FERC Decides Against Revising Policy in U.S. Utility Mergers
The Federal Energy Regulatory Commission won’t update its policies for reviewing utility mergers, rejecting a looser definition of market power adopted by two antitrust agencies and backed by companies.
FERC decided today to retain existing merger-analysis guidelines, rather than follow the Justice Department and Federal Trade Commission policies issued in 2010.
The two agencies “were actually loosening up their guidelines,” FERC Chairman Jon Wellinghoff told reporters after the commission’s monthly meeting in Washington. “We didn’t think it was appropriate to loosen them up.”
The regulator is weighing mergers that would create two of the largest U.S. utilities. The commission on Dec. 14 rejected Duke Energy Corp. (DUK)’s plan to ease competition concerns posed by the Charlotte, North Carolina-based company’s proposed takeover of Progress Energy Inc. (PGN) of Raleigh. The proposed union of Exelon Corp. (EXC) of Chicago and Constellation Energy Group Inc. (CEG) of Baltimore, Maryland, also is pending at the agency.
Duke Energy next week may give FERC a plan to alleviate concerns that buying Progress would let it manipulate power prices, Chief Executive Officer James E. Rogers said on an investor conference call today.
FERC had sought public comments about its guidelines for assessing market control in mergers, including possibly loosening the standard. The Justice Department and FTC in August 2010 raised the threshold and placed less emphasis on a set formula to consider the effects on competition after a merger, according to a March 2011 FERC press release.
Standards adopted by the antitrust agencies “provide a reliable guidepost,” the Edison Electric Institute said in comments filed with FERC on May 23 urging consideration of a revised guidelines.
Dan Riedinger, a spokesman for the institute, said in an e- mail that he was seeking comment on the agency’s decision.
Public power groups opposed changes.
“The electricity industry has not undergone fundamental changes that warrant relaxing the commission’s existing thresholds,” the American Public Power Association and National Rural Electric Cooperative Association said in comments filed May 23.
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