Public utilities could face different levels of scrutiny in merger reviews before the U.S. Federal Energy Regulation Commission, and the Department of Justice and the Federal Trade Commission (the Antitrust Agencies).

On February 16, 2011, the U.S. Federal Energy Regulation Commission (FERC) issued an order (138 FERC ¶ 61,109) reaffirming its existing merger review policies for analyzing horizontal market power under Section 203 of the Federal Power Act (FPA) and terminated proceedings to consider incorporating the 2010 Horizontal Merger Guidelines (2010 Merger Guidelines) issued by the Department of Justice and the Federal Trade Commission (collectively, the Antitrust Agencies).

Overlapping Review Under Different Standards

Utility mergers are subject to competition review by the Antitrust Agencies and by FERC.  The Antitrust Agencies review potential transactions under Section 7 of the Clayton Act, which prohibits an acquisition if it tends to substantially lessen competition.  The 2010 Merger Guidelines, which considerably revised the Antitrust Agencies’ 1992 Merger Guidelines, articulate the ways in which the Antitrust Agencies analyze mergers and acquisitions involving actual or potential competitors.

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