18 Cfr 33

Federal Energy Regulatory Commission
§ 32.2

Required exhibits.

There shall be filed with the application and as a part thereof the following
exhibits:
Exhibit A. Statement of the estimated capital cost of all facilities required to establish
the connection, and the estimated annual
cost of operating such facilities.
Exhibit B. A general or key map on a scale
not greater than 20 miles to the inch showing, in separate colors, the territory served
by each utility, and the location of the facilities used for the generation and transmission of electric energy, indicating on said
map the points between which connection
may be established most economically.

§ 32.3

Other information.

The Commission may require additional information when it appears to
be pertinent in a particular case.
§ 32.4

Filing procedure.

All applications under Part 32 must
be filed with the Secretary of the Commission in accordance with filing procedures posted on the Commission’s
Web site at http://www.ferc.gov.
[Order 737, 75 FR 43403, July 26, 2010]

PART 33—APPLICATIONS UNDER
FEDERAL POWER ACT SECTION 203

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Sec.
33.1 Applicability, definitions, and blanket
authorizations.
33.2 Contents of application—general information requirements.
33.3 Additional information requirements
for applications involving horizontal
competitive impacts.
33.4 Additional information requirements
for applications involving vertical competitive impacts.
33.5 Proposed accounting entries.
33.7 Verification.
33.8 Requirements for filing applications.
33.9 [Reserved]
33.10 Additional information.
33.11 Commission procedures for the consideration of applications under section 203
of the FPA.
AUTHORITY: 16 U.S.C. 791a–825r, 2601–2645; 31
U.S.C. 9701; 42 U.S.C. 7101–7352.
SOURCE: Order 642, 65 FR 71014, Nov. 28,
2000, unless otherwise noted.

§ 33.1
§ 33.1 Applicability, definitions, and
blanket authorizations.
(a) Applicability. (1) The requirements
of this part will apply to any public
utility seeking authorization under
section 203 of the Federal Power Act
to:
(i) Sell, lease, or otherwise dispose of
the whole of its facilities subject to the
jurisdiction of the Commission, or any
part thereof of a value in excess of $10
million;
(ii) Merge or consolidate, directly or
indirectly, such facilities or any part
thereof with those of any other person,
by any means whatsoever;
(iii) Purchase, acquire, or take any
security with a value in excess of $10
million of any other public utility; or
(iv) Purchase, lease, or otherwise acquire an existing generation facility:
(A) That has a value in excess of $10
million; and
(B) That is used in whole or in part
for wholesale sales in interstate commerce by a public utility.
(2) The requirements of this part
shall also apply to any holding company in a holding company system that
includes a transmitting utility or an
electric utility if such holding company seeks to purchase, acquire, or
take any security with a value in excess of $10 million of, or, by any means
whatsoever, directly or indirectly,
merge or consolidate with, a transmitting utility, an electric utility company, or a holding company in a holding company system that includes a
transmitting utility, or an electric
utility company, with a value in excess
of $10 million.
(b) Definitions. For the purposes of
this part, as used in section 203 of the
Federal Power Act (16 U.S.C. 824b).
(1) Existing generation facility means a
generation facility that is operational
at or before the time the section 203
transaction is consummated. ‘‘The
time the transaction is consummated’’
means the point in time when the
transaction actually closes and control
of the facility changes hands. ‘‘Operational’’ means a generation facility
for which construction is complete (i.e.,
it is capable of producing power). The
Commission will rebuttably presume
that section 203(a) applies to the transfer of any existing generation facility

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§ 33.1

18 CFR Ch. I (4–1–18 Edition)

unless the utility can demonstrate
with substantial evidence that the generator is used exclusively for retail
sales.
(2) Non-utility associate company
means any associate company in a
holding company system other than a
public utility or electric utility company that has wholesale or retail customers served under cost-based regulation.
(3) Value when applied to:
(i) Transmission facilities, generation facilities, transmitting utilities,
electric utility companies, and holding
companies, means the market value of
the facilities or companies for transactions between non-affiliated companies; the Commission will rebuttably
presume that the market value is the
transaction price. For transactions between affiliated companies, value
means original cost undepreciated, as
defined in the Commission’s Uniform
System of Accounts prescribed for public utilities and licensees in part 101 of
this chapter, or original book cost, as
applicable;
(ii) Wholesale contracts, means the
market value for transactions between
non-affiliated companies; the Commission will rebuttably presume that the
market value is the transaction price.
For transactions between affiliated
companies, value means total expected
nominal contract revenues over the remaining life of the contract; and
(iii) Securities, means market value
for transactions between non-affiliated
companies;
the
Commission
will
rebuttably presume that the market
value is the agreed-upon transaction
price. For transactions between affiliated companies, value means market
value if the securities are widely traded, in which case the Commission will
rebuttably presume that market value
is the market price at which the securities are being traded at the time the
transaction occurs; if the securities are
not widely traded, market value is determined by:
(A) Determining the value of the
company that is the issuer of the equity securities based on the total
undepreciated book value of the company’s assets;
(B) Determining the fraction of the
securities at issue by dividing the num-

ber of equity securities involved in the
transaction by the total number of outstanding equity securities for the company; and
(C) Multiplying the value determined
in paragraph (b)(3)(iii)(A) of this section by the value determined in paragraph (b)(3)(iii)(B) of this section (i.e.,
the value of the company multiplied by
the fraction of the equity securities at
issue).
(4) The terms associate company, electric utility company, foreign utility company, holding company, and holding company system have the meaning given
those terms in the Public Utility Holding Company Act of 2005. The term
holding company does not include: A
State, any political subdivision of a
State, or any agency, authority or instrumentality of a State or political
subdivision of a State; or an electric
power cooperative.
(5) For purposes of this part, the
term captive customers means any
wholesale or retail electric energy customers served by a franchised public
utility under cost-based regulation.
(c) Blanket Authorizations. (1) Any
holding company in a holding company
system that includes a transmitting
utility or an electric utility is granted
a blanket authorization under section
203(a)(2) of the Federal Power Act to
purchase, acquire, or take any security
of:
(i) A transmitting utility or company
that owns, operates, or controls only
facilities used solely for transmission
in intrastate commerce and/or sales of
electric energy in intrastate commerce, provided that if any public utility within the holding company system
has captive customers, or owns or provides transmission service over jurisdictional transmission facilities, the
holding company must report the acquisition to the Commission, including
any state actions or conditions related
to the transaction, and shall provide an
explanation of why the transaction
does not result in cross-subsidization;
(ii) A transmitting utility or company that owns, operates, or controls
only facilities used solely for local distribution and/or sales of electric energy
at retail regulated by a state commission, provided that if any public utility
within the holding company system

