UNITED STATES OF AMERICA BEFORE THE FEDERAL ENERGY REGULATORY COMMISSION
Indianapolis Power & Light Company ) Docket No. EC15-___-000 CDP Infrastructure Fund GP )
APPLICATION FOR AUTHORIZATION UNDER SECTION 203 OF THE FEDERAL POWER ACT AND REQUEST FOR EXPEDITED ACTION
PUBLIC VERSION PRIVILEGED AND CONFIDENTIAL INFORMATION OMITTED PURSUANT TO 18 C.F.R. § 388.112
Catherine P. McCarthy William B. Conway Jr. Bracewell & Giuliani LLP James P. Danly 2000 K Street N.W. Skadden, Arps, Slate, Suite 500 Meagher & Flom LLP Washington, D.C. 20006 1440 New York Avenue N.W. Tel: (202) 828-5839 Washington, DC 20005 [email protected] Tel: (202) 371-7135 [email protected] Counsel for CDP Infrastructure Fund GP Counsel for Indianapolis Power & Light Company
Paul Freedman Senior Corporate Counsel The AES Corporation 4300 Wilson Blvd. Arlington, VA 22203 Tel: (703) 682-1159 [email protected]
December 23, 2014
UNITED STATES OF AMERICA BEFORE THE FEDERAL ENERGY REGULATORY COMMISSION
Indianapolis Power & Light Company ) Docket No. EC15-___-000 CDP Infrastructure Fund GP )
APPLICATION FOR AUTHORIZATION UNDER SECTION 203 OF THE FEDERAL POWER ACT AND REQUEST FOR EXPEDITED ACTION
Pursuant to sections 203(a)(1) and 203(a)(2) of the Federal Power Act (“FPA”) 1 and Part
33 of the regulations of the Federal Energy Regulatory Commission (“FERC” or
“Commission”), 2 Indianapolis Power & Light Company (“IPL”), an indirect, wholly owned subsidiary of The AES Corporation (“AES”) and traditional public utility subject to the
Commission’s jurisdiction, and CDP Infrastructure Fund GP (“CDP Fund” and together with IPL the “Applicants”) submit this application (“Application”) requesting authorization for a financial transaction in which CDP Fund will purchase minority interests in the common stock of two of
IPL’s intermediate parent companies (the “Transaction”).
I. REQUEST FOR EXPEDITED CONSIDERATION
Applicants request that the Commission provide for a 21-day comment period 3 and further request the issuance of an order approving the Transaction no later than January 31, 2015 which will allow closing of the Transaction shortly thereafter. Expedited consideration of this
Application is warranted under 18 C.F.R. §§ 33.11(b) and (c) of the Commission’s regulations
1 16 U.S.C. § 824b(a)(1). 2 18 C.F.R. pt. 33. 3 See Transactions Subject to FPA Section 203 , Order No. 669, FERC Stats. & Regs. ¶ 31,200 (2005), order on reh’g, Order No. 669-A, FERC Stats. & Regs. ¶ 31,214 at P 155 (2006) (establishing a 21-day comment period for section 203 applications that do not require a detailed Appendix A analysis and that do not raise cross- subsidization concerns), order on reh’g , Order No. 669-B, FERC Stats. & Regs. ¶ 31,225 (2006) (collectively, “Order No. 669”). because the Transaction: (1) does not involve a merger; (2) is consistent with Commission precedent; and (3) does not require an Appendix A analysis. In addition, as explained below and in Exhibit M, the Transaction does not raise any cross-subsidization or encumbrance concerns.
II. REQUEST FOR PRIVILEGED AND CONFIDENTIAL TREATMENT
Pursuant to 18 C.F.R. § 388.112(b) of the Commission’s regulations, Applicants request confidential treatment for Exhibit I which contains the Purchase and Sale Agreement and the
Subscription Agreement, both dated December 14, 2014, pursuant to which the proposed
Transaction will occur. The information contained in Exhibit I is commercially sensitive and not publicly available, and disclosure of the information may cause substantial harm or result in a competitive disadvantage to Applicants and other parties. Applicants are electronically filing confidential and public versions of this Application and ask that the confidential version be placed in the Commission’s non-public files. Applicants understand that the Commission staff will notify them in advance of any public disclosure of any information contained in Exhibit I.
Any questions concerning this request for confidential treatment should be directed to the following:
Catherine P. McCarthy William B. Conway Jr. Bracewell & Giuliani LLP Skadden, Arps, Slate, 2000 K Street N.W. Meagher & Flom LLP Suite 500 1440 New York Avenue N.W. Washington, DC 20006 Washington, DC 20005 Tel: (202) 828-5839 Tel: (202) 371-7135 [email protected] [email protected]
As required by the Commission’s regulations, 4 Applicants have included as Attachment 1 to this Application a proposed protective order under which parties to the proceeding will be able to review the information for which privileged treatment is sought. The proposed form of
4 See 18 C.F.R. § 33.8.
2 protective order is identical to the Commission’s Model Protective Order.
III. DESCRIPTION OF THE APPLICANTS
A. IPL, AES and Affiliates
AES, a Delaware corporation, is a global power company that owns and operates both traditional utility and competitive generating business segments. AES’s worldwide assets include electric generation, transmission, and distribution facilities in 20 countries on five continents that generate annual revenues of approximately $16 billion and employ 17,800 people. In the United States, AES indirectly owns and operates over 11,700 MW of electric generation through competitive generating subsidiaries and two traditional utilities, IPL and The
Dayton Power and Light Company. AES is a holding company under the Public Utility Holding
Company Act of 2005 (“PUHCA 2005”).
IPL, an Indiana corporation, operates within the geographic footprint of the Midcontinent
Independent System Operator, Inc. (“MISO”) as a traditional, vertically-integrated electric utility primarily engaged in the generation, transmission, and distribution of electric power to retail customers in metropolitan Indianapolis and portions of other surrounding central Indiana communities. IPL owns and operates electric generating stations with an aggregate capacity of approximately 3,100 MW (summer rating), and these stations are the only electric generation facilities controlled by AES, IPL or their affiliates within the MISO balancing authority area
(“BAA”). IPL’s electric transmission system is under the operational control of MISO and consists of 345 kV, 138 kV, and 34.5 kV lines designed and constructed to transfer IPL’s generation to serve retail load. IPL has no captive or bundled wholesale customers, and IPL has
3 received FERC authorization to make wholesale sales of electric energy at market-based rates. 5
IPL’s retail operations are subject to regulation by the Indiana Utility Regulatory Commission
(“IURC”).
All of the common stock of IPL is indirectly owned by AES through a chain of intermediate holding companies. AES owns 100% of the membership interests in AES U.S.
Holdings, LLC (“AES Holdings”), a Delaware limited liability company, and AES Holdings in turn owns 100% of the stock of AES U.S. Investments, Inc. (“AES Investments”), an Indiana corporation. AES Investments owns 100% of the stock of IPALCO Enterprises, Inc.
(“IPALCO”), an Indiana corporation, and IPALCO in turn owns 100% of the common stock of
IPL. AES Holdings and AES Investments have recently been interposed in the ownership chain of IPL for purposes of the Transaction pursuant to the blanket authorization for corporate reorganizations under 18 C.F.R. § 33.1(c)(6). IPL is the sole material asset of AES Holdings,
AES Investments and IPALCO.
