Is the price squeeze doctrine still viable in fully-regulated energy markets
Simply stated, a price squeeze occurs when a firm with monopoly power on the primary, or wholesale, level engages in a prolonged price increase that drives competitors out of the secondary, or retail level, and thereby extends its monopoly power to the secondary market. A price squeeze will not be found, however, for any short-term exercise in market power. Rather, because anticompetitive effects of a price squeeze are indirect, the price squeeze must last long enough and be severe enough to produce effects on actual or potential competition in the secondary market. In regulated electric industries, a price squeeze claim usually arises from the complex relationship between the supplier, the wholesale customer, the retail customer, and the federal and state regulators. The supplier sells electric power to both wholesale and retail customers. Wholesale transactions are regulated by federal regulators, and retail transactions are regulated at the state level. The wholesale customers in turn sell power to their retail customers. Over the last several years, there have been substantial developments in the application of the price squeeze doctrine to fully-regulated electric utilities. This article will examine the current developments in this area, and attempt to highlight the burdens potential litigants, both plaintiffs and defendants, must overcome to succeed.
- OSTI ID:
- 6499609
- Journal Information:
- Energy Law Journal; (United States), Vol. 14:1; ISSN 0270-9163
- Country of Publication:
- United States
- Language:
- English
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POLICY AND ECONOMY
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293000* - Energy Planning & Policy- Policy
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296000 - Energy Planning & Policy- Electric Power
290201 - Energy Planning & Policy- Economics- (1992-)