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Federal Energy Regulatory Commission
has captive customers, or owns or provides transmission service over jurisdictional transmission facilities, the
holding company must report the acquisition to the Commission, including
any state actions or conditions related
to the transaction, and shall provide an
explanation of why the transaction
does not result in cross-subsidization;
or
(iii) An electric utility company that
owns generating facilities that total
100 MW or less and are fundamentally
used for its own individual load or for
sales to affiliated end-users.
(2) Any holding company in a holding
company system that includes a transmitting utility or an electric utility is
granted a blanket authorization under
section 203(a)(2) of the Federal Power
Act to purchase, acquire, or take:
(i) Any non-voting security (that
does not convey sufficient veto rights
over management actions so as to convey control) in a transmitting utility,
an electric utility company, or a holding company in a holding company system that includes a transmitting utility or an electric utility company; or
(ii) Any voting security in a transmitting utility, an electric utility
company, or a holding company in a
holding company system that includes
a transmitting utility or an electric
utility company if, after the acquisition, the holding company will own
less than 10 percent of the outstanding
voting securities; or
(iii) Any security of a subsidiary
company within the holding company
system.
(3) The blanket authorizations granted under paragraph (c)(2) of this section are subject to the conditions that
the holding company shall not:
(i) Borrow from any electric utility
company subsidiary in connection with
such acquisition; or
(ii) Pledge or encumber the assets of
any electric utility company subsidiary in connection with such acquisition.
(4) A holding company granted blanket authorizations in paragraph (c)(2)
of this section shall provide the Commission copies of any Schedule 13D,
Schedule 13G and Form 13F, at the
same time and on the same basis, as
filed with the Securities and Exchange

§ 33.1
Commission in connection with any securities purchased, acquired or taken
pursuant to this section.
(5) Any holding company in a holding
company system that includes a transmitting utility or an electric utility is
granted a blanket authorization under
section 203(a)(2) of the Federal Power
Act to acquire a foreign utility company. However, if such holding company or any of its affiliates, its subsidiaries, or associate companies within
the holding company system has captive customers in the United States, or
owns or provides transmission service
over jurisdictional transmission facilities in the United States, the authorization is conditioned on the holding
company, consistent with 18 CFR
385.2005(b), verifying by a duly authorized corporate official of the holding
company that the proposed transaction:
(i) Will not have any adverse effect
on competition, rates, or regulation;
and
(ii) Will not result in, at the time of
the transaction or in the future:
(A) Any transfer of facilities between
a traditional public utility associate
company that has captive customers or
that owns or provides transmission
service
over
jurisdictional
transmission facilities, and an associate
company;
(B) Any new issuance of securities by
a traditional public utility associate
company that has captive customers or
that owns or provides transmission
service
over
jurisdictional
transmission facilities, for the benefit of an
associate company;
(C) Any new pledge or encumbrance
of assets of a traditional public utility
associate company that has captive
customers or that owns or provides
transmission service over jurisdictional transmission facilities, for the
benefit of an associate company; or
(D) Any new affiliate contracts between a non-utility associate company
and a traditional public utility associate company that has captive customers or that owns or provides transmission service over jurisdictional
transmission facilities, other than nonpower goods and services agreements
subject to review under sections 205
and 206 of the Federal Power Act.

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§ 33.1

18 CFR Ch. I (4–1–18 Edition)

(iii) A transaction by a holding company subject to the conditions in paragraphs (c)(5)(i) and (ii) of this section
will be deemed approved only upon filing the information required in paragraphs (c)(5)(i) and (ii) of this section.
(6) Any public utility or any holding
company in a holding company system
that includes a transmitting utility or
an electric utility is granted a blanket
authorization under sections 203(a)(1)
or 203(a)(2) of the Federal Power Act,
as relevant, for internal corporate reorganizations that do not result in the
reorganization of a traditional public
utility that has captive customers or
that owns or provides transmission
service
over
jurisdictional
transmission facilities, and that do not
present cross-subsidization issues.
(7) Any public utility in a holding
company system that includes a transmitting utility or an electric utility is
granted a blanket authorization under
section 203(a)(1) of the Federal Power
Act to purchase, acquire, or take any
security of a public utility in connection with an intra-system cash management program, subject to safeguards to prevent cross-subsidization
or pledges or encumbrances of utility
assets.
(8) A person that is a holding company solely with respect to one or more
exempt wholesale generators (EWGs),
foreign utility companies (FUCOs), or
qualifying facilities (QFs) is granted a
blanket authorization under section
203(a)(2) of the Federal Power Act to
acquire the securities of additional
EWGs, FUCOs, or QFs.
(9) A holding company, or a subsidiary of that company, that is regulated by the Board of Governors of the
Federal Reserve Bank or by the Office
of the Comptroller of the Currency,
under the Bank Holding Company Act
of 1956 as amended by the GrammLeach-Bliley Act of 1999, is granted a
blanket authorization under section
203(a)(2) of the Federal Power Act to
acquire and hold an unlimited amount
of the securities of holding companies
that include a transmitting utility or
an electric utility company if such acquisitions and holdings are in the normal course of its business and the securities are held:
(i) As a fiduciary;