B. CDP Fund and U.S. Energy Investments
CDP Fund is a New York general partnership and investment fund that holds a variety of energy investments in the U.S. CDP Fund is a wholly-owned subsidiary of Caisse de dépôt et placement du Québec (“the Caisse”).
The Caisse, which manages public and private pension funds in the Province of Québec, was founded in 1965 by an act of the National Assembly of Canada and is organized under the laws of Québec.
5 See Indianapolis Power & Light Co. , 90 FERC ¶ 61,180 (2000); Indianapolis Power & Light Co. , Docket No. ER00-1026-001, Unpublished Letter Order (May 16, 2000).
4 The Caisse owns an indirect, controlling interest in Gaz Métro Limited Partnership (“Gaz
Métro”), the principal distributor of natural gas in the Province of Québec. Gaz Métro in turn owns (i) an indirect 100% ownership interest in Green Mountain Power Corporation, a vertically integrated electric utility in the state of Vermont that has interests in several FERC-jurisdictional entities operating in New England and is subject to regulation by the Vermont Public Service
Board, (ii) an indirect 100% ownership interest in Vermont Gas Systems, Inc., a local distribution company engaged in the distribution of natural gas in Vermont subject to regulation by the Vermont Public Service Board, and (iii) a minority interest in Portland Natural Gas
Transmission System, an interstate pipeline with pipeline facilities in Maine and adjacent areas of eastern New England.
The Caisse also indirectly owns interests in upstream oil and natural gas working interests or facilities in the U.S. and a 16.55% indirect, ownership interest in Colonial Pipeline
Company. The Colonial pipeline system delivers liquid petroleum products (including but not limited to gasoline, diesel fuel and home heating oil) from supply centers in the Gulf Coast to customers located on the Eastern seaboard of the United States.
Finally, the Caisse owns indirect, non-controlling interests in various public utilities throughout the U.S.
The only direct or indirect interests of the Caisse, or any of its affiliates including CDP
Fund, in electric generation in the MISO market that exceed 9.99% result from the Caisse’s ownership of an indirect 24.73% ownership interest in Invenergy Wind LLC (“Invenergy
Wind”), a developer, owner and operator of wind projects. Within the MISO BAA, Invenergy
Wind indirectly owns, wholly or partially, the following public utilities: Bishop Hill Energy III
5 LLC, 6 Bishop Hill Interconnection LLC, 7 California Ridge Wind Energy LLC, 8 Forward Energy
LLC, 9 Gratiot County Wind LLC 10 and Gratiot County Wind II LLC. 11 These companies own a
6 Bishop Hill Energy III LLC (“BH III”) is developing and plans to construct, own and operate wind- powered electric generation facilities of up to 136 MW (nameplate) that will be located in Henry County, Illinois. The Commission has granted BH III market-based rate authority and waivers from the Commission’s open access transmission requirements. See Bishop Hill Energy LLC , 137 FERC ¶61,211 (2011). BH III is an EWG. See Docket No. EG11-102-000. 7 Bishop Hill Interconnection (“BH Interconnection”) owns undivided interests in certain interconnection poles with an affiliate and owns an approximately 28 mile generator-tie line, a substation and related facilities (the “BH Interconnection Facilities”) that connect to the Ameren transmission system. Pursuant to a common facilities agreement that the Commission has accepted for filing under FPA section 205, BH III will have the right to interconnect its generation project to the BH Interconnection Facilities and deliver its power through such facilities to the MISO transmission system. The Commission has granted BH Interconnection waivers from the Commission’s open access transmission requirements. See Bishop Hill Interconnection LLC, 138 FERC ¶61,159 (2012); Bishop Hill Interconnection LLC , Docket No. ER12-845-000, et al. (Compliance filing Apr. 5, 2012). BH Interconnection does not sell power but is an EWG. See Docket No. EG12-24-000. 8 California Ridge Wind Energy LLC (“California Ridge”) owns and operates a 217.08 MW (nameplate) wind-powered electric generation facility located in Vermilion and Champaign Counties, Illinois (the “California Ridge Project”). The Commission has granted California Ridge market-based rate authority and waivers from the Commission’s open access transmission requirements with respect to the limited interconnection facilities that California Ridge owns to connect the California Ridge Project to Ameren’s transmission system. See California Ridge Wind Energy LLC, 139 FERC ¶ 61,019 (2012). California Ridge is an EWG. See Docket No. EG12-21-000. 9 Forward Energy LLC (“Forward Energy”) owns and operates a 129.35 MW (nameplate) wind-powered generation facility located in Dodge and Fond Du Lac Counties, Wisconsin, together with limited interconnection facilities that connect its generation facility to the transmission system owned by American Transmission Company, LLC which is under the control of MISO. The Commission has granted Forward Energy market-based rate authority. See Forward Energy LLC , Docket No. ER08-237-000 (Letter order issued Jan. 9, 2008) . Forward Energy is an EWG. See Docket No. EG07-58-000. 10 Gratiot County Wind LLC (“Gratiot I”) owns and operates wind-powered electric generation facilities consisting of up to 69 wind turbines with capacity of up to 110.4 MW (nameplate), located in Gratiot County, Michigan (the “Gratiot I Project”). The Gratiot I Project is interconnected with the transmission system owned by Michigan Electric Transmission Company LLC and controlled by MISO through interconnection facilities in which Gratiot I owns interests pursuant to a co-tenancy agreement. See The Detroit Edison Co., et al. , 136 FERC ¶61,210 (2011). The Commission issued letter orders to Gratiot I and Gratiot County Wind II LLC in Docket Nos. ER12- 853-000 and ER12-854-000, accepting modifications to the co-tenancy agreement.10 The Commission has granted Gratiot I waivers from the Commission’s open access transmission requirements. See The Detroit Edison Co. , 136 FERC ¶61,210 (2011). The Commission has granted Gratiot I market-based rate authority. See Gratiot County Wind LLC , Docket Nos. ER11-4044-000, et al. (Letter order issued Aug. 16, 2011). Gratiot I is an EWG. See Docket No. EG11-49-000. 11 Gratiot I may transfer up to 6 wind turbines with a capacity of up to 9.6 MW (nameplate) to Gratiot County Wind II LLC (“Gratiot II”). If such transfer occurs, the transferred wind generation facilities will be owned and operated by Gratiot II (the “Gratiot II Project”), and the size of the Gratiot I Project will decrease by the amount of the generation capacity of the turbines that Gratiot I transfers to Gratiot II. The Commission has granted Gratiot II waivers from the Commission’s open access transmission requirements. See The Detroit Edison Co. , 136 FERC ¶61,210 (2011). The Commission has granted Gratiot II market-based rate authority. See Gratiot County Wind LLC , Docket Nos. ER11-4044-000, et al. (Letter order issued Aug. 16, 2011). Gratiot II is an EWG. See Docket No. EG11-105-000.
6 total of approximately 456 MW of wind powered electric generation in operation and 136 MW in development along with related interconnection facilities.
