The antitrust wild card and electricity restructuring

Journal Article · Sat Mar 01 04:00:00 EST 1997 · Electricity Journal

DOI:https://doi.org/10.1016/S1040-6190(97)80347-8· OSTI ID:518439

Adelberg, A W; Ongman, J W

If competitive policy issues in electricity restructuring are not addressed soon--preferably in federal legislation--it`s likely that someone will use the antitrust wild card to achieve its ends. Experience teaches that this may not be the best way to make public policy. As the electric utility industry restructures, it is widely assumed that Congress, the state legislatures, and regulators will set the ground rules for the restructured markets. Experience to date would seem to confirm this view: California`s restructuring legislation, FERC`s Order 888, and the restructuring proceedings in numerous states are all examples. And yet, there remains another player whose role could be equally important: The federal judiciary. While court decisions under the antitrust laws have had little influence to date on the industry`s direction, there is reason to believe that their role could increase dramatically. Certainly this is the history of other industries that have undergone similar transformations. The authors expect that forces at work in the electric utility industry could lead to antitrust actions playing a far greater role in the industry`s future than most observers currently expect. The electric utility industry has already experienced a close brush with the potential for antitrust rulings to unravel critical elements of regulatory policy on restructuring. The DC Circuit`s now famous (or infamous) dicta in the Cajun Electric Power case illustrated how a simple antitrust principle--the prohibition on so-called tying arrangements--could defeat the FERC`s policy with respect to utilities` recovery of billions of dollars of stranded costs. The FERC rebutted that dicta in its remand decisions and elsewhere, and it appears that the issue in now moot in the Cajun litigation itself. But the tying arrangement argument is far from dead.

• OSTI ID: 518439
• Journal Information: Electricity Journal, Journal Name: Electricity Journal Journal Issue: 2 Vol. 10; ISSN ELEJE4; ISSN 1040-6190
• Country of Publication: United States
• Language: English

Related Subjects

29 ENERGY PLANNING, POLICY, AND ECONOMY
ANTITRUST LAWS
DEREGULATION
ELECTRIC POWER INDUSTRY
LEGAL ASPECTS