메뉴 건너뛰기




Volumn 12, Issue 4, 1999, Pages 27-36

Mergers, acquisitions, divestitures, and applications for market-based rates in a deregulating electric utility industry

Author keywords

[No Author keywords available]

Indexed keywords

MERGERS AND ACQUISITIONS;

EID: 0033130624     PISSN: 10406190     EISSN: None     Source Type: Journal    
DOI: 10.1016/S1040-6190(99)00024-X     Document Type: Article
Times cited : (1)

References (50)
  • 1
    • 85168777423 scopus 로고    scopus 로고
    • For a recent example of a decision on such a matter, see New York State Electric & Gas Corporation, NGE Generation, Inc., Pennsylvania Electric Company Mission Energy Westside, Inc., Docket No. EC98-64-000 Order Authorizing Disposition Of Jurisdictional Facilities Issued Jan. 13, 1999
    • 1. For a recent example of a decision on such a matter, see New York State Electric & Gas Corporation, NGE Generation, Inc., Pennsylvania Electric Company Mission Energy Westside, Inc., Docket No. EC98-64-000 Order Authorizing Disposition Of Jurisdictional Facilities Issued Jan. 13, 1999.
  • 2
    • 0032119348 scopus 로고    scopus 로고
    • The analytic approach to measuring horizontal market power in electric utility markets: A historical perspective
    • July
    • 2. For a description of the history of the Commission's policies in assessing market power in the electric utility industry, see Walter Surratt The Analytic Approach to Measuring Horizontal Market Power in Electric Utility Markets: A Historical Perspective, Elec. J., July 1998 at 22-33.
    • (1998) Elec. J. , pp. 22-33
    • Surratt, W.1
  • 3
    • 0041464148 scopus 로고    scopus 로고
    • Antitrust policy in the new electricity industry
    • 16 U.S.C. § 824b(a) (1994), f.n. 8
    • 3. 16 U.S.C. § 824b(a) (1994) Cited in Richard J. Pierce, Jr., Antitrust Policy in the New Electricity Industry, Energy Law J. (1996) at 30, f.n. 8.
    • (1996) Energy Law J. , pp. 30
    • Pierce R.J., Jr.1
  • 4
    • 85168782463 scopus 로고    scopus 로고
    • 15 U.S.C. § 18a (1994), Cited in Pierce, supra note 3 at 30, f.n. 8
    • 4. 15 U.S.C. § 18a (1994), Cited in Pierce, supra note 3 at 30, f.n. 8.
  • 5
    • 85168783490 scopus 로고    scopus 로고
    • 18 CFR Part 2 [Docket No. RM96-6-000; Order No. 592] 61 FERC 68,595, Dec. 30, 1996. Inquiry Concerning the Commission's Merger Policy Under the Federal Power Act; Policy Statement. This can be found on the Internet by searching "GPO Access" at
    • 5. 18 CFR Part 2 [Docket No. RM96-6-000; Order No. 592] 61 FERC 68,595, Dec. 30, 1996. Inquiry Concerning the Commission's Merger Policy Under the Federal Power Act; Policy Statement. This can be found on the Internet by searching "GPO Access" at http://www.access.gpo.gov/su_docs/ aces/aces140.html.
  • 6
    • 85168787316 scopus 로고    scopus 로고
    • Commonwealth Edison Co. (Commonwealth), 36 FPC 927,931 (1966), aff'd sub nom. Utility Users League v. FPC, 394 F.2d 16 (7th Cir. 1968), cert. denied, 393 U.S. 953 (1968).
    • 6. Commonwealth Edison Co. (Commonwealth), 36 FPC 927,931 (1966), aff'd sub nom. Utility Users League v. FPC, 394 F.2d 16 (7th Cir. 1968), cert. denied, 393 U.S. 953 (1968).