The Caisse’s interests in Invenergy Wind are entirely passive. The Commission has recently accepted market-based rate filings by affiliates of Invenergy Wind based in part on the passive nature of the Caisse’s interests. 12
IV. DESCRIPTION OF THE TRANSACTION
A. The Transaction
The Transaction for which approval is sought will occur in two steps. In the first step, pursuant to the Purchase and Sale Agreement between AES Holdings and CDP Fund, CDP Fund will pay cash consideration of approximately $244,000,000 to AES Holdings for the acquisition of 15% of the common stock of AES Investments.. In the second step, pursuant to the terms of the Subscription Agreement between CDP Fund and IPALCO, at the time of closing of the
Purchase and Sale Agreement CDP Fund will purchase a nominal amount of IPALCO stock and thereafter make capital contributions to IPALCO in an amount up to approximately
$349,000,000 in response to the issuance of one or more capital calls from IPALCO. IPALCO will issue shares of its common stock to CDP Fund in return for each capital contribution in a total amount of up to 17.65% of IPALCO’s total outstanding common stock. As a result of the purchase of the stock of AES Investments pursuant to the Purchase and Sale Agreement and the acquisition of the stock of IPALCO pursuant to the Subscription Agreement, CDP Fund will acquire an attributable, indirect ownership interest in IPL ranging from approximately 15% to
30% depending upon capital calls made by IPALCO.
12 See Grand Ridge Energy Storage LLC , 149 FERC ¶ 61,102 (2014); Beech Ridge Energy LLC, Docket No. ER10-2137-009 et al. (Letter order issued Dec. 16, 2014).
7 At the closing of the Purchase and Sale Agreement, CDP Fund, AES Holdings and AES
Investments will enter into a shareholders agreement (the “AES Investments Shareholders
Agreement”) under which CDP Fund will have the right to nominate 2 directors (subject to reduction upon a reduction in CDP Fund’s ownership stake), and AES Holdings will have the right to nominate 9 directors to the AES Investments board of directors. The AES Investments
Shareholders’ Agreement contains restrictions on the making of certain major decisions by AES
Investments without the prior affirmative vote of a majority of the AES Investments board of directors. As long as CDP Fund holds at least 5% of the stock of AES Investments, CDP Fund will have certain budget review rights, as well as the right to input regarding the replacement of the IPL President or the replacement or appointment of the IPL CFO in certain circumstances.
Certain transfer restrictions and transfer rights apply to CDP Fund and AES Holdings under the
AES Investments Shareholders Agreement, including certain rights of first offer, rights of first refusal, put rights, drag along rights, and tag along rights.
At the closing of the initial nominal investment under the Subscription Agreement, CDP
Fund, AES Investments and IPALCO will also enter into a shareholders agreement (“IPALCO
Shareholders Agreement”). Under the IPALCO Shareholders Agreement, the IPALCO board of director at closing will consist of 15 directors, 2 nominated by CDP Fund, 12 nominated by AES
Investments and 1 independent director. However, after discussions with rating agencies, AES
Investments may elect to eliminate the requirement for an independent director (which director was put in place initially at the rating agencies’ request) in which case the IPALCO board of directors would consist of 11 directors, 2 nominated by CDP Fund and 9 nominated by AES
Investments. The IPALCO Shareholders Agreement generally contains substantially similar restrictions and rights as those contained in the AES Investments Shareholders Agreement,
8 including restrictions regarding major decision, budget review rights, President and CFO replacement and appointment, put rights and transfer restrictions.
In sum, under the Transaction CDP Fund will become an indirect, minority investor in
IPL having certain investor protection rights, and AES will retain majority ownership and control.
B. Jurisdictional Assets of IPL
The jurisdictional assets of IPL consist of its market-based rate tariff and other rate schedules on file with the Commission, associated books, records, and accounts, transmission facilities, and (to the extent provided in FPA section 203(a)(1)(D)) its electric generation facilities.
C. Commission Jurisdiction
Under Commission precedent, there is a rebuttable presumption that the indirect acquisition of 10% or more of IPL’s voting securities in the Transaction will result in an indirect change in control over IPL and thus a disposition of its jurisdictional facilities for purposes of
FPA section 203(a)(1). 13 Accordingly, Applicants request approval of the Transaction under section 203(a)(1).
For purposes of PUHCA 2005 the Caisse is a foreign governmental authority not operating in the United States and is therefore exempt from regulatory provisions applicable to holding companies under section 1268 of PUHCA 2005.14 The Caisse therefore believes that it
13 See FPA Section 203 Supplemental Policy Statement , FERC Stats. & Regs. ¶ 31,253 at PP 57-58 (2007) (“ Supplemental Policy Statement ”), order on clarification , 122 FERC ¶ 61,157 (2008). 14 Energy Policy Act of 2005, Pub. L. No. 109-58 at 1268, 119 Stat. 594 (2005) See also Repeal of the Public Utility Holding Company Act of 1935 and Enactment of the Public Utility Holding Company Act of 2005 , Order No. 667, 70 Fed. Reg. 75,592 (Dec. 20, 2005), FERC Stats. & Regs. ¶ 31,197 at P 25 (2005), order on reh’g , Order No. 667-A, 71 Fed. Reg. 28,446 (May 16, 2006), FERC Stats. & Regs. ¶ 31,213, order on reh’g , Order No. 667-B, 71
9 does not fall within the definition of a holding company for purposes of FPA section 203(a)(2) and that the provisions of section 203(a)(2) do not apply to the Transaction. Nevertheless, consistent with Commission precedent and as a precautionary measure, Applicants request that the Commission approve the Transaction under FPA section 203(a)(2) without making a determination as to its jurisdiction. 15
V. THE TRANSACTION IS CONSISTENT WITH THE PUBLIC INTEREST
Commission approval under section 203 of the FPA requires a finding that the
Transaction will be consistent with the public interest. 16 In determining whether a proposed disposition of jurisdictional facilities is consistent with the public interest, the Commission considers four factors: (1) the effect on competition; (2) the effect on rates; (3) the effect on regulation; and (4) whether the proposed transaction will result in cross-subsidization of non- utility associate companies or pledge or encumbrance of utilities for the benefit of associate companies. 17 The proposed Transaction is consistent with the public interest under these criteria as outlined by the Commission in its regulations, in the Merger Policy Statement,18 the
Supplemental section 203 Policy Statement,19 and Order No. 669, 20 and warrants approval as
Fed. Reg. 42,750 (July 28, 2006), FERC Stats. & Regs. ¶ 31,224 (2006), order on reh’g , Order No. 667-C, 72 Fed. Reg. 8,277 (Feb. 26, 2007), 118 FERC ¶ 61,133 (2007). 15 See, e.g., Ocean State Power , 47 FERC ¶ 61,321 at 62,130 (1989) (assuming jurisdiction over transaction without ruling on threshold jurisdictional question); Oncor Elec. Delivery Co. , 120 FERC ¶ 61,215 at P 22 n. 23 (2007) (agreeing that there was no need to decide whether section 203(a)(2) applied to a transaction because the public-interest analysis applies under both 203(a)(1) and 203(a)(2) and the Commission’s conclusion in the case would not change). 16 See 16 U.S.C. § 824b(a)(4). 17 See 18 C.F.R. § 2.26. 18 Inquiry Concerning the Commission’s Merger Policy Under the Fed. Power Act: Policy Statement , Order No. 592, FERC Stats. & Regs. ¶ 31,044 (1996), recons. denied , Order No. 592-A, 79 FERC ¶ 61,321 (1997)(“ Merger Policy Statement ”) (codified at 18 C.F.R. pt. 2.26). 19 Supplemental Policy Statement , supra . 20 Order 669 , supra .