(ii) As principal for derivatives hedging purposes incidental to the business
of banking and it commits not to vote
such securities to the extent they exceed 10 percent of the outstanding
shares;
(iii) As collateral for a loan; or
(iv) Solely for purposes of liquidation
and in connection with a loan previously contracted for and owned beneficially for a period of not more than
two years, with the following conditions and reporting requirement: The
holding does not confer a right to control, positively or negatively, through
debt covenants or any other means, the
operation or management of the public
utility or public utility holding company, except as to customary creditors’
rights or as provided under the United
States Bankruptcy Code; and the parent holding company files with the
Commission on a public basis and within 45 days of the close of each calendar
quarter, both its total holdings and its
holdings as principal, each by class, unless the holdings within a class are less
than one percent of outstanding shares,
irrespective of the capacity in which
they were held.
(10) Any holding company, or a subsidiary of that company, is granted a
blanket authorization under section
203(a)(2) of the Federal Power Act to
acquire any security of a public utility
or a holding company that includes a
public utility:
(i) For purposes of conducting underwriting activities, subject to the condition that holdings that the holding
company or its subsidiary are unable
to sell or otherwise dispose of within 45
days are to be treated as holdings as
principal and thus subject to a limitation of 10 percent of the stock of any
class unless the holding company or its
subsidiary has within that period filed
an application under section 203 of the
Federal Power Act to retain the securities and has undertaken not to vote the
securities during the pendency of such
application; and the parent holding
company files with the Commission on
a public basis and within 45 days of the
close of each calendar quarter, both its
total holdings and its holdings as principal, each by class, unless the holdings
within a class are less than one percent

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Federal Energy Regulatory Commission
of outstanding shares, irrespective of
the capacity in which they were held;
(ii) For purposes of engaging in hedging transactions, subject to the condition that if such holdings are 10 percent or more of the voting securities of
a given class, the holding company or
its subsidiary shall not vote such holdings to the extent that they are 10 percent or more.
(11) Any public utility is granted a
blanket authorization under section
203(a)(1) of the Federal Power Act to
transfer a wholesale market-based rate
contract to any other public utility affiliate that has the same ultimate upstream ownership, provided that neither affiliate is affiliated with a traditional public utility with captive customers.
(12) A public utility is granted a blanket
authorization
under
section
203(a)(1) of the Federal Power Act to
transfer its outstanding voting securities to:
(i) Any holding company granted
blanket authorizations in paragraph
(c)(2)(ii) of this section if, after the
transfer, the holding company and any
of its associate or affiliate companies
in aggregate will own less than 10 percent of the outstanding voting interests of such public utility; or
(ii) Any person other than a holding
company if, after the transfer, such
person and any of its associate or affiliate companies in aggregate will own
less than 10 percent of the outstanding
voting interests of such public utility,
and within 30 days after the end of the
calendar quarter in which such transfer
has occurred the public utility notifies
the Commission in accordance with
paragraph (c)(17) of this section.
(13) A public utility is granted a blanket
authorization
under
section
203(a)(1) of the Federal Power Act to
transfer its outstanding voting securities to any holding company granted
blanket authorization in paragraph
(c)(8) of this section if, after the transfer, the holding company and any of its
associate or affiliate companies in aggregate will own less than 10 percent of
the outstanding voting interests of
such public utility.
(14) A public utility is granted a blanket
authorization
under
section
203(a)(1) of the Federal Power Act to

§ 33.1
transfer its outstanding voting securities to any holding company granted
blanket authorization in paragraph
(c)(9) of this section.
(15) A public utility is granted a blanket
authorization
under
section
203(a)(1) of the Federal Power Act to
transfer its outstanding voting securities to any holding company granted
blanket authorization in paragraph
(c)(10) of this section.
(16) A public utility is granted a blanket
authorization
under
section
203(a)(1) of the Federal Power Act for
the acquisition or disposition of a jurisdictional contract where neither the
acquirer nor transferor has captive customers or owns or provides transmission service over jurisdictional
transmission facilities, the contract
does not convey control over the operation of a generation or transmission
facility, and the acquirer is a public
utility.
(17) A public utility granted blanket
authorization
under
paragraph
(c)(12)(ii) of this section to transfer its
outstanding voting securities shall,
within 30 days after the end of the calendar quarter in which such transfer
has occurred, file with the Commission
a report containing the following information:
(i) The names of all parties to the
transaction;
(ii) Identification of the pre- and
post-transaction voting security holdings (and percentage ownership) in the
public utility held by the acquirer and
its associate or affilate companies;
(iii) The date the transaction was
consummated;
(iv) Identification of any public utility or holding company affiliates of the
parties to the transaction; and
(v) A statement indicating that the
proposed transaction will not result in,
at the time of the transaction or in the
future, cross-subsidization of a nonutility associate company or pledge or
encumbrance of utility assets for the
benefit of an associate company as required in § 33.2(j)(1).
[Order 669–A, 71 FR 28443, May 16, 2006, as
amended by Order 708, 73 FR 11013, Feb. 29,
2008; Order 708–A, 73 FR 43072, July 24, 2008;
Order 708–B, 74 FR 25413, May 28, 2009]

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§ 33.2

18 CFR Ch. I (4–1–18 Edition)

§ 33.2 Contents of application—general
information requirements.
Each applicant must include in its
application, in the manner and form
and in the order indicated, the following general information with respect to the applicant and each entity
whose jurisdictional facilities or securities are involved:
(a) The exact name of the applicant
and its principal business address.
(b) The name and address of the person authorized to receive notices and
communications regarding the application, including phone and fax numbers,
and E-mail addresses.
(c) A description of the applicant, including:
(1) All business activities of the applicant, including authorizations by
charter or regulatory approval (to be
identified as Exhibit A to the application);
(2) A list of all energy subsidiaries
and energy affiliates, percentage ownership interest in such subsidiaries and
affiliates, and a description of the primary business in which each energy
subsidiary and affiliate is engaged (to
be identified as Exhibit B to the application);
(3) Organizational charts depicting
the applicant’s current and proposed
post-transaction corporate structures
(including any pending authorized but
not implemented changes) indicating
all parent companies, energy subsidiaries and energy affiliates unless the
applicant demonstrates that the proposed transaction does not affect the
corporate structure of any party to the
transaction (to be identified as Exhibit
C to the application);
(4) A description of all joint ventures,
strategic alliances, tolling arrangements or other business arrangements,
including transfers of operational control of transmission facilities to Commission approved Regional Transmission Organizations, both current,
and planned to occur within a year
from the date of filing, to which the applicant or its parent companies, energy
subsidiaries, and energy affiliates is a
party, unless the applicant demonstrates that the proposed transaction does not affect any of its business interests (to be identified as Exhibit D to the application);

