E-8: Chairman Christie’s Concurrence in BlackRock Section 203 Blanket Authorization Extension, EC25-12 & EC16-77

Docket Nos. EC25-12-000, EC16-77-004

I have expressed my concern in the past about the specter of a huge asset manager, such as BlackRock, using its substantial holdings to exert control over the operational decisions of a public utility.[1]  Owning 20%, or even less than that, of a utility’s stock could well result in the exercise of substantial influence over a utility.  So it is imperative that we carefully review requests under section 203 of the Federal Power Act to extend asset managers’ blanket authorizations.   

As I also have said before, a public utility has public service obligations; it is not just another company seeking to maximize returns to its shareholders.  Many have been granted monopoly franchises by state governments in return for serving the public within their territories. 

One threat is that asset managers, like BlackRock, will use their ownership of competing assets to exert market power in wholesale energy, capacity, and ancillary services markets.  This is consistent with the concerns expressed by Public Citizen and the Private Equity Stakeholder Project in this proceeding, and I share those concerns.  

A related concern that I share, raised by the States, is that huge asset managers such as BlackRock have in the very recent past participated in investor advocacy organizations, such as the Net Zero Asset Manager initiative, that, by the very terms of their membership, pledge these asset managers to promote policies that may be contrary to the interests of consumers of the public utilities in which they invest.

Nevertheless, 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.  It is a fact of economic life that public utilities regulated by the Commission must seek investment capital from wherever it is available, and much of it is now either owned or managed by huge asset managers.  This reality calls for heightened scrutiny of the implications of such financial power, and potential action, by governmental legislative and regulatory bodies.  

In this proceeding, as detailed in the order, BlackRock has pledged not to use its holdings to influence utility management, and to avoid using its holdings to reduce competition among generation assets or to exert market power.  The order also details how BlackRock has pulled out of some investor advocacy organizations, although it apparently retains membership in others, such as Ceres, Inc., which merits continued scrutiny.  Based on the representations by BlackRock and the conditions detailed in the order, I support extending BlackRock’s blanket authorization for an additional three years, but with this reauthorization comes a compelling need for continued vigilance over BlackRock’s actions during this period.

For these reasons, I respectfully concur.