10 explained below.
A. The Transaction Will Not Have an Adverse Effect on Competition
The Commission should find that the proposed Transaction will not have an adverse effect on competition in the relevant market because it does not raise any horizontal or vertical market power concerns.
1. The Transaction raises no horizontal market power concerns
As IPL only owns generation facilities within MISO, the relevant geographic market for purposes of analyzing the Transaction is the MISO BAA. Section 33.3(a)(2)(i) of the
Commission’s regulations states that a horizontal competitive screen analysis is not required if the applicant “[a]ffirmatively 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 .” 21 Under this standard, no horizontal competitive screen analysis is required with respect to the Transaction for two reasons.
First, the Applicants and their affiliates do not conduct business in the same geographic market. While the Caisse, CDP Fund’s parent, indirectly owns an economic interest in electric generation in MISO through its 24.73% interest in Invenergy Wind, the Caisse’s interest in
Invenergy Wind is entirely non-controlling and passive.22 Therefore, Invenergy Wind should not be considered an affiliate of CDP Fund for purposes of FPA section 203.
Second, even if Invenergy Wind were an affiliate of CDP Fund (which it is not), the
21 18 C.F.R. § 33.3(a)(2)(i)(stating that a "horizontal Competitive Analysis Screen need not be filed if the applicant . . . [a]ffirmatively demonstrates that . . . the extent of the business transactions in the same geographic markets is de minimis "); see also Liberty Elec. Power , 110 FERC ¶ 62,152 (2005) (approving transfer of jurisdictional facilities without requiring horizontal competitive screen analysis where parties held only de minimis interests in relevant markets). 22 See Grand Ridge Energy Storage LLC , 149 FERC ¶ 61,102 (2014); Beech Ridge Energy LLC, Docket No. ER10-2137-009 et al. (Letter order issued Dec. 16, 2014).
11 combination of IPL’s generation with the generation controlled by Invenergy Wind in MISO satisfies the Commission’s de minimis standard. As previously described, IPL owns or controls approximately 3100 MW in MISO, and Invenergy Wind owns or controls approximately 593
MW in operation or under development. The MISO market has installed capacity of approximately 177,160 MW. 23 Thus, assuming the operation of all of Invenergy Wind’s generation in development, IPL and Invenergy Wind would own or control on a combined basis only approximately 2% of MISO’s installed generation capacity which is well within the limits of what the Commission has found to be a de minimis overlap. 24
Accordingly, the Transaction does not represent any horizontal market power concerns.
2. The Transaction raises no vertical market power concerns
Section 33.4(a)(2) of the Commission’s regulations states that a vertical competitive analysis is not required if the applicants affirmatively demonstrate that “the merging entities currently do not provide inputs to electricity products . . . in the same geographic markets.”25
Under this standard, no vertical competitive screen analysis is required because the Transaction does not involve the combination of control over generation with control over transmission or other vertical inputs to generation. Neither CDP Fund nor any of its affiliates own or control
23 See https://www.misoenergy.org/Library/Repository/Communication%20Material/Corporate/ Corporate%20Fact%20Sheet.pdf. 24 The Commission has generally not required preparation of a competitive screen analysis in cases where the applicants’ combined market share was less than 3 percent of the installed capacity in the market. See, e.g. , NewPage Pub. Utils. , 143 FERC ¶ 62,121 at 64,341 (2013) (post-transaction shares of 1.65 percent of the installed capacity in the ISO-NE market, 0.9 percent of the installed capacity in the PJM market, and 2.52 percent of the total installed capacity in the MISO market); Dynegy Roseton, L.L.C. , 142 FERC ¶ 62,148 at 64,337 (2013) (post- transaction shares of 3.2 percent of the installed capacity in the NYISO market); Macho Springs Power, I, LLC , 135 FERC ¶ 62,200 at 64,571 (2011) (post-transaction share of 3 percent of the installed capacity in the El Paso BAA); Milford Power Co., LLC , 134 FERC ¶ 62,038 at 64,074-75 (2011) (post-transaction share of 4.5 percent of installed capacity in ISO-NE); Majestic Wind Power LLC , 129 FERC ¶ 62,125 at 64,393-94 (2009) (post-transaction share of 2.36 percent of installed capacity in MISO and 4.8 percent in the Western Area Power Administration-Upper Great Plains East BAA). 25 18 C.F.R. § 33.4(a)(1).
12 within MISO: (i) any electric transmission facilities; (ii) any intrastate natural gas transportation, storage, or distribution facilities; (iii) physical coal supply sources or access to transportation of coal supplies; or (iv) any generation capacity development sites that would constitute barriers to entry to the generation market. Accordingly, the Transaction does not raise any vertical market power concerns.
B. The Transaction Will Have No Effect on Rates
The proposed Transaction will not have an adverse effect on the rates charged to either wholesale sales or transmission service customers. Following the proposed Transaction, all wholesale sales of electric energy by IPL will continue to be made at market-based rates authorized by the Commission. The Commission has previously ruled that market-based wholesale power sales do not raise concerns about a transaction’s possible adverse effect on rates. 26 Nor will the Transaction have any effect on the recovery of IPL’s transmission revenue requirement from MISO under IPL’s open access transmission tariff.
However, as a precautionary measure IPL commits for a period of five years to hold harmless IPL’s transmission customers from the costs of the Transaction. For that five-year period, IPL will not seek to include any Transaction-related costs in its transmission revenue requirement, except to the extent it can demonstrate that Transaction-related savings are equal to or in excess of the Transaction-related costs included in the rate filing. The Commission has approved this type of commitment in its Merger Policy Statement and in a number of subsequent cases 27 and has full authority to enforce its provisions.
26 See, e.g ., Ameren Energy Generating Co., 145 FERC ¶ 61,034 at PP 83-88 (2013). 27 Merger Policy Statement , supra , at 30,124; see also Ameren Corp. , 108 FERC ¶ 61,094 at PP 62-68 (2004), reh’g denied , 111 FERC ¶ 61,055 (2005); Great Plains Energy Inc. , 121 FERC ¶ 61,069 at P 48 & n.63 (2007) (citing cases), reh’g denied , 122 FERC ¶ 61,177 (2008).
13 C. The Transaction Will Have No Effect on Regulation
The Transaction will have no effect on the Commission’s jurisdiction over the jurisdictional activities of the Applicants or their affiliates. Additionally, the Transaction will have no effect on state commission regulation and does not require approval from the IURC.
