FERC Finds Bloom Energy, Subsidiaries, Continue to be Exempt from PUCHA 2005 by Troutman Sanders LLP
On October 15, 2015, the Commission granted a June 30, 2015 petition for declaratory order filed by Bloom Energy Corporation (“Bloom”)—a maker of fuel cells—seeking confirmation that its current and future subsidiaries engaged in generating and selling electricity at negotiated rates to non-captive customers continue to be exempt from certain Commission regulations under the Public Utility Holding Company Act of 2005 (“PUHCA 2005”).
Ain’t this some shit
In its October 15, 2015 order, the Commission noted that, under its regulations,“non-traditional utilities” are: (i) Commission-jurisdictional utilities that have no captive customers and that are not affiliated with any jurisdictional utility that has captive customers, and that do not own Commission-jurisdictional transmission facilities or provide Commission-jurisdictional transmission services and that are not affiliated with persons that own Commission-jurisdictional transmission facilities or provide Commission-jurisdictional transmission services; and (ii) holding companies that own or control only such utilities.
“have no captive customers” True but they hold Delmarva customers $$$$ hostage!
With respect to the first change identified by Bloom—that two of its subsidiaries had been granted market-based rate authority—the Commission found that neither these subsidiaries, nor their affiliates, had acquired transmission facilities or provided transmission services, and did not have captive customers, and therefore continued to meet the definition of “non-traditional utilities.”
With respect to the second change identified by Bloom—ExGen’s acquisition of certain member interests in Bloom subsidiaries—the Commission found that while, according to Bloom, neither ExGen nor ExGen’s utility affiliates had any captive customers, certain of ExGen’s utility affiliates did own transmission facilities subject to the Commission’s jurisdiction. According to the Commission, Bloom was thus required to demonstrate that ExGen is not an affiliate of the Bloom subsidiaries in which ExGen had acquired member interests, if those Bloom subsidiaries were to continue to qualify as “non-traditional utilities.” The Commission noted that, under PUHCA 2005, an “affiliate” of a company refers to any company, 5 percent or more of the outstanding voting securities of which are owned, controlled, or held with power to vote, directly or indirectly, by such company. The Commission determined that, while the interests that ExGen had acquired granted ExGen certain rights, they did not confer “control” over Bloom’s subsidiaries, or allow ExGen to participate in the subsidiaries’ day-to-day operations, and did not otherwise constitute “voting securities.” Therefore, the Commission found that the Bloom subsidiaries in question continued to meet the definition of “non-traditional utility,” and, by extension, continued to be exempt from the requirements of PUCHA 2005.