(5) The identity of common officers
or directors of parties to the proposed
transaction (to be identified as Exhibit
E to the application); and
(6) A description and location of
wholesale power sales customers and
unbundled transmission services customers served by the applicant or its
parent companies, subsidiaries, affiliates and associate companies (to be
identified as Exhibit F to the application).
(d) A description of jurisdictional facilities owned, operated, or controlled
by the applicant or its parent companies, subsidiaries, affiliates, and associate companies (to be identified as Exhibit G to the application).
(e) A narrative description of the proposed transaction for which Commission authorization is requested, including:
(1) The identity of all parties involved in the transaction;
(2) All jurisdictional facilities and securities associated with or affected by
the transaction (to be identified as Exhibit H to the application);
(3) The consideration for the transaction; and
(4) The effect of the transaction on
such jurisdictional facilities and securities.
(f) All contracts related to the proposed transaction together with copies
of all other written instruments entered into or proposed to be entered
into by the parties to the transaction
(to be identified as Exhibit I to the application).
(g) A statement explaining the facts
relied upon to demonstrate that the
proposed transaction is consistent with
the public interest. The applicant must
include a general explanation of the effect of the transaction on competition,
rates and regulation of the applicant
by the Commission and state commissions with jurisdiction over any party
to the transaction. The applicant
should also file any other information
it believes relevant to the Commission’s consideration of the transaction.
The applicant must supplement its application promptly to reflect in its
analysis material changes that occur
after the date a filing is made with the

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Federal Energy Regulatory Commission
Commission, but before final Commission action. Such changes must be described and their effect on the analysis
explained (to be identified as Exhibit J
to the application).
(h) If the proposed transaction involves physical property of any party,
the applicant must provide a general or
key map showing in different colors
the properties of each party to the
transaction (to be identified as Exhibit
K to the application).
(i) If the applicant is required to obtain licenses, orders, or other approvals
from other regulatory bodies in connection with the proposed transaction,
the applicant must identify the regulatory bodies and indicate the status of
other regulatory actions, and provide a
copy of each order of those regulatory
bodies that relates to the proposed
transaction (to be identified as Exhibit
L to the application). If the regulatory
bodies issue orders pertaining to the
proposed transaction after the date of
filing with the Commission, and before
the date of final Commission action,
the applicant must supplement its
Commission application promptly with
a copy of these orders.
(j) An explanation, with appropriate
evidentiary support for such explanation (to be identified as Exhibit M to
this application):
(1) Of how applicants are providing
assurance, based on facts and circumstances known to them or that are
reasonably foreseeable, that the proposed transaction will not result in, at
the time of the transaction or in the future, cross-subsidization of a non-utility associate company or pledge or encumbrance of utility assets for the benefit of an associate company, including:
(i) Disclosure of existing pledges and/
or encumbrances of utility assets; and
(ii) A detailed showing that the
transaction will not result in:
(A) Any transfer of facilities between
a traditional public utility associate
company that has captive customers or
that owns or provides transmission
service
over
jurisdictional
transmission facilities, and an associate
company;
(B) Any new issuance of securities by
a traditional public utility associate
company that has captive customers or

§ 33.3
that owns or provides transmission
service
over
jurisdictional
transmission facilities, for the benefit of an
associate company;
(C) Any new pledge or encumbrance
of assets of a traditional public utility
associate company that has captive
customers or that owns or provides
transmission service over jurisdictional transmission facilities, for the
benefit of an associate company; or
(D) Any new affiliate contract between a non-utility associate company
and a traditional public utility associate company that has captive customers or that owns or provides transmission service over jurisdictional
transmission facilities, other than nonpower goods and services agreements
subject to review under sections 205
and 206 of the Federal Power Act; or
(2) If no such assurance can be provided, an explanation of how such
cross-subsidization, pledge, or encumbrance will be consistent with the public interest.
[Order 642, 65 FR 71014, Nov. 28, 2000, as
amended by Order 669–A, 71 FR 28446, May 16,
2006; Order 669–B, 71 FR 42586, July 27, 2006;
Order 659–B, 71 FR 45736, Aug. 10, 2006]

§ 33.3 Additional information requirements for applications involving
horizontal competitive impacts.
(a)(1) The applicant must file the horizontal Competitive Analysis Screen
described in paragraphs (b) through (f)
of this section if, as a result of the proposed transaction, a single corporate
entity obtains ownership or control
over the generating facilities of previously unaffiliated merging entities
(for purposes of this section, merging
entities means any party to the proposed transaction or its parent companies, energy subsidiaries or energy affiliates).
(2) A horizontal Competitive Analysis
Screen need not be filed if the applicant:
(i) Affirmatively demonstrates that
the merging entities do not currently
conduct business in the same geographic markets or that the extent of
the business transactions in the same
geographic markets is de minimis; and

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§ 33.3

18 CFR Ch. I (4–1–18 Edition)

(ii) No intervenor has alleged that
one of the merging entities is a perceived potential competitor in the
same geographic market as the other.
(b) All data, assumptions, techniques
and conclusions in the horizontal Competitive Analysis Screen must be accompanied by appropriate documentation and support.
(1) If the applicant is unable to provide any specific data required in this
section, it must identify and explain
how the data requirement was satisfied
and the suitability of the substitute
data.
(2) The applicant may provide other
analyses for defining relevant markets
(e.g. the Hypothetical Monopolist Test
with or without the assumption of
price discrimination) in addition to the
delivered price test under the horizontal Competitive Analysis Screen.
(3) The applicant may use a computer
model to complete one or more steps in
the horizontal Competitive Analysis
Screen. The applicant must fully explain, justify and document any model
used and provide descriptions of model
formulation, mathematical specifications, solution algorithms, as well as
the annotated model code in executable form, and specify the software
needed to execute the model. The applicant must explain and document
how inputs were developed, the assumptions underlying such inputs and
any adjustments made to published
data that are used as inputs. The applicant must also explain how it tested
the predictive value of the model, for
example, using historical data.
(c) The horizontal Competitive Analysis Screen must be completed using
the following steps:
(1) Define relevant products. Identify
and define all wholesale electricity
products sold by the merging entities
during the two years prior to the date
of the application, including, but not
limited to, non-firm energy, short-term
capacity (or firm energy), long-term
capacity (a contractual commitment of
more than one year), and ancillary
services (specifically spinning reserves,
non-spinning reserves, and imbalance
energy, identified and defined separately). Because demand and supply
conditions for a product can vary substantially over the year, periods cor-