Therefore, the proposed Transaction will have no effect on regulation for purposes of the public interest determination by the Commission under FPA section 203. 28
D. The Transaction Will Not Result in Cross-Subsidization, Pledge, or Encumbrance of Utility Assets
Under the amendments to section 203 implemented by the Energy Policy Act of 2005, the Commission “shall approve” a proposed transaction that is otherwise consistent with the public interest “if it finds that the proposed transaction . . . will not result in cross-subsidization of a non-utility associate company or the pledge or encumbrance of utility assets for the benefit of an associate company, unless . . . the cross-subsidization, pledge, or encumbrance will be consistent with the public interest.” 29
In Order Nos. 669, 669-A and 669-B, the Commission identified a four-factor test that applicants must satisfy in order to address the concerns identified in section 203 regarding any possible cross-subsidization, pledge or encumbrance of utility assets associated with the proposed transaction. 30 Under this test, the Commission examines whether a proposed transaction, at the time of the transaction or in the future, will result in:
(1) transfers of facilities between a traditional utility associate company with wholesale or retail customers served under cost-based regulation and an associate company;
28 See 18 C.F.R. § 2.26(e). 29 FPA § 203(a)(4), 16 U.S.C. § 824b(a)(4). 30 Order No. 669, FERC Stats. & Regs. ¶ 31,200 at P 169; Order No. 669-A, FERC Stats. & Regs. ¶ 31,214 at P 144.
14 (2) new issuances of securities by traditional utility associate companies with wholesale or retail customers served under cost-based regulation for the benefit of an associate company;
(3) new pledges or encumbrances of assets of a traditional utility associate company with wholesale or retail customers served under cost-based regulation for the benefit of an associate company; and
(4) new affiliate contracts between non-utility associate companies and traditional utility associate companies that have captive customers or that own or provide transmission service over jurisdictional transmission facilities, other than non-power goods and services agreements subject to review under sections 205 and 206 of the FPA. 31
In Exhibit M the Applicants demonstrate, based on facts and circumstances known to them or that are reasonably foreseeable, that the Transaction will not result in any of the above- outlined transfers of facilities, issuances or securities, pledges or encumbrance of assets or other agreements. Exhibit M also contains, as required by 18 C.F.R. § 33.2(j)(1)(i), a listing of the existing pledges and encumbrances of IPL.
VI. INFORMATION AND EXHIBITS REQUIRED BY PART 33 OF THE COMMISSION’S REGULATIONS
In compliance with 18 C.F.R. § 33.2 of the Commission’s regulations, 32 Applicants submit the following information:
A. Section 33.2(a): Name and Principal Business Office of Applicants
Indianapolis Power & Light Company One Monument Circle Indianapolis, IN 46204
CDP Infrastructure Fund GP Attention: Olivier Renault 1000, Place Jean-Paul-Riopelle Montréal (Québec) H2Z 2B3
31 18 C.F.R. § 33.2(j)(1)(ii). 32 18 C.F.R. § 33.2.
15
B. Section 33.2(b): Names and Addresses of the Persons Authorized to Receive Notices and Communications
The names and addresses of persons authorized to receive notices and communications with respect to this Application are as follows:
Catherine P. McCarthy William B. Conway Jr. Bracewell & Giuliani LLP James P. Danly 2000 K Street N.W. Skadden, Arps, Slate, Suite 500 Meagher & Flom LLP Washington, DC 20006 1440 New York Avenue N.W. Tel: (202) 828-5839 Washington, DC 20005 [email protected] Tel: (202) 371-7135 [email protected]
Paul Freedman Senior Corporate Counsel The AES Corporation 4300 Wilson Blvd. Arlington, VA 22203 Tel: (703) 682-1159 [email protected]
C. Section 33.2(c): Description of Applicants:
1. Business Activities of Applicants
Applicants’ business activities are described in Section III above. Accordingly,
Applicants request waiver of any requirement to file a separate Exhibit A.
2. Energy Subsidiaries and Energy Affiliates
In Exhibit B Applicants provide a listing of IPL’s electric generation and transmission facilities. The energy subsidiaries and affiliates of CDP Fund relevant to the Transaction are described in Section III above. Applicants request waiver of any requirement to file additional information or asset listings in Exhibit B.
3. Organizational Charts
Applicants provide in Exhibit C simplified organizational charts depicting IPL’s pre-
16 Transaction and post-Transaction upstream ownership.
4. Description of Joint Ventures, Strategic Alliances, Tolling Agreements, or Other Business Agreements
Applicants request waiver of the requirement to file an Exhibit D because the Transaction will not affect any of the Applicants’ business arrangements other than the Transaction itself.
The consummation of the Transaction will not cause a breach of or default under any of the contracts, joint ventures, or strategic alliances entered into by Applicants before the Transaction.
5. Common Officers or Directors
Following consummation of the Transaction, CDP Fund will have the right to appoint directors to the boards of directors of AES Investments and IPALCO and to have input with respect to the appointment or replacement of the President or CFO of IPL, all as described above.
However, CDP Fund and IPL do not currently have and will not have any officers or directors in common. Accordingly, Applicants request waiver of any requirement to file an Exhibit E listing common officers and directors.
6. Description of Wholesale Customers
Applicants request waiver of the requirement to file an Exhibit F providing a description and the location of Applicants’ and their affiliates’ wholesale power sales customers and unbundled transmission service customers. All of IPL’s wholesale sales are made pursuant to its market-based rate schedule, and the Transaction will have no effect on contracts for the sale of wholesale power or transmission service by IPL or any of CDP Fund’s affiliates.
D. Section 33.2(d): Description of Jurisdictional Facilities
The jurisdictional facilities involved in the Transaction are described in Section III.B. of this Application. Accordingly, Applicants request waiver of the requirement to file a separate
Exhibit G.
17 E. Section 33.2(e): Narrative Description of the Transaction
A narrative description of the Transaction is provided in Section IV of this Application.
Accordingly, Applicants request a waiver of the requirement to file a separate Exhibit H.
F. Section 33.2(f): Contracts With Respect to the Transaction
The Purchase and Sale Agreement and the Subscription Agreement are appended to this
Application as Exhibit I. Applicants request waiver to the extent necessary of any requirement to include the schedules or exhibits to these agreements as they are not relevant to the
Commission’s consideration of the Transaction. As indicated in Section II above, Applicants request confidential treatment for the Purchase and Sale Agreement and the Subscription
Agreement pursuant to 18 C.F.R. § 388.112.
G. Section 33.2(g): Facts Relied Upon to Show That the Transaction Is in the Public Interest
The facts relied upon to demonstrate that the Transaction is consistent with the public interest are included in Section V of this Application. Therefore, Applicants requests waiver of the requirement to file a separate Exhibit J.
H. Section 33.2(h): Maps of Physical Property
The Transaction only contemplates the transfer of non-controlling shares of stock in
IPL’s direct and indirect parent companies. Thus, a map would not provide the Commission with information relevant to whether the proposed Transaction is consistent with the public interest. Applicants therefore request waiver of the requirement to file Exhibit K.
I. Section 33.2(i): Status of Approvals From Other Regulatory Bodies
The Transaction will be the subject of a filing before the Committee on Foreign
Investment in the United States but does not otherwise require any other regulatory approvals.
Applicants request waiver of any requirement to restate these facts in a separate Exhibit L.
18 J. Section 33.2(j): Cross-Subsidization and Encumbrances
Applicants’ representations with respect to cross-subsidization and encumbrance of utility assets are included in Section V.D. and in Exhibit M.
