FTC Staff Files Comment With Michigan Public Service Commission

The staff of the Federal Trade Commission on August 10 filed a comment with the Michigan Public Service Commission (MPSC) about its staff report, "Staff Market Power Discussion Paper." The paper presents an overview of factors likely to affect market power as Michigan moves toward retail competition in the electric industry.

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

In its comment, the FTC staff noted that the MPSC may wish to consider several competition policy themes, including the issue of horizontal market power in electricity generation. Additionally, the agency's comment suggested that Michigan officials may wish to supplement two aspects of its paper by developing a more detailed market power assessment (including use of computer simulation models), and by considering structural remedies (including divestiture of electricity generation assets) as part of the introduction of retail competition in Michigan if existing generation market power is substantial.

The Commission vote to approve the staff 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.

(FTC File No. V980019)