FERC last week authorized the installation of a new general partner and transfer of ownership interests in the privately held Infrastructure Investments Fund (IIF) that acquired El Paso Electric (EPE) earlier this year. (See IIF Closes El Paso Electric Purchase.)

The commission on Thursday accepted a request by IIF US Holding and IIF US Holding 2 (master partnerships operating under the IIF umbrella name) to transfer one individual’s 33.3% general partnership interest in the entities to Anne Cleary, another private individual (EC20-94).

In addition to EPE, IIF US Holding owns a string of public utilities authorized to sell wholesale electric energy, capacity and ancillary services at market-based rates.

The commission said it found no evidence that the transaction would have an adverse effect on horizontal competition, rates or federal or state regulation, nor would it produce vertical market power concerns or result in the cross-subsidization of a non-utility associate company by a utility company.

IIF said that save for EPE’s transmission facilities and the “limited and discrete interconnection facilities associated with individual generation facilities,” it doesn’t operate or control any transmission in the U.S. FERC said IIF’s generation will continue to operate under existing market-based rate tariffs or cost-based rate schedules.

Public Citizen protested the transfer, criticizing Cleary’s installation and noting that she was president of a power company (Mirant California) that declared bankruptcy and was charged with market manipulation and other illegal conduct during California’s electricity deregulation crisis in 2000-2001.

The consumer advocacy group argued that IIF failed to represent all of Cleary’s energy-related affiliations as a former advisor of project managing service company Taffrail Group, a former principal with Modern Grid Solutions, and her link to a member of PJM’s Board of Managers through her board position with the Bermuda-based Ascendant utility. The group also argued that Cleary already serves on the board of directors at IIF subsidiary Southwest Generation Operating Co.

Public Citizen said IIF is a “lightly regulated, off-the-books series of private equity shell companies.” It said the three owners don’t function as owners but as a board of directors that simply delegates the day-to-day management of IIF to J.P. Morgan. It also said it’s “unclear what role J.P. Morgan played” in selecting Cleary for the Southwest Generation board seat.

IIF said it is advised by J.P. Morgan and structured as a “limited partnership investment vehicle, the equity of which is held by passive limited partners.” The company disputed that J.P. Morgan directs IIF. It said its utilities handle their own “day-to-day management and activities.” It also said because Cleary is a private individual, “there are no common officers or directors of parties” to the ownership transfer and that her role at Southwest Generation isn’t relevant.

FERC said Cleary’s connections are not a concern because Public Citizen did not prove that the transaction would harm competition.

“Public Citizen has not argued, let alone demonstrated, that its allegations, if proved true, show that the proposed transaction will have an adverse effect on competition, rates, regulation or result in cross-subsidization,” the commission said.

FERC agreed with IIF that because Cleary and Dennis Clarke, the seller, are private individuals, there are no common officers or directors of parties to the transaction.