United States of America
before the
Securities and Exchange Commission

November 5, 2002

Public Utility Holding Company Act of 1935
Release No. 27593

Administrative Proceeding
File No. 3-10909

On October 7, 2002, the Securities and Exhange Commission ordered a hearing on Enron Corp.'s applications for exemption from all provisions of the Public Utility Holding Company Act of 1935 (the "Act"), except for Section 9(a)(2) (the "Order"). ¹ The Order directed any person seeking either to intervene pursuant to Commission Rule of Practice 210(b) ² or to participate in the hearing on a limited basis pursuant to Rule 210(c)³, to file a motion describing the nature and extent of the movant's interest with respect to each phase of the hearing.

FPL Group, Inc. ("FPL"), Sithe/Independence Power Partners, L.P. ("Sithe"), and the Electric Power Supply Association ("EPSA") (collectively the "Movants") have each filed a motion to intervene. The Movants make overlapping representations that, they submit, warrant intervention. In sum, they represent as follows:

FPL states that it is a partner with Enron in various joint ventures that own generation plants that are qualifying facilities ("QF") under the Public Utilities Regulatory Policies Act of 1978 ("PURPA"). FPL represents that in the event Enron's applications are denied, this could lead to claims that its joint ventures with Enron are in violation of the PURPA utility ownership restrictions placed on QFs. FPL further posits that any loss of QF status could lead to various claims against the joint ventures, including claims by lenders and power purchasers. FPL concludes that the outcome of this proceeding "could directly affect FPL's interests" and intervention is therefore warranted in "all phases of this proceeding."

Sithe, in its motion, presents virtually the same arguments as FPL. The only apparent difference between the two entities is that Sithe is itself a QF, while FPL has ownership interests in QFs jointly owned by Enron. In addition to its overlapping interests with FPL, Sithe demonstrates its unity of interest with EPSA by its repeated references to EPSA's motion and support of EPSA's position "in its entirety."

EPSA states that it "is the national trade association representing competitive power suppliers, including independent power producers, merchant generators and power marketers." Like FPL and Sithe, it devotes the majority of its motion addressing QF ownership requirements, specifically referencing the QFs involving FPL and Sithe as examples of the entities that have the potential to be impacted by this proceeding.

Act Section 19 provides that the hearing officer may admit as a party any representative of interested consumers or security holders, or any other person whose participation in the proceeding may be in the public interest or for the protection of investors or consumers. ⁴ This standard for discretionary intervention is incorporated into Rule 210(b)(1), which contains the additional proviso that "[n]o person, however, shall be admitted as a party to a proceeding by intervention unless it is determined that leave to participate pursuant to paragraph (c) of this rule would be inadequate for the protection of his or her interests." Applying this standard, it is clear that the Movants have failed to establish a basis to allow them to intervene in this proceeding. None of the Movants is a representative of interested consumers or security holders of Enron. Rather, FPL is a partner of Enron in various joint ventures; Sithe is a QF partially owned by Enron, and EPSA is an organization representing the interests of power suppliers, including QFs. Similarly, the Movants do not seek to intervene on the basis that their participation is in the public interest or for the protection of investors or consumers. ⁵

The Movants also fail to address why leave to participate under Rule 210(c) would be inadequate. Given that none of the Movants meets any of the criteria for intervention, each of their motions to intervene must be denied. Rule 210(c) provides, in relevant part, that "any person may seek leave to participate on a limited basis as a non-party participant as to any matter affecting the person's interests." Although the Movants seek intervention in this proceeding, I conclude that participation on a limited basis is necessarily included within a request to intervene. While no basis exists warranting intervention by any of the Movants, the motions of FPL and Sithe argue that the outcome of this proceeding may affect their interests either as a partner of Enron in various joint ventures or as the QF itself. Moreover, the nexus between EPSA, FPL and Sithe appears sufficient to afford EPSA justification to participate on a limited basis. Accordingly, the Movants will be granted leave jointly to participate on a limited basis.

Rule 210(c)(1) provides that leave to participate "may include such rights ... as the hearing officer may deem appropriate." Given that the interests of the Movants are aligned, in order to avoid duplication and cumulative presentations in this proceeding, the Movants will be required to coordinate all actions in this proceeding, including the joint submission of all filings and joint representation at any hearing.

IT IS ORDERED that, the motions of FPL, Sithe, and EPSA to intervene, be and hereby are, DENIED; and it is further

ORDERED, that, pursuant to Rule 210(c)(1), FPL, Sithe, and EPSA are granted leave jointly to participate on a limited basis in this proceeding; and it is further

ORDERED, that the participation of FPL, Sithe, and EPSA in this proceeding shall be limited to non-duplicative involvement, including the joint submission of any briefs, exhibits, evidence or other matters limited to issues germane to their joint interests; and it is further

ORDERED, that at any hearing in this proceeding, FPL, Sithe, and EPSA shall appear by joint representation; and it is further

ORDERED, that at any hearing in this proceeding, FPL, Sithe, and EPSA may not introduce or cross-examine witnesses absent leave to do so.

Roel C. Campos
Commissioner

Endnotes

¹ Holding Co. Act. Rel. No. 27574 (Oct. 7, 2002), 67 Fed. Reg. 63464. The Order contemplates a two-phase hearing: Phase I is for the limited purpose of determining whether Enron satisfies any of the particular criteria for an exemption under various sections of the Act. If a criterion for exemption is satisfied, Phase II will be for the purpose of determining whether granting an exemption to Enron would be detrimental to the public interest or the interest of investors or consumers.

² 17 C.F.R. § 201.210(b).

³ 17 C.F.R. § 201.210(c).

⁴ 15 U.S.C. § 79s.

⁵ FPL seeks to intervene "in light of the particular harm that could befall FPL...." Sithe claims that it "could be adversely affected...." EPSA seeks leave to intervene "in order to protect the interests of EPSA's members."

http://www.sec.gov/rules/other/35-27593.htm