responding to those distinct conditions
must be identified by load level, and
analyzed as separate products.
(2) Identify destination markets. Identify each wholesale power sales customer or set of customers (destination
market) affected by the proposed transaction. Affected customers are, at a
minimum, those entities directly interconnected to any of the merging entities and entities that have purchased
electricity at wholesale from any of
the merging entities during the two
years prior to the date of the application. If the applicant does not identify
an entity to whom the merging entities
have sold electricity during the last
two years as an affected customer, the
applicant must provide a full explanation for each exclusion.
(3) Identify potential suppliers. The applicant must identify potential suppliers to each destination market using
the delivered price test described in
paragraph (c)(4) of this section. A seller
may be included in a geographic market to the extent that it can economically and physically deliver generation
services to the destination market.
(4) Perform delivered price test. For
each destination market, the applicant
must calculate the amount of relevant
product a potential supplier could deliver to the destination market from
owned or controlled capacity at a
price, including applicable transmission prices, loss factors and ancillary services costs, that is no more
than five (5) percent above the pretransaction market clearing price in
the destination market.
(i) Supplier’s presence. The applicant
must measure each potential supplier’s
presence in the destination market in
terms of generating capacity, using
economic capacity and available economic capacity measures. Additional
adjustments to supplier presence may
be presented; applicants must support
any such adjustment.
(A) Economic capacity means the
amount of generating capacity owned
or controlled by a potential supplier
with variable costs low enough that energy from such capacity could be economically delivered to the destination
market. Prior to applying the delivered
price test, the generating capacity

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Federal Energy Regulatory Commission
meeting this definition must be adjusted by subtracting capacity committed under long-term firm sales contracts and adding capacity acquired
under long-term firm purchase contracts (i.e., contracts with a remaining
commitment of more than one year).
The capacity associated with any such
adjustments must be attributed to the
party that has authority to decide
when generating resources are available for operation. Other generating
capacity may also be attributed to another supplier based on operational
control criteria as deemed necessary,
but the applicant must explain the reasons for doing so.
(B) Available economic capacity means
the amount of generating capacity
meeting the definition of economic capacity less the amount of generating
capacity needed to serve the potential
supplier’s native load commitments, as
described in paragraph (d)(4)(i) of this
section.
(C) Available transmission capacity.
Each potential supplier’s economic capacity and available economic capacity
(and any other measure used to determine the amount of relevant product
that could be delivered to a destination
market) must be adjusted to reflect
available transmission capability to
deliver each relevant product. The allocation to a potential supplier of limited capability of constrained transmission paths internal to the merging
entities’ systems or interconnecting
the systems with other control areas
must recognize both the transmission
capability not subject to firm reservations by others and any firm transmission rights held by the potential
supplier that are not committed to
long-term transactions. For each such
instance where limited transmission
capability must be allocated among potential suppliers, the applicant must
explain the method used and show the
results of such allocation.
(D) Internal interface. If the proposed
transaction would cause an interface
that interconnects the transmission
systems of the merging entities to become transmission facilities for which
the merging entities would have a
‘‘native load’’ priority under their open
access transmission tariff (i.e., where
the merging entities may reserve exist-

§ 33.3
ing transmission capacity needed for
native load growth and network transmission customer load growth reasonable forecasted within the utility’s current planning horizon), all of the unreserved capability of the interface must
be allocated to the merging entities for
purposes of the horizontal Competitive
Analysis Screen, unless the applicant
demonstrates one of the following:
(1) The merging entities would not
have adequate economic capacity to
fully use such unreserved transmission
capability;
(2) The merging entities have committed a portion of the interface capability to third parties; or
(3) Suppliers other than the merging
entities have purchased a portion of
the interface capability.
(ii) [Reserved]
(5) Calculate market concentration. The
applicant must calculate the market
share, both pre- and post-merger, for
each potential supplier, the HerfindahlHirschman Index (HHI) statistic for the
market, and the change in the HHI statistic. (The HHI statistic is a measure
of market concentration and is a function of the number of firms in a market
and their respective market shares.
The HHI statistic is calculated by summing the squares of the individual market shares, expressed as percentages, of
all potential suppliers to the destination market.) To make these calculations, the applicant must use the
amounts of generating capacity (i.e.,
economic capacity and available economic capacity, and any other relevant
measure) determined in paragraph
(c)(4)(i) of this section, for each product in each destination market.
(6) Provide historical transaction data.
The applicant must provide historical
trade data and historical transmission
data to corroborate the results of the
horizontal
Competitive
Analysis
Screen. The data must cover the twoyear period preceding the filing of the
application. The applicant may adjust
the results of the horizontal Competitive Analysis Screen, if supported by
historical trade data or historical
transmission service data. Any adjusted results must be shown separately, along with an explanation of all
adjustments to the results of the horizontal Competitive Analysis Screen.

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§ 33.3

18 CFR Ch. I (4–1–18 Edition)

The applicant must also provide an explanation of any significant differences
between results obtained by the horizontal Competitive Analysis Screen
and trade patterns in the last two
years.
(d) In support of the delivered price
test required by paragraph (c)(4) of this
section, the applicant must provide the
following data and information used in
calculating the economic capacity and
available economic capacity that a potential supplier could deliver to a destination market. The transmission
data required by paragraphs (d)(7)
through (d)(9) of this section must be
supplied for the merging entities’ systems. The transmission data must also
be supplied for other relevant systems,
to the extent data are publicly available.
(1) Generation capacity. For each generating plant or unit owned or controlled by each potential supplier, the
applicant must provide:
(i) Supplier name;
(ii) Name of the plant or unit;
(iii) Primary and secondary fueltypes;
(iv) Nameplate capacity;
(v) Summer and winter total capacity; and
(vi) Summer and winter capacity adjusted to reflect planned and forced
outages and other factors, such as fuel
supply and environmental restrictions.
(2) Variable cost. For each generating
plant or unit owned or controlled by
each potential supplier, the applicant
must also provide variable cost components.
(i) These cost components must include at a minimum:
(A) Variable operation and maintenance, including both fuel and non-fuel
operation and maintenance; and
(B) Environmental compliance.
(ii) To the extent costs described in
paragraph (d)(2)(i) of this section are
allocated among units at the same
plant, allocation methods must be fully
described.
(3) Long-term purchase and sales data.
For each sale and purchase of capacity,
the applicant must provide the following information:
(i) Purchasing entity name;
(ii) Selling entity name;
(iii) Duration of the contract;

