BGS Auction brandmark
Search:
 
Frequently Asked Questions - #53

Your use of this page (site) constitutes an acceptance of the Terms as described in the disclaimer.

 

FAQ-53

Entity A’s parent company has plans to merge or to combine with another company.  This other company has a subsidiary, Entity B, which is also active in trading and marketing power in PJM.  Entity A does not know whether Entity B intends to submit a Part 1 Application to a BGS Auction.  Entity A is concerned that complications may arise if both Entity A and Entity B participate in the auction and the merger closes before such time that three days have elapsed after the Board renders a decision on the auction results.  Would it be possible for Entity A to declare in its Part 1 Application a “contingent” Bidding Agreement whereby the Bidding Agreement is NOT effective unless: (i) Entity A and Entity B both become Qualified Bidders in the auction and learn that the other is identified as such through the list of Qualified Bidders provided with the notification of qualification; and (ii) the merger closes prior to the start of the auction?  The Bidding Agreement, should it become effective, would allow the Entities to bid jointly.  


Although the Association and Confidential Information Rules are designed to accommodate many different circumstances, unfortunately these Rules do not contemplate the arrangement that you describe and the Auction Manager would not accept such an arrangement in the Part 1 Application.  The contingent arrangement that you describe does not seem to be an ‘agreement’.  If, on the one hand, Entity A is acting without the accord and the knowledge of Entity B, then there is no agreement between Entity A and Entity B, contingent or otherwise.  Entity A cannot declare a Bidding Agreement with Entity B when Entity B is not even informed of that fact.  If, on the other hand, Entity A and Entity B are communicating with respect to their participation in the auction, then each of Entity A and Entity B should declare in it Part 1 Application an actual bidding agreement, joint venture for the purpose of bidding in the auction, bidding consortium, or other arrangement pertaining to bidding in the auction, which renders a ‘contingent’ agreement moot.  



11/20/2023, in Association and Confidential Information Rules.

What's New