  • 7
    • 85168782056 scopus 로고    scopus 로고
    • It is FERC's objective to complete the review of a merger within five months of the filing of a completed application. See FERC Merger and Acquisition Policy, Speech by Commissioner William Massey, July 16, 1998. Available at
    • 7. It is FERC's objective to complete the review of a merger within five months of the filing of a completed application. See FERC Merger and Acquisition Policy, Speech by Commissioner William Massey, July 16, 1998. Available at http://www.ferc.fed.us/intro/oea/ mass7-16.pdf.
  • 8
    • 85168784625 scopus 로고    scopus 로고
    • 61 FERC ¶ 68,595 at 68,596
    • 8. 61 FERC ¶ 68,595 at 68,596
  • 9
    • 85168780814 scopus 로고    scopus 로고
    • note
    • 9. The Guidelines can be viewed on the Internet at the Federal Trade Commission's Web page at www.ftc.gov/bc/ docs/horizmer.htm and can be down-loaded from the Department of Justice's Web page at www.usdoj.gov/atr/ guidelin.htm. The Guidelines are being increasingly invoked by the courts and by several state utility commissions. For instance, the decision of the California Public Utilities Commission on the proposed merger between Southern California Edison and San Diego Gas and Electric cited to the then-current version of the Guidelines extensively (Decision 91-05-028. App. 88-12-035, 1991.) See also State Regulatory Agency Refers Probe to ALJ on Legality of Utility Merger, 73 Antitrust & Trade Reg. Rep. (BNA) 264 (Sept. 11, 1997) referring to Pennsylvania PUC's Decision to evaluate the proposed merger on the basis of the DOJ/FTC Merger Guidelines. Cited in 1998 Annual Report of the Section of Public Utility, Communications and Transportation Law, at 46.
  • 10
    • 85168781698 scopus 로고    scopus 로고
    • 53 FERC ¶ 61,473 (Dec. 31, 1990) at 62,664
    • 10. 53 FERC ¶ 61,473 (Dec. 31, 1990) at 62,664.
  • 11
    • 85168792712 scopus 로고    scopus 로고
    • The Commission has made it clear that it will not address retail issues in reviewing mergers unless state commissions request that they do so. See Baltimore Gas and Electric Company and Potomac Electric Power Company Docket Nos. EC96-10-000 and ER96-784-000 Opinion and Order Authorizing Proposed Merger (Opinion No. 412), at 16, citing the Merger Policy Statement
    • 11. The Commission has made it clear that it will not address retail issues in reviewing mergers unless state commissions request that they do so. See Baltimore Gas and Electric Company and Potomac Electric Power Company Docket Nos. EC96-10-000 and ER96-784-000 Opinion and Order Authorizing Proposed Merger (Opinion No. 412), at 16, citing the Merger Policy Statement.
  • 12
    • 85168782902 scopus 로고    scopus 로고
    • 77 FERC 61,265 (1996) at 62,085 citing 77 FERC ¶ 61,204 at 84-86
    • 12. 77 FERC 61,265 (1996) at 62,085 citing 77 FERC ¶ 61,204 at 84-86.
  • 13
    • 85168784578 scopus 로고    scopus 로고
    • note
    • 13. For example, it may be possible to bundle different products from varying sources in order to provide a substitute for long-term capacity, as was found in assessing an application by Public Service of Indiana (PSI) to sell 450 MW of firm power at market-based rates and a commitment to file open access transmission tariffs. FERC defined the relevant market as the market for long-term firm delivered power. "PSI's product market will include all products that can be substituted for PSI's product, including components of long-term firm delivered base-load power that can be bundled with complementary products from other sources." Public Service Co. of Indiana, Inc., Docket Nos. ER89-672-000 and ER89-672-001, 51 FERC (CCH) ¶ 61,367 (1990) at 62,193, June 28, 1990.
  • 14
    • 85168778005 scopus 로고    scopus 로고
    • Entergy 58 FERC (CCH) ¶ 61,234 (1992) at 61,755
    • 14. Entergy 58 FERC (CCH) ¶ 61,234 (1992) at 61,755.