(iv) Remaining contract term and
any evergreen provisions;
(v) Provisions regarding renewal of
the contract;
(vi)
Priority
or
degree
of
interruptibility;
(vii) FERC rate schedule number, if
applicable;
(viii) Quantity and price of capacity
and/or energy purchased or sold under
the contract; and
(ix) Information on provisions of contracts which confer operational control
over generation resources to the purchaser.
(4) Native load commitments. (i) Native
load commitments are commitments
to serve wholesale and retail power
customers on whose behalf the potential supplier, by statute, franchise, regulatory requirement, or contract, has
undertaken an obligation to construct
and operate its system to meet their
reliable electricity needs.
(ii) The applicant must provide supplier name and hourly native load commitments for the most recent two
years. In addition, the applicant must
provide this information for each load
level, if load-differentiated relevant
products are analyzed.
(iii) If data on native load commitments are not available, the applicant
must fully explain and justify any estimates of these commitments.
(5) Transmission and ancillary service
prices, and loss factors. (i) The applicant
must use in the horizontal Competitive
Analysis Screen the maximum rates
stated in the transmission providers’
tariffs. If necessary, those rates should
be converted to a dollars-per-megawatt
hour basis and the conversion method
explained.
(ii) If a regional transmission pricing
regime is in effect that departs from
system-specific transmission rates, the
horizontal
Competitive
Analysis
Screen must reflect the regional pricing regime.
(iii) The following data must be provided for each transmission system
that would be used to deliver energy
from each potential supplier to a destination market:
(A) Supplier name;
(B) Name of transmission system;
(C) Firm point-to-point rate;
(D) Non-firm point-to-point rate;

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Federal Energy Regulatory Commission
(E) Scheduling, system control and
dispatch rate;
(F) Reactive power/voltage control
rate;
(G) Transmission loss factor; and
(H) Estimated cost of supplying energy losses.
(iv) The applicant may present additional alternative analysis using discount prices if the applicant can support it with evidence that discounting
is and will be available.
(6) Destination market price. The applicant must provide, for each relevant
product and destination market, market prices for the most recent two
years. The applicant may provide suitable proxies for market prices if actual
market prices are unavailable. Estimated prices or price ranges must be
supported and the data and approach
used to estimate the prices must be included with the application. If the applicant relies on price ranges in the
analysis, such ranges must be reconciled with any actual market prices
that are supplied in the application.
Applicants must demonstrate that the
results of the analysis do not vary significantly in response to small variations in actual and/or estimated
prices.
(7) Transmission capability. (i) The applicant must provide simultaneous
transfer capability data, if available,
for each of the transmission paths,
interfaces, or other facilities used by
suppliers to deliver to the destination
markets on an hourly basis for the
most recent two years.
(ii) Transmission capability data
must include the following information:
(A) Transmission path, interface, or
facility name;
(B) Total transfer capability (TTC);
and
(C) Firm available transmission capability (ATC).
(iii) Any estimated transmission capability must be supported and the
data and approach used to make the estimates must be included with the application.
(8) Transmission constraints. (i) For
each existing transmission facility
that affects supplies to the destination
markets and that has been constrained
during the most recent two years or is

§ 33.3
expected to be constrained within the
planning horizon, the applicant must
provide the following information:
(A) Name of all paths, interfaces, or
facilities affected by the constraint;
(B) Locations of the constraint and
all paths, interfaces, or facilities affected by the constraint;
(C) Hours of the year when the transmission constraint is binding; and
(D) The system conditions under
which the constraint is binding.
(ii) The applicant must include information regarding expected changes in
loadings on transmission facilities due
to the proposed transaction and the
consequent effect on transfer capability.
(iii) To the extent possible, the applicant must provide system maps showing the location of transmission facilities where binding constraints have
been known or are expected to occur.
(9) Firm transmission rights (Physical
and Financial). For each potential supplier to a destination market that
holds firm transmission rights necessary to directly or indirectly deliver
energy to that market, or that holds
transmission congestion contracts, the
applicant must provide the following
information:
(i) Supplier name;
(ii) Name of transmission path interface, or facility;
(iii) The FERC rate schedule number,
if applicable, under which transmission
service is provided; and
(iv) A description of the firm transmission rights held (including, at a
minimum, quantity and remaining
time the rights will be held, and any
relevant time restrictions on transmission use, such as peak or off-peak
rights).
(10) Summary table of potential suppliers’ presence. (i) The applicant must
provide a summary table with the following information for each potential
supplier for each destination market:
(A) Potential supplier name;
(B) The potential supplier’s total
amount of economic capacity (not subject to transmission constraints); and
(C) The potential supplier’s amount
of economic capacity from which energy can be delivered to the destination market (after adjusting for transmission availability).

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§ 33.4

18 CFR Ch. I (4–1–18 Edition)

(ii) A similar table must be provided
for available economic capacity, and
for any other generating capacity
measure used by the applicant.
(11) Historical trade data. (i) The applicant must provide data identifying all
of the merging entities’ wholesale sales
and purchases of electric energy for the
most recent two years.
(ii) The applicant must include the
following information for each transition:
(A) Type of transaction (such as nonfirm, short-term firm, long-term firm,
peak, off-peak, etc.);
(B) Name of purchaser;
(C) Name of seller;
(D) Date, duration and time period of
the transaction;
(E) Quantity of energy purchased or
sold;
(F) Energy charge per unit;
(G) Megawatt hours purchased or
sold;
(H) Price; and
(I) The delivery points used to effect
the sale or purchase.
(12) Historical transmission data. The
applicant must provide information
concerning any transmission service
denials, interruptions and curtailments
on the merging entities’ systems, for
the most recent two years, to the extent the information is available from
OASIS data, including the following information:
(i) Name of the customer denied, interrupted or curtailed;
(ii) Type, quantity and duration of
service at issue;
(iii) The date and period of time involved;
(iv) Reason given for the denial,
interruption or curtailment;
(v) The transmission path; and
(vi) The reservations or other use anticipated on the affected transmission
path at the time of the service denial,
curtailment or interruption.
(e) Mitigation. Any mitigation measures proposed by the applicant (including, for example, divestiture or participation in a regional transmission organization) which are intended to mitigate the adverse effect of the proposed
transaction must, to the extent possible, be factored into the horizontal
Competitive Analysis Screen as an additional post-transaction analysis. Any