K. Section 33.5: Accounting Entries
CDP Fund is not required to keep its books in accordance with the Commission’s
Uniform System of Accounts, and IPL does not intend to reflect or account for any aspect of the
Transaction in its books. Therefore, there are no pro forma accounting entries to be provided with respect to the Transaction. In the event this determination should change, any required accounting entries will be submitted within six months of the consummation of the Transaction.
L. Section 33.7: Verification
Verifications signed by representatives having authority for each Applicant with respect to this Application and having knowledge of the matters set forth herein are included in
Attachment 2.
VII. CONCLUSION
For all of the reasons stated above, Applicants respectfully request that the Commission act on this Application and issue an order approving the Transaction under FPA section 203 no later than January 31, 2015.
[Signatures next page]
19 Respectfully submitted,
/s/ /s/ Catherine P. McCarthy William B. Conway Jr. Bracewell & Giuliani LLP James P. Danly 2000 K Street N.W. Skadden, Arps, Slate, Suite 500 Meagher & Flom LLP Washington, D.C. 20006 1440 New York Avenue, N.W. Tel: (202) 828-5839 Washington, DC 20005 [email protected] Tel: (202) 371-7135 [email protected] Counsel for CDP Infrastructure Fund GP Counsel for Indianapolis Power & Light Company
Paul Freedman Senior Corporate Counsel The AES Corporation 4300 Wilson Blvd. Arlington, VA 22203 Tel: (703) 682-1159 [email protected]
December 23, 2014
20 EXHIBIT B
Listing of IPL Generation and Transmission Assets
IPL Market Based Rate Authority and Generation Assets
Docket # where Date Filing Entity and Its MBR authority was Control Balancing Geographic Region Summer Energy Affiliates granted Generation Name Owned By Controlled By Transfer Authority Area (per Appendix D) In-service Date Capacity (MW) Indianapolis Power & Light Company ("IPL") ER00-1026
Eagle Valley 3 IPL IPL 2001 MISO Central 1951 40 Eagle Valley 4 IPL IPL 2001 MISO Central 1953 56 Eagle Valley 5 IPL IPL 2001 MISO Central 1953 62 Eagle Valley 6 IPL IPL 2001 MISO Central 1956 99 Eagle Valley 1 IC IPL IPL 2001 MISO Central 1967 3 Georgetown GT 1 IPL IPL 2001 MISO Central 2000 79
Georgetown GT 4 IPL IPL 2007 MISO Central 2001 72
Harding Street Station 5 IPL IPL 2001 MISO Central 1958 106 Harding Street Station 6 IPL IPL 2001 MISO Central 1961 106 Harding Street Station 7 IPL IPL 2001 MISO Central 1973 435 Harding Street Station GT 1 IPL IPL 2001 MISO Central 1973 20 Harding Street Station GT 2 IPL IPL 2001 MISO Central 1973 20
Harding Street Station GT 4 IPL IPL 2001 MISO Central 1994 82 Harding Street Station GT 5 IPL IPL 2001 MISO Central 1995 82 Harding Street Station GT 6 IPL IPL 2002 MISO Central 2002 158 Harding Street Station IC 1 IPL IPL 2001 MISO Central 1967 3
Petersburg 1 IPL IPL 2001 MISO Central 1967 223 Petersburg 2 IPL IPL 2001 MISO Central 1969 422 Petersburg 3 IPL IPL 2001 MISO Central 1977 528 Petersburg 4 IPL IPL 2001 MISO Central 1986 530 Petersburg 1 IC IPL IPL 2001 MISO Central 1967 3 Petersburg 2 IC IPL IPL 2001 MISO Central 1967 3 Petersburg 3 IC IPL IPL 2001 MISO Central 1967 2
Page 1 of 2 IPL - Electric Transmissions Assets and/or Natural Gas Intrastate Pipelines and/or Gas Storage Facilities
Filing Entity and its Energy Asset Name and Use Owned by Controlled by Date Control Balancing Geographic Size Affiliates Transferred Authority Area Region
Indianapolis Power & Light 838 miles, Company ("IPL") Transmission System IPL IPL Feb-02 MISO Central 138-345 kV
Page 2 of 2 EXHIBIT C
Organizational Charts Depicting IPL’s Pre-Transaction and Post-Transaction Ownership
Exhibit C provides simplified organizational charts depicting pre-Transaction and post-
Transaction ownership of IPL. Applicants respectfully request waiver of any requirement to provide organizational charts with respect to entities that are not relevant to the Commission’s review under section 203 of the FPA.
Pre-Transaction
Caisse de dépôt et The AES placement du Corporation Québec
100%
100% AES U.S. Holdings, LLC
100%
AES U.S. CDP Infrastructure Investments, Inc. Fund GP
100%
IPALCO Enterprises, Inc.
100%
Indianapolis Power & Light Company
= Direct Ownership Post-Transaction
Caisse de dépôt et The AES placement du Corporation Québec
100%
100% AES U.S. Holdings, LLC
85%
15% AES U.S. CDP Infrastructure Investments, Inc. Fund GP As low as 82.35% Up to IPALCO 17.65% Enterprises, Inc.
100%
Indianapolis Power & Light Company
= Direct Ownership EXHIBIT I
Contracts with Respect to the Transaction
**PUBLIC VERSION** PRIVILEGED AND CONFIDENTIAL INFORMATION OMITTED PURSUANT TO 18 C.F.R. § 388.112
EXHIBIT M
Verification Regarding Cross-Subsidization of a Non-Utility Associate Company or Pledge or Encumbrance of Utility Assets
The Commission’s regulations require that Federal Power Act (“FPA”) section 203 applicants explain that their proposed transaction will not, at the time of the transaction or in the future, result in (1) 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; (2) 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; (3) 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 (4) 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 non-power goods and services agreements subject to review under sections 205 and 206 of the FPA. 18 C.F.R. § 33.2(j)(1)(ii).
As explained in this Exhibit M, Applicants provide assurance and verify, based on facts and circumstances known to the Applicants 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.
(i) Disclosure of existing pledges and/or encumbrances of utility assets
The existing pledges and/or encumbrances of the utility assets of IPL are as follows:
1) Mortgage and Deed of Trust: Pursuant to the terms of IPL’s Mortgage and Deed of Trust by and between IPL and The Bank of New York Mellon Trust Company, National Association as successor in interest to American National Bank and Trust Company of Chicago, Trustee, dated as of May 1, 1940, as supplemented and modified, substantially all property owned by IPL or acquired by IPL after the date of the Mortgage and Deed of Trust is subject to a direct first mortgage lien.
2) Senior Secured Notes: To the extent it falls within the provisions of 18 C.F.R. § 33.2(j)(i), the common stock of IPL is pledged to secure repayment of (i) $400 million 7.25% Senior Secured Notes due 2016, issued under an Indenture between IPALCO Enterprises, Inc. and The Bank of New York Mellon Trust Company, N.A., as Trustee, dated April 15, 2008 and, (ii) $400 million 5.00% Senior Secured Notes due 2018, issued under an Indenture between IPALCO Enterprises, Inc. and The Bank of New York Mellon Trust Company, N.A., as Trustee dated May 18, 2011.