  • 15
    • 85168786159 scopus 로고    scopus 로고
    • See, for instance, the comments of the Edison Electric Institute on Federal Energy Regulatory Commission, 18 CFR Part 33, Docket No. RM98-4-000, Notice of Proposed Rulemaking, Revised Filing Requirements, issued April 16, 1998
    • 15. See, for instance, the comments of the Edison Electric Institute on Federal Energy Regulatory Commission, 18 CFR Part 33, Docket No. RM98-4-000, Notice of Proposed Rulemaking, Revised Filing Requirements, issued April 16, 1998.
  • 16
    • 85168791633 scopus 로고    scopus 로고
    • FERC has also indicated that three "wheels" are enough to exclude a utility from consideration as a participant in a relevant destination market for short-term energy. Three wheels refers to the number of third-party transmission systems to be used. See for instance, Inquiry Concerning the Commission's Policy on the Use of Computer Models in Merger Analysis; Notice of Request for Written Comments and Intent To Convene a Technical Conference, FR Vol. 63, No. 79, April 24, 1998, at 20,401
    • 16. FERC has also indicated that three "wheels" are enough to exclude a utility from consideration as a participant in a relevant destination market for short-term energy. Three wheels refers to the number of third-party transmission systems to be used. See for instance, Inquiry Concerning the Commission's Policy on the Use of Computer Models in Merger Analysis; Notice of Request for Written Comments and Intent To Convene a Technical Conference, FR Vol. 63, No. 79, April 24, 1998, at 20,401.
  • 17
    • 85168789401 scopus 로고    scopus 로고
    • Order 592, Merger Policy Statement, Appendix A, Section B. 3.a
    • 17. Order 592, Merger Policy Statement, Appendix A, Section B. 3.a.
  • 18
    • 85168789013 scopus 로고    scopus 로고
    • Order 592, Merger Policy Statement, Appendix A, Section B.3.c
    • 18. Order 592, Merger Policy Statement, Appendix A, Section B.3.c.
  • 19
    • 85168784694 scopus 로고    scopus 로고
    • Some of the data requirements and data sources to undertake this test are described in Staff's Framework for a Delivered Price Test Without a Model in Inquiry Concerning the Commission's Policy on the Use of Computer Models in Merger Analysis; Notice of Request for Written Comments and Intent To Convene a Technical Conference, FR Vol. 63, No. 79 April 24, 1998, at 20,401
    • 19. Some of the data requirements and data sources to undertake this test are described in Staff's Framework for a Delivered Price Test Without a Model in Inquiry Concerning the Commission's Policy on the Use of Computer Models in Merger Analysis; Notice of Request for Written Comments and Intent To Convene a Technical Conference, FR Vol. 63, No. 79 April 24, 1998, at 20,401.
  • 20
    • 85168780070 scopus 로고    scopus 로고
    • Significantly within the meaning of the Horizontal Merger Guidelines
    • 20. Significantly within the meaning of the Horizontal Merger Guidelines.
  • 21
    • 85168788400 scopus 로고    scopus 로고
    • Appendix A, Section B.3.a
    • 21. Appendix A, Section B.3.a.
  • 22
    • 85168779077 scopus 로고    scopus 로고
    • Appendix A, Section B.3.b
    • 22. Appendix A, Section B.3.b.
  • 23
    • 85168777999 scopus 로고    scopus 로고
    • 77 FERC ¶ 61,265 (1996) at 62,084
    • 23. 77 FERC ¶ 61,265 (1996) at 62,084.
  • 24
    • 85168782512 scopus 로고    scopus 로고
    • Id.
    • 24. Id.
  • 25
    • 85168782180 scopus 로고    scopus 로고
    • Opinion No. 413, Docket No. EC95-16-000, issued May 14, 1997. See Section IX.A.3
    • 25. Opinion No. 413, Docket No. EC95-16-000, issued May 14, 1997. See Section IX.A.3.
