On October 20, 2022, the Federal Energy Regulatory Commission (FERC) expanded its definition of an “affiliate” under FERC regulations by providing clarification in two Orders.
As we find in the Evergy decision issued contemporaneously, board membership confers rights, privileges, and access to non-public information, including information on commercial strategy and operations. Where an investor’s own officer or director, or other appointee accountable to the investor, is appointed to the board of a public utility or holding company that owns public utilities, the investor itself will have those rights, privileges, and access, and thus the authority to influence significant decisions involving the public utility or public utility holding company. We clarify, consistent with our finding in Evergy, that the appointment of two board members that are not independent from Investor and its affiliates to TransAlta’s Board of Directors does constitute a change of control. Going forward, appointment of an investor’s own officers or directors, or other appointee accountable to the investor, to the board of a public utility or holding company that owns public utilities will require prior Commission approval under section 203(a)(1)(A).
TransAlta Energy Marketing (U.S.) Inc., et al., Order at pp. 10-11.
See the two FERC Orders here:
Evergy Kansas Central, Inc., et al. (FERC Docket No. ER20-67-001, et al.): https://www.ferc.gov/media/e-5-er20-67-001
TransAlta Energy Marketing (U.S.) Inc., et al. (FERC Docket No. EC22-45-000): https://www.ferc.gov/media/e-6-ec22-45-000