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Frequently Asked Questions - #42

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We are a Registered Bidder in a BGS Auction.  We are also a public company subject to the disclosure rules established by the Securities and Exchange Commission (“SEC”).  We are concerned about what we can and cannot say regarding the BGS Auction for purposes of our SEC disclosures.  Can you provide guidance regarding what can and cannot be said while still upholding our certifications from the Part 1 and Part 2 Application?

In your Part 1 Application, you agreed not to disclose that you are a Qualified Bidder.  In your Part 2 Application, you agreed not to disclose that you are a Registered Bidder (see, for instance, FAQ-32, FAQ-33, FAQ-37, and FAQ-40).

There are ways in which auction participation could be revealed absent an explicit statement that you are intending to bid in the auction.  Doing so could violate certifications that you have made in the Part 1 and Part 2 Applications.  What you may be able to say for purposes of your SEC disclosure without violating certifications in the Part 1 and Part 2 Applications depends on your other business activities and your overall business outlook.

To the extent that you own significant generation in PJM, the marketing of which would be materially affected by the auction, providing factual information about the auction would not be unusual and it would not necessarily reveal that you are participating in the auction.  A generation owner in PJM would be expected to have an interest in the BGS Auctions given that the auctions may create a demand for forward power products.  These products need not be sales made at the auctions, but could be anything including sales of standard products to bidders or third-party suppliers.  The auctions could thus be material to such an entity, even if it were not participating in the auctions.  For such an entity to include in its SEC filings public factual information about the auctions or to refer to previously disclosed information about the auctions, would not, if carefully done, reveal that the entity is a Qualified Bidder or a Registered Bidder.  It should be clear to readers of such information that whether or not the entity is a bidder, the BGS Auctions could have an effect on the entity's business outlook.  Such a release of information, if carefully done, need not violate any certification.

At the other end of the spectrum, an entity that has no significant presence in PJM and that included in its SEC filings information about the auctions may well be viewed as using the filing to communicate that it is participating in one or both of the BGS Auctions.  Such an entity may be violating the certification that it will not reveal that it is a Qualified Bidder or Registered Bidder in one or both of the BGS Auctions.

11/15/2021, in Association and Confidential Information Rules.

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