Client Alert
| February 17, 2012
FERC Declines to Revise its Merger Review Standards
In a February 16, 2012 order, the Federal Energy Regulatory Commission (“FERC”) decided against revising its approach to examining horizontal market power concerns under Sections 203 and 205 of the Federal Power Act (“FPA”) to reflect the new Horizontal Merger Guidelines issued by the Department of Justice (“DOJ”) and Federal Trade Commission (“FTC”) (collectively, “Antitrust Agencies”) on August 19, 2010 (“DOJ/FTC 2010 Guidelines”). Some were monitoring this FERC proceeding to see whether changes to FERC’s approach to analyzing market power would have any effect on two large transactions currently pending before FERC – the proposed Constellation-Exelon merger and the proposed Duke-Progress merger. As background, FERC analyzes horizontal market power in the Section 203 context in the approval process for certain M&A transactions involving public utilities. In the Section 205 context, FERC analyzes horizontal market power to determine whether to authorize public utilities to charge market-based rates for wholesale sales of electric energy, capacity, and/or ancillary services.
This memorandum is intended only as a general discussion of these issues. It is not considered to be legal advice. We would be pleased to provide additional details or advice about specific situations. For additional information on this important topic, please feel free to call upon your Dewey & LeBoeuf relationship partner. No part of this publication may be reproduced, in whole or in part, in any form, without our prior written consent.
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