On January 18, 2017, the Department of Justice`s (DOJ) Department of Agreements filed a complaint at the request of the Federal Trade Commission (FTC) and proposed a final judgment in U.S. District Court for the District of Columbia. Duke allegedly breached pre-merger reporting obligations by acquiring and exercising economic control of Osprey de Calpine before complying with the requirements of the hart-Scott-Rodino Antitrust Improvements Act. (2) The complaint submitted that Duke had begun to exercise operational control of Osprey before complying with the requirements of the Hart-Scott-Rodino Antitrust Improvements Act. before submitting the necessary notifications to the FTC and doJ and before meeting the mandatory 30-day waiting period for verification of agreements. (4) ID to 16. In its decision to approve the transaction, FERC decided not to assign Osprey`s capacity to Duke, as the toll agreement and transaction documents were entered into „at the same time or at the same time“ and therefore „linked“. Osprey Energy Center LLC and Duke Energy Florida Inc., 152 FERC at P 31 (2015). Toll agreements are a common feature of the energy sector.
Through these agreements, a buyer will provide fuel to an electric generator and in return, the generator will provide electricity to the buyer. Although widely used, the United States has recently found that such a toll agreement between companies considering a merger was contrary to the hart-Scott-Rodino Antitrust Improvements Act of 1976, amended, 15 USC No. 18a, resulting in the imposition of significant financial penalties on the purchaser. More than 20 years ago, a Deputy Attorney General gave a speech in which he stated that a similar practice, then used in the radio industry, could violate the HSR Act if used in a merger agreement.8 So far, neither DOJ nor the FTC have ever brought legal action in these circumstances. Indeed, doJ seemed to recognize the novelty of its position by accepting a penalty well below the maximum limit provided by the statute. Although such toll agreements, including provisions that give buyers control over production, are increasingly common in the energy industry, Duke admitted to the Florida Utilities Commission that the toll agreement was reached as part of its Osprey purchase agreement and that it had no independent justification for the transaction. (3) The toll agreement should expedite the approval of the transaction by the Federal Energy Regulatory Commission (FERC) by allowing Duke to demonstrate that it „already controls“ Osprey, so that „no new damage could result from the direct acquisition of Duke Osprey.“ (4) In this case, it is clear that it is important to advise experienced HSR lawyers by all means prior to the acquisition of voting shares, unrelated shares or unconsolidated assets. Although such toll agreements are becoming more common in the energy sector, parties who have or may have an interest in acquiring the other party to the agreement must ensure that effective beneficiaries of the objective are not covered before complying with the reporting obligations of the Trade Control Act where notification of the HSR is required. Otherwise, the toll agreement can be interpreted as proof of fire and the acquiring person is subject to significant penalties for non-compliance of up to USD 40,654 per day. at the end of last week, with only a few hours for the Obama administration, The Department of Understanding of the Justice Department (DOJ) has issued one of the most notable measures to impose weapons in more than 40 years of history of the Hart-Scott Rodino (HSR) Act.1 In the United States against Duke Energy Corp.
the government has claimed that Duke`s entry into a plant toll agreement with an electricity generator until the passage of this generating law.