1. Home
  2. |Insights
  3. |FERC Clarifies Affiliate Definition, Proposes Changes to Order No. 860 Requirements, and Delays Implementation

FERC Clarifies Affiliate Definition, Proposes Changes to Order No. 860 Requirements, and Delays Implementation

Client Alert | 2 min read | 03.22.21

As the Federal Energy Regulatory Commission (FERC) considers changes to Order No. 860 requirements, it has now delayed the order’s effectiveness for three months to July 1, 2021, and in so doing, it has clarified its definition of “Affiliate” for market-based rate (MBR) purposes. 

The goal of Order No. 860 is to create a relational database containing MBR seller information. Among other things, an MBR seller must identify its Ultimate Upstream Affiliate(s), which is the furthest upstream affiliate(s) in the MBR seller’s ownership/control chain. MBR sellers will be linked to their MBR affiliates through common Ultimate Upstream Affiliate(s) and, through this linkage, the relational database will allow for the automatic generation of asset appendices detailing affiliates of each MBR seller that own or control generation facilities and other inputs to production. 

FERC has now found that an institutional investor that acquires securities of a public utility (including for Order No. 860 purposes, an MBR seller) pursuant to a blanket authorization order under Section 203(a)(2) of the Federal Power Act (FPA) is an affiliate of such MBR seller and could potentially be an Ultimate Upstream Affiliate of the MBR Seller. However, FERC also found that because the conditions imposed in a 203(a)(2) blanket authorization order prevent such an institutional investor from exercising control over that MBR seller, MBR sellers commonly owned by an institutional investor are not affiliates of each other under so long as the institutional investor owner remains under the conditions imposed in its FPA § 203(a)(2) blanket authorization order and so long as there is no other circumstance that would make them affiliates, such as common control through another owner.

The relational database, as currently contemplated, does not provide for a method to distinguish Ultimate Upstream Affiliates that acquired (directly or indirectly) the securities of an MBR seller through an FPA § 203(a)(2) blanket authorization order. As such FERC proposes to require MBR sellers whose voting securities or those of an upstream affiliate have been acquired, 10% or more, pursuant to an FPA § 203(a)(2) blanket authorization, to identify the FPA § 203(a)(2) blanket authorization docket number, and the identity of the entity whose securities were purchased under that docket number. Comments on FERC’s proposal are due sixty days after publication of the request for comments in the Federal Register.

FERC’s new timeline for Order No. 860 compliance is linked here.

Contacts

Insights

Client Alert | 3 min read | 10.15.25

Clean Energy Project Developers Adapt Their Timelines and Strategies for Wind and Solar Projects Following Stricter Beginning of Construction Requirements and Expected IRS Enforcement Activity

On August 15, 2025, the Treasury Department and IRS released updated guidance concerning Beginning of Construction requirements to qualify for clean energy tax credits. This new guidance is critical for developers to consider as they rush to qualify for the tax credits before they expire entirely. The much-anticipated guidance followed the July 7, 2025 Executive Order 14315, Ending Market Distorting Subsidies for Unreliable, Foreign-Controlled Energy Sources (“July 7, 2025 Executive Order”), which signaled that the Trump Administration was planning to strictly enforce the termination of production and investment tax credits for solar and wind facilities that are set to expire under the One Big Beautiful Bill Act (OBBB Act), covered in more detail here. The new guidance comes at a time when many in the industry are struggling to keep up with the myriad ways that the new administration is working to roll back wind and solar tax credits, leaving developers to piece through the recent guidance to determine how best to structure and invest in clean energy projects given the volatile position of the current administration vis-a-vis wind and solar energy....

View All Insights