According to the DOJ, agreements that transfer economic ownership and are executed before the notification of the RSH and the expiration of the waiting period can, under the HSR Act, be assimilated to a jump of arms if they are concluded while a buyer intends to acquire the destination.  This type of agreement allows a buyer to take control of an objective and obtain effects of the concentration before the regulatory authorities have completed their anti-dominant examination. The DOJ therefore argued that the term sheet and the combined toll agreement had removed Calpine as an independent competitive presence in the market and that Duke could make all competitive decisions for the Osprey facility from the date of entry into force of the toll agreement and well before RSH`s application was filed. A toll contract is a contract for the lease of a power plant by its owners. These agreements give the tenant the opportunity to convert one physical product (fuel) into another (electricity). This chapter explains how to determine the economic value of a power plant. Although such toll agreements, including provisions that give buyers control over generation, are increasingly common in Osprey`s power purchase activities and do not have an independent justification for the transaction.  In fact, the toll agreement is expected to expedite FERC`s approval for the transaction by allowing Duke to prove that it “already controlled” Osprey, so that “if Duke is allowed to directly acquire Osprey, no further damage could arise.”  In August 2014, Duke Energy Corporation (Duke) and Calpine Corporation (Calpine Corporation), a competing wholesale electricity vendor in Florida, agreed to purchase the Osprey Energy Center (Osprey), a combined gas and natural gas power plant in Florida, from Calpine. The structure of the proposed transaction included a toll agreement that gave Duke responsibility for determining the amount of electricity to be generated at Osprey and purchasing the fuel needed to generate that electricity. In essence, the toll agreement allowed Duke to take operational control of the Osprey facility and limited Calpine`s role to the “mechanical operation of the Osprey facility, in accordance with Duke`s instructions.”  An agreement under which a party owns (and bears the risks) the inputs and results of a process as well as the rights of a portion of the process`s capacity (the debtors). Another party undertakes to operate the process or facility and collects a toll per converted entry unit or per unit of capacity to which rights are granted (the large one). As part of an LNG liquefaction agreement, a company sends a lot of table gas to a liquefaction plant, with the gas being liquefied at a predetermined toll. This case highlights the importance of consulting with experienced HSR consultants before acquiring voting shares, non-company interests or assets.
Although toll agreements of the type in question are becoming more frequent in the energy sector, parties that have or may have an interest in acquiring the other contracting party must be careful not to take economic ownership of the offeree company before fulfilling the reporting obligations under the HSR Act if notification of the HSR was necessary. . . .