  • 26
    • 85168793078 scopus 로고    scopus 로고
    • Section 2, Merger Guidelines
    • 26. Section 2, Merger Guidelines.
  • 27
    • 85168789055 scopus 로고    scopus 로고
    • The step is described in Section B.4 of Appendix A
    • 27. The step is described in Section B.4 of Appendix A.
  • 28
    • 85168784719 scopus 로고    scopus 로고
    • They are "the 'mid-merit order' generating units which are likely to be the units providing the final increment in the supply portfolio. The concentration of ownership of this group of assets might be more important than overall generation concentration. In both cases, the powerful entity may control the final increment in the market-clearing supply portfolio and thus control the marginal price for generation." CPUC, D.95-12-063, Dec. 20, 1995, as corrected by CPUC D.96-01-009, Jan 10, 1996, Chapter 4 available at See also the description of PG&E's suggested methodology in Federal Energy Regulatory Commission, Pacific Gas and Electric Company, San Diego Gas & Electric Company, and Southern California Edison Company 77 FERC ¶ 61,265 Docket No. ER96-1663-000, Order Providing Guidance And Convening A Technical Conference (Dec. 18, 1996), at 62,081
    • 28. They are "the 'mid-merit order' generating units which are likely to be the units providing the final increment in the supply portfolio. The concentration of ownership of this group of assets might be more important than overall generation concentration. In both cases, the powerful entity may control the final increment in the market-clearing supply portfolio and thus control the marginal price for generation." CPUC, D.95-12-063, Dec. 20, 1995, as corrected by CPUC D.96-01-009, Jan 10, 1996, Chapter 4 available at http://www.cpuc.ca.gov/ restur.dec/toc.html. See also the description of PG&E's suggested methodology in Federal Energy Regulatory Commission, Pacific Gas and Electric Company, San Diego Gas & Electric Company, and Southern California Edison Company 77 FERC ¶ 61,265 Docket No. ER96-1663-000, Order Providing Guidance And Convening A Technical Conference (Dec. 18, 1996), at 62,081.
  • 30
    • 85168784901 scopus 로고    scopus 로고
    • The report offers no citation to previous regulatory or legal findings or the economic literature to support such a finding
    • 30. The report offers no citation to previous regulatory or legal findings or the economic literature to support such a finding.
  • 31
    • 85168791021 scopus 로고    scopus 로고
    • note
    • 31. Baltimore Gas and Electric Company and Potomac Electric Power Company (Docket Nos. EC96-10-000) and ER96-784-000 Opinion and Order Authorizing Proposed Merger (Opinion No. 412), at 25. Footnote 79 shows HHI changes resulting from the merger for prices of $19-20/MWh, $20-21/MWh, and so on. This analysis is based upon an attempt by the trial staff to determine the impact of the merger on concentration of "economic capacity" (which includes marginal capacity and capacity whose incremental costs are lower than those of marginal capacity). According to trial staff, marginal capacity is that capacity with costs in the range of $15 to $25/ MWh. Trial staff further argues that economic capacity is all capacity with costs at or below $25/MWh." (See p. 19.)
  • 32
    • 85168789753 scopus 로고    scopus 로고
    • For instance, the Commission found that the proposed decision in the Primergy merger application, which had found the merger was consistent with the public interest, was incorrect. Among other points the Commission made was that the applicants' "market power analysis, which does not include any HHI analyses, falls short of what the Merger Guidelines require."
    • 32. For instance, the Commission found that the proposed decision in the Primergy merger application, which had found the merger was consistent with the public interest, was incorrect. Among other points the Commission made was that the applicants' "market power analysis, which does not include any HHI analyses, falls short of what the Merger Guidelines require."
