Mergers, acquisitions, divestitures, and applications for market-based rates in a deregulating electric utility industry
In this article, the author reviews FERC's current procedures for undertaking competitive analysis. The current procedure for evaluating the competitive impact of transactions in the electric utility industry is described in Order 592, in particular Appendix A. These procedures effectively revised criteria that had been laid out in Commonwealth Edison and brought its merger policy in line with the EPAct and the provisions of Order 888. Order 592 was an attempt to provide more certainty and expedition in handling mergers. It established three criteria that had to be satisfied for a merger to be approved: Post-merger market power must be within acceptable thresholds or be satisfactorily mitigated, acceptable customer protections must be in place (to ensure that rates will not go up as a result of increased costs) and any adverse effect on regulation must be addressed. FERC states that its Order 592 Merger Policy Statement is based upon the Horizontal Merger Guidelines issued jointly by the Federal Trade Commission and the Antitrust Division Department of Justice (FTC/DOJ Merger Guidelines). While it borrows much of the language and basic concepts of the Merger Guidelines, FERC's procedures have been criticized as not following the methodology closely enough, leaving open the possibility of mistakes in market definition.
- Research Organization:
- National Economic Research Associates, San Francisco, CA (US)
- OSTI ID:
- 20013720
- Journal Information:
- Electricity Journal, Journal Name: Electricity Journal Journal Issue: 4 Vol. 12; ISSN ELEJE4; ISSN 1040-6190
- Country of Publication:
- United States
- Language:
- English
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