mitigation commitments that involve
facilities (e.g., in connection with divestiture of generation) must identify
the facilities affected by the commitment, along with a timetable for implementing the commitments.
(f) Additional factors. If the applicant
does not propose mitigation, the applicant must address:
(1) The potential adverse competitive
effects of the transaction.
(2) The potential for entry in the
market and the role that entry could
play in mitigating adverse competitive
effects of the transaction;
(3) The efficiency gains that reasonably could not be achieved by other
means; and
(4) Whether, but for the transaction,
one or more of the merging entities
would be likely to fail, causing its assets to exit the market.
[65 FR 71014, Nov. 28, 2000; 65 FR 76005, Dec.
5, 2000]

§ 33.4 Additional information requirements for applications involving
vertical competitive impacts.
(a)(1) The applicant must file the
vertical Competitive Analysis described in paragraphs (b) through (e) of
this section if, as a result of the proposed transaction, a single corporate
entity has ownership or control over
one or more merging entities that provides inputs to electricity products and
one or more merging entities that provides electric generation products (for
purposes of this section, merging entities means any party to the proposed
transaction or its parent companies,
energy subsidiaries or energy affiliates).
(2) A vertical Competitive Analysis
need not be filed if the applicant can
affirmatively demonstrate that:
(i) The merging entities currently do
not provide inputs to electricity products (i.e., upstream relevant products)
and electricity products (i.e., downstream relevant products) in the same
geographic markets or that the extent
of the business transactions in the
same geographic market is de minimis;
and no intervenor has alleged that one
of the merging entities is a perceived
potential competitor in the same geographic market as the other.

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Federal Energy Regulatory Commission
(ii) The extent of the upstream relevant products currently provided by
the merging entities is used to produce
a de minimis amount of the relevant
downstream products in the relevant
destination markets, as defined in
paragraph (c)(2) of § 33.3.
(b) All data, assumptions, techniques
and conclusions in the vertical Competitive Analysis must be accompanied
by appropriate documentation and support.
(c) The vertical Competitive Analysis
must be completed using the following
steps:
(1) Define relevant products—(i) Downstream relevant products. The applicant
must identify and define as downstream relevant products all products
sold by merging entities in relevant
downstream geographic markets, as
outlined in paragraph (c)(1) of § 33.3.
(ii) Upstream relevant products. The
applicant must identify and define as
upstream relevant products all inputs
to electricity products provided by upstream merging entities in the most recent two years.
(2) Define geographic markets—(i)
Downstream geographic markets. The applicant must identify all geographic
markets in which it or any merging entities sell the downstream relevant
products, as outlined in paragraphs
(c)(2) and (c)(3) of § 33.3.
(ii) Upstream geographic markets The
applicant must identify all geographic
markets in which it or any merging entities provide the upstream relevant
products.
(3) Analyze competitive conditions—(i)
Downstream geographic market. (A) The
applicant must compute market share
for each supplier in each relevant
downstream geographic market and
the HHI statistic for the downstream
market. The applicant must provide a
summary table with the following information for each relevant downstream geographic market:
(1) The economic capacity of each
downstream
supplier
(specify
the
amount of such capacity served by
each upstream supplier);
(2) The total amount of economic capacity in the downstream market
served by each upstream supplier;

§ 33.4
(3) The market share of economic capacity served by each upstream supplier; and
(4) The HHI statistic for the downstream market.
(B) A similar table must be provided
for available economic capacity and for
any other measure used by the applicant.
(ii) Upstream geographic market. The
applicant must provide a summary
table with the following information
for each upstream relevant product in
each relevant upstream geographic
market:
(A) The amount of relevant product
provided by each upstream supplier;
(B) The total amount of relevant
product in the market;
(C) The market share of each upstream supplier; and
(D) The HHI statistic for the upstream market.
(d) Mitigation. Any mitigation measures proposed by the applicant (including, for example, divestiture or participation in an Regional Transmission Organization) which are intended to mitigate the adverse effect of the proposed
transaction must, to the extent possible, be factored into the vertical competitive analysis as an additional posttransaction analysis. Any mitigation
measures that involve facilities must
identify the facilities affected by the
commitment.
(e) Additional factors. (1) If the applicant does not propose mitigation measures, the applicant must address:
(i) The potential adverse competitive
effects of the transaction.
(ii) The potential for entry in the
market and the role that entry could
play in mitigating adverse competitive
effects of the transaction;
(iii) The efficiency gains that reasonably could not be achieved by other
means; and
(iv) Whether, but for the proposed
transaction, one or more of the parties
to the transaction would be likely to
fail, causing its assets to exit the market.
(2) The applicant must address each
of the additional factors in the context
of whether the proposed transaction is
likely to present concerns about raising rivals’ costs or anticompetitive coordination.

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§ 33.5
§ 33.5

18 CFR Ch. I (4–1–18 Edition)
Proposed accounting entries.

If the applicant is required to maintain its books of account in accordance
with the Commission’s Uniform System of Accounts in part 101 of this
chapter, the applicant must present
proposed accounting entries showing
the effect of the transaction with sufficient detail to indicate the effects on
all
account
balances
(including
amounts transferred on an interim
basis), the effect on the income statement, and the effects on other relevant
financial statements. The applicant
must also explain how the amount of
each entry was determined.
§ 33.7

Verification.

The original application must be
signed by a person or persons having
authority with respect thereto and
having knowledge of the matters therein set forth, and must be verified under
oath.

