FTC Staff Files Comment with Public Utilities Commission of Nevada about Regulations Governing Electric Utilities

The staff of the Federal Trade Commission on September 22 filed a comment with the Public Utilities Commission of Nevada (PUCN) about the regulations governing regulated electric utilities and their unregulated affiliated companies.

The FTC has a longstanding interest in regulation and competition in energy markets, including proposals to reform regulation of the natural gas and electric power industries.

In its comment to the Nevada officials, the staff of the Bureau of Economics focused on four areas that the state may wish to consider as it devises its plan to govern relationships and transactions between these entities. For example:

1. The comment noted that there are fundamental trade-offs between preventing discriminatory behavior by the parent utility and preserving economies of vertical integration with its affiliate. The staff concluded that Nevada may wish to reevaluate the trade-offs after an interim period.
2. The comment suggested that the PUCN may wish to add a "market-like" institution to govern transactions between parent utilities and their affiliates that would include an objective bidding process in which a third party evaluates the bids.
3. The comment noted that the state may wish to compare the benefits and costs of allowing affiliates of regulated distribution firms to use the corporate logo of the distribution firm.
4. The FTC staff also suggested that the PUCN may wish to consider extending its rules to affiliates offering goods or services other than electric or natural gas service.

The Commission vote to file the comment was 4-0.

NOTE: The comment represents the views of staff members of the FTC’s Bureau of Economics and not necessarily the views of the Commission or any individual Commissioner.

Copies of the full text of the comment are available from the FTC’s web site at http://www.ftc.gov and also from the FTC’s Consumer Response Center, Room 130, 6th Street and Pennsylvania Avenue, N.W., Washington, D.C. 20580; 202-FTC-HELP (202- 382-4357); TDD for the hearing impaired 1-866-653-4261. To find out the latest news as it is announced, call the FTC NewsPhone recording at 202-326-2710.

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(FTC File No. V980027)