The Federal Energy Regulatory Commission has renewed BlackRock's authority to own large stakes in public power utilities.
FERC, an independent agency that regulates the interstate transmission of electricity, natural gas and oil, on April 17 approved BlackRock’s application to own up to 20% of the outstanding voting securities in a given public utility.
The renewal is in effect through April 2028. BlackRock, which reported $11.58 trillion in assets under management as of March 31, was granted the same approval by FERC in 2022.
“Based on applicants’ representations, we find that the reauthorization will not have an adverse effect on competition, rates, or regulation,” FERC wrote in its approval. “We continue to find that, with the conditions listed above, applicants will not have the ability to exercise control over the U.S. traded utilities it holds interests in.”
With the renewed blanket authorization, BlackRock can purchase or acquire $10 million in voting securities of any "public utility," "electric utility company," "transmitting utility" or "holding company in a holding company system that includes an electric utility company or transmitting utility." In its application, BlackRock noted that its individual funds will not own, control or hold 10% or more of the voting securities of any U.S. public utility, nor will the firm collectively own, control or hold more than 20% of a utility’s voting securities.
Under the Federal Power Act, any public utility holding company seeking to acquire more than $10 million in voting securities in another utility must secure an order from FERC authorizing it to do so.
In a statement, BlackRock welcomed FERC’s decision. “At a time when energy affordability and reliability are especially important, we look forward to continuing to provide billions of dollars in capital for the American energy sector on behalf of our clients,” the firm said.
In May 2023, a group of 17 Republican attorneys general filed a motion to intervene with FERC calling on the agency to audit whether BlackRock should have blanket authority to obtain more than $10 million in voting securities in multiple utility companies. The attorneys general cited concerns over BlackRock's environmental, social and governance policies.
Then in December 2023, FERC issued a notice of information to gather public feedback on whether large asset managers have too much power over the public utilities they control.
FERC Chair Mark Christie, a Republican, said in a statement that while he has concerns about BlackRock and other larger asset managers exerting control over the operational decisions of a public utility, he ultimately supported approving BlackRock’s application.
“We are faced with the reality that public utilities face already large and still growing capital needs, including to fund investment in greatly needed utility assets, such as power generation,” Christie said.