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§ 33.8 Requirements for filing applications.
The applicant must submit the application or petition to the Secretary of
the Commission in accordance with filing procedures posted on the Commission’s Web site at http://www.ferc.gov.
(a) If the applicant seeks to protect
any portion of the application, or any
attachment thereto, from public disclosure, the applicant must make its
filing in accordance with the Commission’s instructions for submission of
privileged materials and Critical Energy Infrastructure Information in
§ 388.112 of this chapter.
(b) If required, the applicant must
submit information specified in paragraphs (b), (c), (d), (e) and (f) of § 33.3 or
paragraphs (b), (c), (d) and (e) of § 33.4
on electronic recorded media (i.e., CD/
DVD) in accordance with § 385.2011 of
this chapter, along with a printed description and summary. The printed
portion of the applicant’s submission
must include documentation for the
electronic information, including all
file names and a summary of the data
contained in each file. Each column (or
data item) in each separate data table
or chart must be clearly labeled in accordance with the requirements of
§§ 33.3 and 33.4. Any units of measure-

ment associated with numeric entries
must also be included.
[Order 769, 77 FR 65475, Oct. 29, 2012]

§ 33.9

[Reserved]

§ 33.10

Additional information.

The Director of the Office of Energy
Market Regulation, or his designee,
may, by letter, require the applicant to
submit additional information as is
needed for analysis of an application
filed under this part.
[Order 642, 65 FR 71014, Nov. 28, 2000, as
amended by Order 699, 72 FR 45324, Aug. 14,
2007; Order 701, 72 FR 61053, Oct. 29, 2007]

§ 33.11 Commission procedures for the
consideration of applications under
section 203 of the FPA.
(a) The Commission will act on a
completed application for approval of a
transaction (i.e., one that is consistent
with the requirements of this part) not
later than 180 days after the completed
application is filed. If the Commission
does not act within 180 days, such application shall be deemed granted unless the Commission finds, based on
good cause, that further consideration
is required to determine whether the
proposed transaction meets the standards of section 203(a)(4) of the FPA and
issues, by the 180th day, an order tolling the time for acting on the application for not more than 180 days, at the
end of which additional period the
Commission shall grant or deny the application.
(b) The Commission will provide for
the expeditious consideration of completed applications for the approval of
transactions that are not contested, do
not involve mergers, and are consistent
with Commission precedent.
(c) Transactions, provided that they
are not contested, do not involve mergers and are consistent with Commission precedent, that will generally be
subject to expedited review include:
(1) A disposition of only transmission
facilities, including, but not limited to,
those that both before and after the
transaction remain under the functional control of a Commission-approved regional transmission organization or independent system operator;
and

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Federal Energy Regulatory Commission
(2) Transactions that do not require
an Appendix A analysis; 1 and
(3) Internal corporate reorganizations
that result in the reorganization of a
traditional public utility that has captive customers or owns or provides
transmission service over jurisdictional transmission facilities, but do
not present cross-subsidization issues.
[Order 669–A, 71 FR 28446, May 16, 2006]

PART 34—APPLICATION FOR AUTHORIZATION OF THE ISSUANCE
OF SECURITIES OR THE ASSUMPTION OF LIABILITIES
Sec.
34.1 Applicability; definitions; exemptions
in case of certain State regulation, certain short-term issuances and certain
qualifying facilities.
34.2 Placement of securities.
34.3 Contents of application for issuance of
securities.
34.4 Required exhibits.
34.5 Additional information.
34.6 Form and style.
34.7 Filing requirements.
34.8 Verification.
34.9 Reports.
AUTHORITY: 16 U.S.C. 791a–825r, 2601–2645; 31
U.S.C. 9701; 42 U.S.C. 7101–7352.
SOURCE: Order 182, 46 FR 50514, Oct. 14, 1981,
unless otherwise noted.
CROSS REFERENCES: For rules of practice
and procedure, see part 385 of this chapter.
For Approved Forms, Federal Power Act, see
part 131 of this chapter.
OMB REFERENCE: ‘‘FERC Filing No. 523’’ is
the identification number used by the Commission and the Office of Management and
Budget to reference the filing requirements
in part 34.

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§ 34.1 Applicability; definitions; exemptions in case of certain State
regulation,
certain
short-term
issuances and certain qualifying facilities.
(a) Applicability. This part applies to
applications for authorization from the
Commission to issue securities or as1 Inquiry Concerning the Commission’s Merger
Policy Under the Federal Power Act; Policy
Statement, Order No. 592, 61 FR 68,595 (Dec. 30,
1996), FERC Stats. & Regs. ¶ 31,044 (1996), reconsideration denied, Order No. 592–A, 62 FR
33,340 (June 19, 1977), 79 FERC ¶ 61,321 (1997)
(Merger Policy Statement).

§ 34.1
sume an obligation or liability which
are filed by:
(1) Licensees and other entities pursuant to sections 19 and 20 of the Federal Power Act (41 Stat. 1073, 16 U.S.C.
812, 813) and part 20 of the Commission’s regulations; and
(2) Public utilities pursuant to section 204 of the Federal Power Act (49
Stat. 850, 16 U.S.C. 824c).
(b) Definitions. For the purpose of this
part:
(1) The term utility means a licensee,
public utility or other entity seeking
authorization under sections 19, 20 or
204 of the Federal Power Act;
(2) The term securities includes any
note, stock, treasury stock, bond, or
debenture or other evidence of interest
in or indebtedness of a utility;
(3) The term issuance or placement of
securities means issuance or placement
of securities, or assumption of obligation or liability; and
(4) The term State means a State admitted to the Union, the District of Columbia, and any organized Territory of
the United States.
(c) Exemptions. (1) If an agency of the
State in which the utility is organized
and operating approves or authorizes,
in writing, the issuance of securities
prior to their issuance, the utility is
exempt from the provisions of sections
19, 20 and 204 of the Federal Power Act
and the regulations under this part,
with respect to such securities.
(2) This part does not apply to the
issue or renewal of, or assumption of liability on, a note or draft maturing
one year or less after the date of such
issue, renewal, or assumption of liability, if the aggregate of such note or
draft and all other then-outstanding
notes and drafts of a maturity of one
year or less on which the utility is primarily or secondarily liable, is not
more than 5 percent of the par value of
the other then-outstanding securities
of the utility as of the date of issue or
renewal of, or assumption of liability
on, the note or draft. In the case of securities having no par value, the par
value for the purpose of this part is the
fair market value, as of the date of
issue or renewal of, or assumption of liability on, the note or draft.

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