  • 33
    • 85168791555 scopus 로고    scopus 로고
    • Southwestern Public Service Company, 72 FERC ¶ 61,208 at 61,966-67 (1995), reh'g pending; Louisville Gas & Electric Company, 62 FERC ¶ 61,016 at 61,146 (1993)
    • 33. Southwestern Public Service Company, 72 FERC ¶ 61,208 at 61,966-67 (1995), reh'g pending; Louisville Gas & Electric Company, 62 FERC ¶ 61,016 at 61,146 (1993).
  • 34
    • 85168791953 scopus 로고    scopus 로고
    • Appendix A, Sections A and B.4
    • 34. Appendix A, Sections A and B.4.
  • 35
    • 85168780580 scopus 로고    scopus 로고
    • This quotation is taken from Section 2.0 of the Merger Guidelines
    • 35. This quotation is taken from Section 2.0 of the Merger Guidelines.
  • 36
    • 85168787375 scopus 로고    scopus 로고
    • Supra note 14 at 61,759
    • 36. Supra note 14 at 61,759.
  • 37
    • 0032116947 scopus 로고    scopus 로고
    • Numerical techniques for analyzing market power in electricity
    • July
    • 37. A more complete description of some of the issues raised in modeling is provided in Edward P. Kahn, Numerical Techniques for Analyzing Market Power in Electricity, Elec. J., July 1998, at 34-43.
    • (1998) Elec. J. , pp. 34-43
    • Kahn, E.P.1
  • 38
    • 85168792849 scopus 로고    scopus 로고
    • Notice of Request for Written Comments and Intent to Convene a Technical Conference, Concerning the Commission's Policy on the Use of Computer Models in Merger Analysis, April 16, 1998, Docket No. PL98-6-000
    • 38. Notice of Request for Written Comments and Intent to Convene a Technical Conference, Concerning the Commission's Policy on the Use of Computer Models in Merger Analysis, April 16, 1998, Docket No. PL98-6-000.
  • 39
    • 85168792790 scopus 로고    scopus 로고
    • Re DQE Inc.,186 P.U.R.4th 39 1998 WL 406768_(Pa.P.U.C.)
    • 39. Re DQE Inc.,186 P.U.R.4th 39 1998 WL 406768_(Pa.P.U.C.)
  • 40
    • 0003594143 scopus 로고
    • Wiley Press
    • 40. For a description of the use of these models, see H. Stoll, Least Cost Electric Utility Planning, (Wiley Press, 1989) and Edward P. Kahn, Electric UtilityPlanning and Regulation (American Council for an Energy Efficient Economy, Second Ed., 1991) and Edward P. Kahn, Regulation by Simulation: The Use of ProductionCost Models in Electricity Pricing and Planning, Operations Res., 43(3) 1995.
    • (1989) Least Cost Electric Utility Planning
    • Stoll, H.1
  • 41
    • 0004093907 scopus 로고
    • American Council for an Energy Efficient Economy, Second Ed.
    • 40. For a description of the use of thesemodels, see H. Stoll, Least Cost Electric Utility Planning, (Wiley Press,1989) and Edward P. Kahn, Electric UtilityPlanning and Regulation (American Council for an Energy Efficient Economy, Second Ed., 1991) and Edward P. Kahn, Regulation by Simulation: The Use of Production Cost Models in Electricity Pricing and Planning, Operations Res., 43(3) 1995.
    • (1991) Electric Utility Planning and Regulation
    • Kahn, E.P.1
  • 42
    • 0000481099 scopus 로고
    • Regulation by simulation: The use of production cost models in electricity pricing and planning
    • 40. For a description of the use of these models, see H. Stoll, Least Cost Electric Utility Planning, (Wiley Press, 1989) and Edward P. Kahn, Electric Utility Planning and Regulation (American Council for an Energy Efficient Economy, Second Ed., 1991) and Edward P. Kahn, Regulation by Simulation: The Use of Production Cost Models in Electricity Pricing and Planning, Operations Res., 43(3) 1995.
