FTC Staff Files Comment with FERC about Electric Power Industry Merger Filing Requirements

The staff of the Federal Trade Commission on September 11 filed a comment with the Federal Energy Regulatory Commission (FERC) in response to its request for comments about the agency's revised filing requirements for electric power industry mergers.

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. The agency's staff has submitted numerous comments concerning these issues at both the federal and state levels. Moreover, the FTC has reviewed proposed mergers between electric and gas utility companies and non-utility companies.

The staff comment notes that FERC has adopted the Department of Justice/FTC Horizontal Merger Guidelines as a framework for merger analysis and that this is the first opportunity FERC has had to revisit its merger clearance process and to consider new developments in merger analysis techniques.

The primary theme of the FTC staff's comment is that FERC may wish to expand its merger analysis beyond its current strong emphasis on market share information. In a wide variety of instances, the information available to FERC and its staff appears to be substantially more limited in quantity, quality, and scope than the information that can be obtained using the procedures available to the federal antitrust agencies. Accordingly, FERC may wish to pursue authority, as part of its merger review process, to subpoena and hold under strong confidentiality provisions, the following materials: decision, planning, and marketing documents of the merging parties, and related documents of competitors, suppliers, customers and trade associations.

In addition to improving access to information, the comment indicates seven areas in which FERC may wish to bring its merger filing requirements and analysis of mergers in the electric industry into closer alignment with the information requirements of the DOJ/FTC Horizontal Merger Guidelines.

With respect to merger analysis technique, the comment suggests that FERC may wish to use computer simulation modeling to evaluate alternative scenarios about future technical, economic and regulatory conditions in its electric industry merger reviews.

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. V980022)