A new critical path for utility mergers: FERC declines to adopt DOJ/FTC framework for merger and market-based rates analysis

Yesterday, the Federal Energy Regulatory Commission (FERC) took a decidedly different approach to its regulatory approval for mergers and acquisitions of electric utilities by declining to adopt the Department of Justice’s (DOJ) and the Federal Trade Commission’s (FTC) (collectively “Antitrust Agencies”) 2010 Horizontal Merger Guidelines that raise the thresholds that trigger market-power concerns. In so doing, FERC reaffirmed its approach to analyzing horizontal market power concerns for proposed mergers under section 203 of the Federal Power Act using the 1992 Horizontal Merger Guidelines’ basic five-step framework, with the addition of the Competitive Analysis Screen FERC developed to aid the first step of the analysis. In declining to adopt the 2010 Guidance, FERC pointed to the unique characteristics of electricity markets that made them more susceptible to the exercise of market power than the other markets regulated by the Antitrust Agencies, and, as a result, made application of the higher market-power thresholds from the 2010 Guidelines inappropriate. FERC also declined to modify its standards for granting market-based rate applications to reflect the 2010 Guidelines.

Read: "A new critical path for utility mergers: FERC declines to adopt DOJ/FTC framework for merger and market-based rates analysis"


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