra doctrine, FERC must presume that the electricity rate set in a freely negotiated wholesale-energy contract meets the “just and reasonable” requirement of the Federal Power Act, and the presumption may be overcome only if FERC concludes that the contract seriously harms the public interest. Many have viewed this standard as “practically insurmountable.”
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