May 10, 2023
This week, Utah Attorney General Sean D. Reyes and a coalition of states filed a Motion to Intervene and a Motion for Relief regarding BlackRock, Inc.’s blanket authorizations from the U.S. Federal Regulatory Commission (FERC). The states moved to intervene in FERC’s three-year reauthorization of BlackRock’s blanket authorizations to buy, acquire or take over $10 million in voting securities of public, electric, utility, transmitting or holding companies.
The filing follows General Reyes’ Wednesday appearance before the U.S. House Committee on Oversight and Accountability in Washington, D.C., where he testified on the critically important issue of how Environmental Social and Governance (ESG) factors are distorting the American financial system and harming consumers.
Over the past decade, BlackRock has been granted blanket authorizations and reauthorizations from FERC. In its applications, BlackRock repeatedly assured FERC that reauthorizations are warranted because BlackRock is merely a passive, non-controlling investor. Currently, the coalition asserts this isn’t true. As a member of several horizontal associations, BlackRock aims to pressure utility companies to phase out traditional energy investments.
Under the 2022 BlackRock Order, the coalition requests that FERC exercise its ongoing authority to:
- Audit BlackRock’s compliance with their application representations and commitments for reauthorization and the Order terms.
- Issue supplemental orders and other appropriate relief, including ordering BlackRock to function as passive, non-controlling investors.
- Cease all coordination with other asset managers and owners to influence control of utility operations by purchasing or acquiring additional securities.
Attorney General Reyes issued the following statement: “The reliability of our nation’s electric grid is on the verge of catastrophe because of the push to net zero. BlackRock is skirting federal law by telling FERC it is a passive investor in public utilities while actively pursuing its multiple commitments to net-zero initiatives. We will continue to fight for our constituents against these efforts that will make electricity more expensive and less reliable.”
According to the States, BlackRock has violated § 824b(a)(2) of the FPA and FERC’s reauthorization for two independent reasons, each sufficient for relief.
First, BlackRock, as a “holding company,” has not received FERC’s authorization. BlackRock is a signatory to horizontal associations—including Climate Action 100+ and the Net Zero Asset Managers initiative—that coordinate shareholder voting power across their members to influence FPA-covered utilities’ operations.
Second, BlackRock is not acting as “passive, non-controlling investors” as they represented in seeking authorization. FERC’s orders never allowed BlackRock to engage in activities that might influence commercial conduct, determine whether physical utility assets are available or withheld from the marketplace, or participate in operational decisions for utility companies.
Joining Utah in filing the Motion to Intervene and the Motion for Relief are the states of Indiana, Alabama, Alaska, Arkansas, Iowa, Kentucky, Louisiana, Mississippi, Missouri, Montana, Nebraska, Ohio, South Carolina, South Dakota, Texas and West Virginia.
Read the FERC Filing here.