U.S. Energy Regulator Examines Beefing Up Utility Merger Reviews
(Bloomberg) -- U.S. energy regulators are considering whether they need to tighten up the review process for utility mergers, in the latest attempt to crack down on price gouging.
The Federal Energy Regulatory Commission may look to implement tougher checks on pending mergers and acquisitions, forcing companies to provide more information on their generating capacity and market share, the agency said Thursday in Washington. The extra safeguards would be used to determine if the transactions undermine competition in the markets, allowing sellers to unfairly raise prices.
Under the leadership of Chairman Norman Bay, a former chief of the agency’s enforcement division, the commission has taken a number of steps to clamp down on market violations, including a proposal to step up checks for power traders. The agency uses different sets of rules for approving deals and for authorizing generators to sell power at rates set by the market. The agency wants to assess whether bringing the rules in line with each other is “warranted and feasible."
“This is a common sense reform” that the commission is considering, Tyson Slocum, Washington-based director of energy at consumer advocacy group Public Citizen, said by phone. “Any time FERC is improving the criteria used to assess a merger or acquisition it’s going to benefit consumers, because you’re forcing the companies to do a better job of proving that the transaction won’t result in market power.”
The agency is seeking comment on types of transactions that should be exempt from review. Comments on the agency’s review are due 60 days from the publication of the notice.