[Federal Register Volume 73, Number 231 (Monday, December 1, 2008)]
[Notices]
[Pages 72783-72784]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E8-28401]


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DEPARTMENT OF ENERGY

Federal Energy Regulatory Commission

[Docket No. PL09-3-000]


Control and Affiliation for Purposes of the Commission's Market-
Based Rate Requirements Under Section 205 of the Federal Power Act and 
the Requirements of Section 203 of the Federal Power Act; Notice of 
Agenda for Workshop

November 21, 2008.
    As announced in the notice of workshop issued November 12, 2008, 
Commission staff will convene a workshop with interested persons 
regarding issues raised in Docket No. PL09-3-000, concerning the 
petition filed by the Electric Power Supply Association (EPSA). The 
workshop will be held on December 3, 2008, from 9 a.m. to 12 p.m. EST. 
The workshop will take place in hearing room 7 at the Federal Energy 
Regulatory Commission, located at 888 First Street, NE., Washington, 
DC.
    This notice provides more information on the topics to be explored 
in the workshop. The goal of the workshop is to consider issues 
involving control and affiliation as they pertain to the Commission's 
market-based rate requirements under section 205 of the Federal Power 
Act (FPA) and the requirements of section 203 of the FPA.
    In its petition,\1\ EPSA asks that the Commission state that 
investments in publicly-held companies by investors owning less than 20 
percent of such companies' voting securities and making filings with 
the Securities and Exchange Commission (SEC) on Schedule 13G, 
certifying that the investment is not for the purpose of controlling 
the company, will not be deemed to convey ``control'' or to result in 
``affiliation'' for market-based rate or FPA section 203 purposes. EPSA 
also seeks confirmation that Commission findings that a given entity 
does not ``control'' another entity made in the FPA section 203 setting 
apply equally in the market-based rate setting to affected market-based 
rate sellers. Finally, EPSA requests that the Commission state that 
investments by entities upstream of a publicly-held company in entities 
not otherwise related to the publicly-held company will not be deemed 
to be within the knowledge and control of the

[[Page 72784]]

publicly-held company's subsidiaries with market-based rate 
authorization, and, therefore, those market-based rate subsidiaries 
will not be required to file a notification of change in status or to 
include generation or inputs to generation owned or controlled by the 
other entities in future market power analyses.
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    \1\ See Petition of the Electric Power Supply Association For 
Guidance Regarding ``Control'' and ``Affiliation,'' Docket No. EL08-
87-000, re-docketed as PL09-3-000 (Sept. 2, 2008) (Petition).
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    In light of the issues raised by EPSA, participants are invited to 
address some or all of the following questions:
    1. Should the Commission reconsider its decision in FPA Section 203 
Supplemental Policy Statement, 120 FERC ] 61,060 (2007) not to rely 
solely on a Schedule 13G filing as evidence of a lack of control and 
instead to consider the totality of the facts and circumstances on a 
case-by-case basis? If so, why?
    2. How does compliance with the intent to not exercise control for 
purposes Schedule 13G address the Commission's concerns under section 
203 of the FPA and the Commission's market-based rate program?
    3. What statutory and policy purposes is a Schedule 13G filing 
intended to fulfill under the SEC's regulatory program and how do they 
compare with the statutory and policy purposes of section 203 of the 
FPA and the Commission's market-based rate program under sections 205 
and 206 of the FPA? Are the SEC and this Commission seeking to fulfill 
fundamentally different goals with respect to an entity's possible 
exercise of control, such that the Commission's reliance on the SEC's 
Schedule 13 filing requirements would be insufficient to help protect 
against the potential exercise of control as relevant to the 
Commission's concerns under sections 203, 205 and 206 of the FPA? If 
the answer to the prior question is yes, that reliance on the Schedule 
13 filing requirements are insufficient, what if any additional filings 
or requirements might supplement the Schedule 13 requirements in this 
regard?
    4. What actions can an investor take with respect to the 
management, operation or policies of a company in which it holds an 
investment and still be considered eligible to file a Schedule 13G? To 
what extent could taking any of those actions directly or indirectly in 
some way affect some aspect of the day-to-day operation of a public 
utility in which the investor holds an interest, either directly or 
through a holding company?
    5. Using EPSA's hypothetical example shown on page 9 of the 
Petition, how far upstream should a seller go when determining whether 
an entity is an affiliate?
    6. Using EPSA's hypothetical example shown on page 9 of the 
Petition, which of the IPPs should be considered to be under common 
control, and therefore affiliates, under the Commission's regulations?
    7. Should a finding under FPA section 203 that an entity does not 
``control'' another entity apply equally in the market-based rate 
setting? Conversely, should a finding under section 203 that an entity 
does ``control'' another entity necessarily apply equally in the 
market-based rate setting? If not, under what conditions or 
circumstances would the Commission have a reasonable basis to conclude 
that the same finding should not apply in the market-based rate 
setting?
    a. For example, if an upstream owner has been found to not have 
control for section 203 purposes over two large IPPs in the same 
relevant market, should the IPPs be required to study one another's 
generation for purposes of their individual horizontal and vertical 
market power analyses? Would the IPPs remain unaffiliated?
    b. If the upstream owner has control over both IPPs for section 203 
purposes, should the IPPs be required to study one another's generation 
for purposes of their individual horizontal and vertical market power 
analyses?
    8. Should the Commission revise its requirements under FPA section 
203 and the market-based rate program, in light of the concern raised 
by EPSA that electric utilities may not know when their upstream owners 
acquire ownership interests in other electric utilities? If so, what 
changes can both address these concerns and still permit the Commission 
to carry out its responsibilities under sections 203 and 205 of the 
FPA?
    All interested persons are invited to participate in this workshop. 
Those interested in participating are asked to register no later than 
November 28, 2008. To register or for additional information, please 
contact Christina Hayes at (202) 502-6194 or at 
[email protected].

Nathaniel J. Davis, Sr.,
Deputy Secretary.
 [FR Doc. E8-28401 Filed 11-28-08; 8:45 am]
BILLING CODE 6717-01-P