    • (1995) Operations Res. , vol.43 , Issue.3
    • Kahn, E.P.1
  • 43
    • 85168790103 scopus 로고    scopus 로고
    • note
    • 41. See, for instance, Severin Borenstein, James Bushnell, and Christopher Knittel, Comments of the University of California Energy Institute on the Use of Computer Models for Merger Analysis in the Electric Utility Industry, June 15, 1998. "There is, however, another class of models that do attempt to explicitly model strategic behavior. Indeed it is often far more important to represent the strategies of producers than to model their physical production characteristics in minute detail." The Department of Justice suggests that an appropriate model should simulate the profit-maximizing behavior of the hypothetical monopolist.
  • 44
    • 85168790906 scopus 로고    scopus 로고
    • These rates, once set, are subject to the non-discrimination and other restrictions that are part of tariff setting
    • 42. These rates, once set, are subject to the non-discrimination and other restrictions that are part of tariff setting.
  • 45
    • 85168781361 scopus 로고    scopus 로고
    • Pacific Gas and Electric Company, San Diego Gas & Electric Company, and Southern California Edison Company, Docket No. ER96-1663-000, Order Providing Guidance and Convening a Technical Conference, Dec. 18, 1996. 77 FERC ¶ 61,265
    • 43. Pacific Gas and Electric Company, San Diego Gas & Electric Company, and Southern California Edison Company, Docket No. ER96-1663-000, Order Providing Guidance and Convening a Technical Conference, Dec. 18, 1996. 77 FERC ¶ 61,265
  • 46
    • 85168787408 scopus 로고    scopus 로고
    • Rule 888, at 7. This language copies that found in Enron Power Enterprises, in which a successful bidder in a competitive auction applied for a finding that its rates were just and reasonable. 52 FERC (CCH) ¶ 61,193 (1990) at 61,708, and 85 FERC ¶ 61,379 Federal Energy Regulatory Dec. 17
    • 44. Rule 888, at 7. This language copies that found in Enron Power Enterprises, in which a successful bidder in a competitive auction applied for a finding that its rates were just and reasonable. 52 FERC (CCH) ¶ 61,193 (1990) at 61,708, and 85 FERC ¶ 61,379 Federal Energy Regulatory New England Power Pool Order Conditionally Accepting Market Rules, And Conditionally Approving Market-Based Rates, Dec. 17, 1998.
    • (1998) New England Power Pool Order Conditionally Accepting Market Rules, and Conditionally Approving Market-based Rates
  • 47
    • 85168784278 scopus 로고    scopus 로고
    • As stated in 77 FERC ¶ 61,265 (1996)
    • 45. As stated in 77 FERC ¶ 61,265 (1996).
  • 48
    • 85168778668 scopus 로고    scopus 로고
    • Enron had 4 percent of the generation capacity in the relevant market and no transmission facilities
    • 46. Enron had 4 percent of the generation capacity in the relevant market and no transmission facilities.
  • 49
    • 85168790489 scopus 로고    scopus 로고
    • Supra note 14 at 61,752
    • 47. Supra note 14 at 61,752.
  • 50
    • 85168778943 scopus 로고    scopus 로고
    • note
    • 48. See for example, AES Huntington Beach, L.L.C 83 FERC ¶ 61,100. et al. Docket No. ER98-2184-"Order Accepting For Filing Proposed Market-Based Rates And Denying Request For Waiver Of Filing Requirement" (April 30, 1998). See also Pennsylvania Power & Light Company "Order Conditionally Accepting For Filing Proposed Market-Based Rates" 80 FERC ¶ 61,053, July 17, 1997, finding, under item 3, that if the applicant abused its ownership of oil and gas pipelines by denying access or imposing unreasonable terms on competitors, those competitors could complain to the Commission.


* 이 정보는 Elsevier사의 SCOPUS DB에서 KISTI가 분석하여 추출한 것입니다.