The pending merger of El Paso Electric Co. (EPE) and Central and South West Services, Inc. (CSW) keeps going and going and going. But the issue of "comparability" has yet to be left in the dust. And so another landmark case looms large, giving the Federal Energy Regulatory Commission (FERC) another opportunity to shape future wheeling and merger transactions.
CSW has asked for rehearing of a FERC order holding that the proposed merger between CSW and the bankrupt EPE cannot be approved unless the parties agree to provide comparable transmission services (Docket Nos. EC94-7-000 and ER94-898-000). The comparability standard, created last year in a case involving American Electric Power Service Corp., says that an open-access transmission tariff, to qualify as not unduly discriminatory or anticompetitive, must offer parties access on a comparable basis, under the same terms and conditions as the transmission provider's use of the system (Docket No. ER93-540-001).
CSW is challenging the application of the new policy to its proposed merger, claiming that the FERC has departed from precedent without a clear factual basis and has exceeded its authority under the Federal Power Act (FPA). Traditionally, the FERC looked to see whether a merger would adversely affect competition in relevant markets. If so, it considered whether point-to-point open-access tariffs would serve to mitigate the harm. Although CSW offered point-to-point transmission services, the FERC found these inadequate.