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BRG Experts Provide Comments to FERC’s Horizontal Market Power Notice of Inquiry

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June 2, 2011
BRG Energy Alert

Responding to the Federal Energy Regulatory Commis­sion’s request for public input on its approach to examining horizontal market power concerns in electricity mergers, BRG energy experts filed comments addressing whether a revised approach is warranted in light of the new Horizontal Merger Guidelines issued jointly by the Department of Justice and Federal Trade Commission in August 2010.

It is widely recognized by antitrust practitioners that the old HHI screening thresholds were too low and did not correspond to DOJ/FTC practice. Before FERC adopts new screening thresholds, the BRG experts’ comments recommended that FERC conduct or seek out studies related to the competitive impacts of consummated elec­tricity mergers. These studies will help FERC better identify and clarify competitive concerns and determine appropriate new screening thresholds. In a separate set of comments, a BRG expert recommended that if FERC does adopt the 2010 Guidelines’ HHI threshold for deter­mining whether markets are highly concentrated in electric industry merger reviews and when granting market-based rate authority to electric utilities, that it consider adopting those same criteria for determining whether markets are highly concentrated in the context of natural gas storage facilities requesting market-based rate authority.

The views expressed are those of the authors and not intended to represent those of Berkeley Research Group or other experts at BRG.

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