FERC has authorized two members recently appointed to FirstEnergy’s Board of Directors by the Icahn Group to have voting rights on the board, ruling that their appointment will not adversely impact business competition, electricity rates or state or federal regulations (EC21-77).

The commission ruled on Thursday that Andrew Teno and Jesse Lynn, both employees of Icahn Capital, will receive voting rights resulting from the board’s expansion from 12 to 14 members, which was announced in March. (See Icahn Capital Given 2 Seats on FirstEnergy’s Board.) Teno will serve on FirstEnergy’s audit and finance committees, while Lynn will serve on the corporate governance and corporate responsibility and special litigation committees.

In February, billionaire investor Carl Icahn disclosed in a filing with the Federal Trade Commission that his investment firm intended to acquire voting securities of FirstEnergy in “an amount exceeding $184 million but less than $920 million,” depending on market conditions. (See FirstEnergy Shares Jump on Icahn Investment.)

The decision to add two new board members came after FirstEnergy’s board fired five top executives in the last year, including former CEO Charles Jones, in the wake of a bribery scandal. (See FirstEnergy Fires Jones over Bribe Probe.)

“We look forward to working with our new directors and the rest of the board on the priorities for FirstEnergy and building on the meaningful steps we have already taken to drive performance, engage in an open dialogue with regulators and other stakeholders, and ensure a company-wide culture of integrity and ethical behavior,” said FirstEnergy CEO Steven E. Strah in a statement.

FirstEnergy and the Icahn Group requested that FERC authorize the new voting members and “assume, without deciding, that it has jurisdiction over the disposition of jurisdictional facilities resulting from the receipt of upstream board voting rights.”

Section 203 of the Federal Power Act requires FERC to approve “proposed dispositions, consolidations, acquisitions, or changes in control if the commission determines that the proposed transaction will be consistent with the public interest.”

FirstEnergy said that they were the only entity in the proposed transaction that currently own or control public utilities under FERC jurisdiction in the PJM market and that the Icahn Group does not have any generating units in its portfolio, limiting any possible effects on horizontal competition.

“Applicants demonstrate that neither FirstEnergy and its affiliates nor the Icahn Group and its affiliates currently conduct business in the same geographic market or that the extent of the business transactions in the same geographic markets is de minimis,” FERC said.

The commission also found that there would be no effect on electricity rates for wholesale ratepayers or transmission customers because FirstEnergy and Icahn “will continue to make all sales pursuant to the terms of existing long-term power purchase agreements and pursuant to their market-based rate authority.”

FERC dismissed arguments from utility watchdog groups, including Public Citizen and the Citizens Utility Board of Ohio, who maintained that the commission should rule on whether state regulators have the power to approve the deal between FirstEnergy and Icahn.

With FERC’s ruling on Thursday, the only obstacle possibly standing in the way of Teno and Lynn becoming full voting board members is regulatory approval in Maryland, home to FirstEnergy’s Potomac Edison. In May, the Maryland Office of People’s Counsel petitioned the Maryland Public Service Commission to investigate FirstEnergy over its alleged $61 million bribery and racketeering scheme involving former speaker of the Ohio House of Representatives Larry Householder (R) and House Bill 6. (See FirstEnergy Seeking Deal with DOJ in Bribery Case.)

Lawyers from Potomac Edison responded to the OPC’s petition with its own letter to the PSC, arguing that the petition should be denied because the allegations were “baseless or are built upon a misunderstanding (or misstating) of publicly-available facts.”

The Maryland PSC has yet to respond to the OPC or Potomac Edison or to begin an official proceeding.