FERC Proposes to Collect New Upstream Owner Data from Holding Companies of MBR Entities Holding Certain Blanket Authorizations

Morgan Lewis - Power & Pipes

Morgan Lewis - Power & Pipes

FERC issued a Notice Seeking Comments on March 18 on its proposal to collect additional data from market-based rate (MBR) Sellers whose ultimate upstream affiliate(s)[1] own their voting securities under a Federal Power Act Section 203(a)(2) blanket authorization. FERC proposes changes to the MBR Data Dictionary so that the relational database rolling out in 2021 can more accurately reflect ultimate upstream affiliates (or the lack thereof) among Sellers that have an ultimate upstream affiliate that is an institutional investor who acquired their securities pursuant to a Section 203(a)(2) blanket authorization specific to that investor.

These blanket authorizations allow the holder to purchase 10%–20% of the voting equity without seeking prior FERC approval under Section 203 of the Federal Power Act, under which 10% or greater voting equity purchases in non-exempt public utilities typically require prior FERC approval. FERC explained that the additional data it is now proposing to collect will prevent the connection of unaffiliated entities and will enable the relational database to auto-generate accurate asset appendices.

In Order No. 860, FERC established the relational database, through which it will collect market-based rate information, including certain upstream ownership information, asset appendix information, and indicative screen information. With respect to upstream ownership information, Sellers are required to identify and update their ultimate upstream affiliates in the relational database. However, the relational database currently does not provide a method to distinguish between (1) ultimate upstream affiliates and (2) the small subset of potential ultimate upstream affiliates that acquired the securities of a Seller through a Section 203(a)(2) blanket authorization.

FERC proposes to update the MBR Data Dictionary to add the three new attributes when identifying upstream affiliates with these blanket authorizations:

  • The docket number of the proceeding in which FERC granted the Section 203(a)(2) blanket authorization
  • The utility ID types of the upstream affiliates whose securities were acquired under the Section 203(a)(2) blanket authorization
  • The utility IDs of such upstream affiliates

If adopted, only Sellers that have upstream affiliates that have acquired 10% or more of their securities under a Section 203(a)(2) blanket authorization would need to provide this additional data.

Comments on FERC’s proposed changes to the MBR Data Dictionary are due 60 days after publication in the Federal Register.


[1] An “ultimate upstream affiliate” is defined as the furthest upstream affiliate(s) in the ownership chain that does not have 10% or more of its outstanding securities owned, held or controlled, with power to vote, by any person (including an individual or company). By contrast, “upstream affiliate” is defined as any person that directly or indirectly owns, controls, or holds with power to vote, 10% or more of the outstanding voting securities of the company.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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