3) Accounts Receivable Securitization: IPL formed IPL Funding in 1996 as a special- purpose entity to purchase receivables originated by IPL pursuant to a receivables
purchase agreement between IPL and IPL Funding. IPL Funding also entered into a sale facility as defined in the Second Amended and Restated Receivables Sale Agreement, dated as of June 25, 2009, among IPL, IPL Funding Corporation, as the Seller, Indianapolis Power & Light Company, as the Collection Agent, Royal Bank of Scotland plc, as the Agent, the Liquidity Providers and Windmill Funding Corporation (“Receivables Sale Agreement”), which matured as extended on October 24, 2012. At that time, Citibank, N.A. and its affiliate, CRC Funding, LLC, replaced The Royal Bank of Scotland plc and Windmill Funding Corporation as Agent and Investor, respectively, collectively now referred to as the “Purchaser.” This agreement has since been renewed annually and, as such, currently is set to mature in October 2015.
None of the existing pledges or encumbrances of IPL relate in any way to the Transaction.
(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;
The Transaction will take place at the holding-company level only and will not involve transfers of any facilities of IPL, either at the time of the Transaction or in the future.
(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;
No new securities will be issued by IPL for the benefit of an associate company in conjunction with the Transaction, either at the time of the Transaction or in the future.
(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
There will not be any new pledges or encumbrances of assets of IPL for the benefit of an associate company in conjunction with the Transaction, either at the time of the Transaction or in the future.
(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 non-power goods and service agreements subject to review under sections 205 and 206 of the Federal Power Act
No new contracts between IPL and any other party are contemplated by the Transaction, either at the time of the Transaction or in the future.
Therefore, based on facts and circumstances known to Applicants or that are reasonably
2
foreseeable, 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.
3
ATTACHMENT 1
PROPOSED PROTECTIVE ORDER
UNITED STATES OF AMERICA FEDERAL ENERGY REGULATORY COMMISSION
Indianapolis Power & Light Company ) Docket No. EC15-___-000 CDP Infrastructure Fund GP )
PROTECTIVE ORDER (Issued ______)
1. This Protective Order shall govern the use of all Protected Materials produced by, or on behalf of, any Participant. Notwithstanding any Order terminating this proceeding, this Protective Order shall remain in effect until specifically modified or terminated by the Presiding Administrative Law Judge (“Presiding Judge”) or the Federal Energy Regulatory Commission (“Commission”).
2. A Participant may designate as protected those materials which customarily are treated by that Participant as sensitive or proprietary, which are not available to the public, and which, if disclosed freely, would subject that Participant or its customers to risk of competitive disadvantage or other business injury.
3. Definitions - For purpose of this Order:
(a) The term “Participant” shall mean a Participant as defined in 18 C.F.R. § 385.102(b).
(b) (1) The term “Protected Materials” means (A) materials (including depositions) provided by a Participant in response to discovery requests and designated by such Participant as protected; (B) any information contained in or obtained from such designated materials; (C) any other materials which are made subject to this Protective Order by the Presiding Judge, by the Commission, by any court or other body having appropriate authority, or by agreement of the Participants; (D) notes of Protected Materials; and (E) copies of Protected Materials. The Participant producing the Protected Materials shall physically mark them on each page as “PROTECTED MATERIALS” or with words of similar import as long as the term “Protected Materials” is included in that designation to indicate that they are Protected Materials.
(2) The term ‘‘Notes of Protected Materials” means memoranda, handwritten notes or any other form of information (including electronic form) which copies or discloses materials described in Paragraph 3 (b)(l). Notes of Protected Materials are subject to the same restrictions provided in this Order for Protected Materials, except as specifically provided in this Order.
(3) Protected Materials shall not include (A) any information or document contained in the files of the Commission, any other federal or state agency or any federal or state court, unless the information or document has been determined to be protected by such agency or court, or (B) any information that is a matter of public knowledge, or which
becomes a matter of public knowledge, other than through disclosure in violation of this Protective Order.
(c) The term ‘‘Non-Disclosure Certificate” shall mean the certificate annexed hereto by which Participants who have been granted access to Protected Materials shall certify their understanding that such access to Protected Materials is provided pursuant to the terms and restrictions of this Protective Order, and that such Participants have read the Protective Order and agree to be bound by it. All Non-Disclosure Certificates shall be served on all parties on the official service list maintained by the Secretary of the Commission in this proceeding.
(d) The term “Reviewing Representative” shall mean a person who has signed a Non-Disclosure Certificate and who is:
(1) a member of the Commission Litigation Staff;
(2) an attorney who has made an appearance in this proceeding for a Participant;
(3) attorneys, paralegals, and other employees associated for purposes of this case with an attorney described in Paragraph 3(d)(2);
(4) an expert or an employee of an expert retained by a Participant for the purpose of advising, preparing for or testifying in this proceeding;
(5) a person designated as a Reviewing Representative by order of the Presiding Judge or the Commission; or
(6) employees or other representatives of Participants with significant responsibility for this proceeding.
4. Protected Materials shall be made available under the terms of this Protective Order only to Participants and only through their Reviewing Representatives as provided in Paragraphs 7, 8, and 9.
5. Protected Materials shall remain available to Participants until the later of the date that an order terminating this proceeding becomes no longer subject to judicial review, or the date that any other Commission proceeding relating to the Protected Materials is concluded and no longer subject to judicial review. If requested to do so in writing after that date, the Participants shall, within fifteen days of such request, return the Protected Materials (excluding Notes of Protected Materials) to the Participants that produced them, or shall destroy the materials, except that copies of filings, official transcripts and exhibits in this proceeding that contain Protected Materials, and Notes of Protected Material maybe retained, if they are maintained in accordance with Paragraph 6. Within such time period each Participant, if requested to do so, shall also submit to the producing Participant an affidavit stating that, to the best of its knowledge, all Protected Materials and all Notes of Protected Materials have been returned or have been destroyed or will be maintained in accordance with Paragraph 6. To the
extent Protected Materials are not returned or destroyed, they shall remain subject to the Protective Order.
6. All Protected Materials shall be maintained by the Participants in a secure place. Access to those materials shall be limited to those Reviewing Representatives specifically authorized pursuant to Paragraphs 8 and 9. The Secretary shall place any Protected Materials filed with the Commission in a non-public file. By placing such documents in a non-public file, the Commission is not making a determination of any claim of privilege. The Commission retains the right to make determinations regarding any claim of privilege and the discretion to release information necessary to carry out its jurisdictional responsibilities.
7. For documents submitted to Commission Litigation Staff (“Staff’), Staff shall follow the notification procedures of 18 C.F.R. § 388.112 before making public any Protected Materials.
8. Protected Materials shall be treated as confidential by each Participant and by the Reviewing Representative in accordance with the certificate executed pursuant to Paragraph 9. Protected Materials shall not be used except as necessary for the conduct of this proceeding, nor shall they be disclosed in any manner to any person except a Reviewing Representative who is engaged in the conduct of this proceeding and who needs to know the information in order to carry out that person’s responsibilities in this proceeding. Reviewing Representatives may make copies of Protected Materials, but such copies become Protected Materials. Reviewing Representatives may make notes of Protected Materials, which shall be treated as Notes of Protected Materials if they disclose the contents of Protected Materials.
