PJM Market Monitor Urges FERC to Reject or Further Scrutinize MARA–Long Ridge Section 203 Deal Over BlackRock/Vanguard Affiliation

The PJM Independent Market Monitor (IMM) filed comments in FERC Docket No. EC26-92 arguing that Applicants' September 1, 2026 Deficiency Letter Response failed to demonstrate that BlackRock's and Vanguard's large equity stakes in MARA Holdings (16.81% and 12.35% respectively, combined ~30%) satisfy the passivity requirements of their FPA Section 203(a)(2) blanket authorizations. The IMM recommends FERC either reject the Section 203 application for MARA's acquisition of Long Ridge Energy Generation/Long Ridge Retail Electric Supplier or continue to find it deficient until Applicants provide additional evidence — including disclosure of all communications with BlackRock/Vanguard and adherence to explicit passive proxy-voting rules.

This proceeding tests how FERC's affiliate/control and blanket-authorization standards apply to large passive institutional investors (BlackRock, Vanguard) that simultaneously hold >10% voting stakes in numerous major PJM generation owners (Dominion, Constellation, AEP, Vistra, NRG, etc.) representing over 97 GW and 6.8 GW of PJM capacity respectively. A finding that these stakes constitute affiliation would have major implications for market-based rate authority, horizontal market power screening, and merger review across PJM and potentially other RTOs, given the scale of index-fund cross-ownership in the power sector and its intersection with the fast-growing data-center/crypto-mining load segment MARA represents.

The filing surfaces a structural market-design tension between FERC's decades-old passive-investor blanket authorization framework (grounded in Schedule 13G-style non-control presumptions) and the reality of concentrated, diversified institutional ownership across competing generation portfolios in organized markets. If the Commission agrees with the IMM that Schedule 13G status is not dispositive of non-control, it could tighten affiliation determinations under 18 CFR market-based rate rules and Section 203(a)(2), requiring more rigorous disclosure of investor-investee communications and proxy practices. This would affect horizontal market power screens (Competitive Analysis Screens) used in RTO merger reviews, potentially triggering affiliate treatment for common institutional shareholders across large swaths of PJM generation capacity — with downstream effects on market-based rate eligibility, ownership caps, and merger approval timelines for transactions involving heavily index-fund-owned utilities or new entrants like MARA that combine generation with data-center/crypto load. The case also intersects with growing FERC and market-monitor scrutiny of co-located load/generation arrangements tied to data center growth.

Federal Power Act Section 203; FERC blanket authorization rules under Section 203(a)(1)/(a)(2); FERC market-based rate affiliation precedent (Control & Affiliation for Purposes of Market-Based Rate Requirements, 157 FERC ¶61,064 (2016); NextEra Energy, Inc., 174 FERC ¶61,213); 18 CFR §385.211 Rule 211 Comments

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