CONSUMER OWNED UTILITIES OPPOSE PROPOSALS BY INVESTORS,
GENERATORS TO WEAKEN CROSS OWNERSHIP RULES
WASHINGTON, D.C., April 23, 2010 - The Transmission Access Policy Study
Group, the American Public Power Association, and the National Rural
Electric Cooperative Association (TAPS/APPA/NRECA) filed reply comments
this week in Federal Energy Regulatory Commission (FERC) Docket No.
RM09-16-000, responding to the initial comments of the Electric Power
Supply Association (EPSA) and the Financial Investors Energy Group
(FIEG) seeking to weaken rules governing cross ownership of electric
utilities.
The FERC in this docket has proposed to allow investors (including hedge
funds) to own up to 20% of multiple FERC-regulated "public utilities"
without Commission scrutiny, so long as such investors execute an
"affirmation" promising that they will not take an active role in the
management of the public utilities in which they own an interest.
TAPS/APPA/NRECA responded to proposals by EPSA and FIEG in their
respective initial comments to water down the affirmation requirement
itself, and to eliminate the requirement that the affirmation be made by
a senior executive officer, that it bind affiliates, employees,
officers, directors and investors, and that it be made on personal oath.
TAPS/APPA/NRECA said that FIEG "fails to explain how an institution can
make an accurate, binding, and ongoing commitment to the Commission, if
there is no person within the organization who is capable or willing to
do so."
TAPS/APPA/NRECA noted that these proposals only highlight the severe
shortcomings of behavioral approaches to regulating cross-ownership of
public utilities. They therefore argued for adoption of the proposal
that the Federal Trade Commission (FTC) made in its initial comments in
this docket, that acquiring companies not be able to control any
competitor utilities in the same market as the utility being acquired.
They also argued that EPSA's and FIEG's statements show that, at a
minimum, the Commission needs to adopt TAPS' and APPA/NRECA's
strengthening suggestions and/or adopt a case-by-case approach to
utility acquisitions in order to insure that the Affirmation commitments
are taken seriously and are enforceable.
TAPS/APPA/NRECA's filing can be found here:
http://www.appanet.org/files/PDFs/JointReplyCommentsRM091604222010.pdf
TAPS is an informal association of transmission-dependent utilities in
more than 35 states promoting open and non-discriminatory transmission
access and vigorously competitive wholesale electric markets.
Based in Washington, D.C.,
APPA is the national service organization for the nation's more than
2,000 community- and state-owned not-for-profit electric utilities
serving 45 million customers.
The National Rural Electric Cooperative Association is the national
service organization that represents the nation's more than 900 private,
not-for-profit, consumer-owned electric cooperatives, which provide
service to 42 million people in 47 states.
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