9. (a) If a Reviewing Representative’s scope of employment includes the marketing of energy, the direct supervision of any employee or employees whose duties include the marketing of energy or the provision of consulting services to any person whose duties include the marketing of energy, such Reviewing Representative may not use information contained in any Protected Materials obtained through this proceeding to give any Participant or any competitor of any Participant a commercial advantage.
(b) In the event that a Participant wishes to designate as a Reviewing Representative a person not described in Paragraph 3(d), the Participant shall seek agreement from the Participant providing the Protected Materials. If an agreement is reached; that person shall be a Reviewing Representative pursuant to Paragraph 3(d) with respect to those materials. If no agreement is reached, the Participant shall submit the disputed designation to the Presiding Judge or the Commission for resolution.
10. (a) A Reviewing Representative shall not be permitted to inspect, participate in discussions regarding, or otherwise be permitted access to Protected Materials pursuant to this Protective Order unless that Reviewing Representative has first executed a Non-Disclosure Certificate, provided that if an attorney qualified as a Reviewing Representative has executed such a Certificate, the paralegals, secretarial and clerical personnel under the attorney’s instruction, supervision or control need not do so. A copy of each Non-Disclosure Certificate
shall be provided to counsel for the Participant asserting confidentiality prior to disclosure of any Protected Materials to that Reviewing Representative.
(b) Attorneys qualified as Reviewing Representatives are responsible for ensuring that persons under their supervision or control comply with this Order.
11. Any Reviewing Representative may disclose Protected Materials to any other Reviewing Representative as long as the disclosing Reviewing Representative and the receiving Reviewing Representative both have executed a Non-Disclosure Certificate. In the event that any Reviewing Representative to whom the Protected Materials are disclosed ceases to be engaged in these proceedings, or is employed or retained for a position whose occupant is not qualified to be a Reviewing Representative under Paragraph 3(d), access to Protected Materials by that person shall be terminated. Even if no longer engaged in this proceeding, every person who has executed a Non-Disclosure Certificate shall continue to be bound by the provisions of this Protective Order and the Non-Disclosure Certificate.
12. Subject to Paragraph 17, the Presiding Judge or the Commission shall resolve any disputes arising under this Protective Order. Prior to presenting any dispute under this Protective Order to the Presiding Judge or the Commission, the parties to the dispute shall use their best efforts to resolve it. Any Participant that contests the designation of Protected Materials shall notify the party that provided the Protected Materials by specifying in writing the materials whose designation is contested. This Protective Order shall automatically cease to apply to such materials five (5) business days after the notification is made unless the designator, within said five (5)day period, files a motion with the Presiding Judge or the Commission, with supporting affidavits, demonstrating that the materials should continue to be protected. In any challenge to the designation of materials as protected, the burden of proof shall be on the Participant seeking protection. If the Presiding Judge or the Commission finds that the materials at issue are not entitled to protection, the procedures of Paragraph 17 shall apply.
13. All copies of all documents reflecting Protected Materials, including the portion of the hearing testimony, exhibits, transcripts, briefs and other documents which refer to Protected Materials, shall be filed and served in sealed envelopes or other appropriate containers endorsed to the effect that they are sealed pursuant to this Protective Order. Such documents shall be marked “PROTECTED MATERIALS” and shall be filed under seal and served under seal upon the Presiding Judge and all Reviewing Representatives who are on the service list. For anything filed under seal, redacted versions or, where an entire document is protected, a letter indicating such, will also be filed with the Commission and served on all parties on the service list and the Presiding Judge. Counsel for the producing Participant shall provide to all Participants who request the same, a list of Reviewing Representatives who are entitled to receive such material. Counsel shall take all reasonable precautions necessary to assure that Protected Materials are not distributed to unauthorized persons.
14. If any Participant desires to include, utilize or refer to any Protected Materials or information derived therefrom in testimony or exhibits during the hearing in these proceedings in such a manner that might require disclosure of such material to persons other than Reviewing Representatives, such participant shall first notify both counsel for the disclosing Participant and
the Presiding Judge of such desire, identifying with particularity each of the Protected Materials. Thereafter, use of such Protected Materials will be governed by procedures determined by the Presiding Judge.
15. Nothing in this Protective Order shall be construed as precluding any Participant from objecting to the use of Protected Materials on any legal grounds.
16. Nothing in this Protective Order shall preclude any Participant from requesting the Presiding Judge, the Commission or any other body having appropriate authority, to find that this Protective Order should not apply to all or any materials previously designated as Protected Materials pursuant to this Protective Order. The Presiding Judge or the Commission may alter or amend this Protective Order as circumstances warrant at any time during the course of this proceeding.
17. Each party governed by this Protective Order has the right to seek changes in it as appropriate from the Presiding Judge or the Commission.
18. All Protected Materials filed with the Commission, the Presiding Judge or any other judicial or administrative body, in support of, or as a part of, a motion, other pleading, brief or other document, shall be filed and served in sealed envelopes or other appropriate containers bearing prominent markings indicating that the contents include Protected Materials subject to this Protective Order.
19. If the Presiding Judge finds at any time in the course of this proceeding that all or part of the Protected Materials need not be protected, those materials shall, nevertheless, be subject to the protection afforded by this Protective Order for three (3) business days from the date of issuance of the Presiding Judge’s decision, and if the Participant seeking protection files an interlocutory appeal or requests that the issue be certified to the Commission, for an additional seven (7) business days. None of the Participants waives its rights to seek additional administrative or judicial remedies after the Presiding Judge’s decision respecting Protected Materials or Reviewing Representatives, or the Commission’s denial of any appeal thereof. The provisions of 18 C.F.R. § 388.112 shall apply to any requests for Protected Materials in the files of the Commission under the Freedom of Information Act. (5 U.S.C. § 552).
20. Nothing in this Protective Order shall be deemed to preclude any Participant from independently seeking through discovery in any other administrative or judicial proceeding information or materials produced in this proceeding under this Protective Order.
21. None of the Participants waives the right to pursue any other legal or equitable remedies that may be available in the event of actual or anticipated disclosure of Protected Materials.
22. The contents of Protected Materials or any other form of information that copies or discloses Protected Materials shall not be disclosed to anyone other than in accordance with this Protective Order and shall be used only in connection with this proceeding. Any violation of this Protective Order and of any Non-Disclosure Certificate executed hereunder shall constitute a violation of an order of the Commission.
______Presiding Administrative Law Judge
UNITED STATES OF AMERICA FEDERAL ENERGY REGULATORY COMMISSION
Indianapolis Power & Light Company ) Docket No. EC15-___-000 CDP Infrastructure Fund GP )
NON-DISCLOSURE CERTIFICATE
I hereby certify my understanding that access to Protected Materials is provided to me pursuant to the terms and restrictions of the Protective Order in this proceeding, that I have been given a copy of and have read the Protective Order, and that I agree to be bound by it. I understand that the contents of the Protected Materials, any notes or other memoranda, or any other form of information that copies or discloses Protected Materials shall not be disclosed to anyone other than in accordance with the Protective Order. I acknowledge that a violation of this certificate constitutes a violation of an Order of the Federal Energy Regulatory Commission.
By:
Title:
Representing:
Date:
ATTACHMENT 2
VERIFICATIONS