Federal Judge Hears Antitrust Complaints on Heat Pump Promotions

Fortnightly Magazine - May 15 1997
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A U.S. federal district judge in Pennsylvania will allow a jury to hear antitrust complaints lodged by heating oil dealers challenging certain promotional activities by Pennsylvania Power and Light Co., but it will exclude from jury deliberations any consideration of whether PP&L had established a "monopoly" in the home heating market.

During the period the utility had allegedly engaged in the promotional activities, its share of the entire home heating market had never exceeded 31 percent, the court said. The judge also ruled, however, that the utility possessed significant market power given its size in relation to individual oil heat dealers and the existence of significant barriers to entering the heating market.

The court said a jury must decide whether the utility had intended to monopolize the residential heating market and whether it had used its status as a monopoly provider of electricity as "leverage" to do so in violation of federal antitrust laws. It rejected a move by the utility to end the case at its preliminary stage.

(Earlier, the courts and state regulators had ruled in a series of cases that the utility could no longer use cash or the delivery of appliances to influence builders to exclude energy sources other than

electricity in new residential developments under so called "all-electric agreements." See, Yeager's Fuel, Inc., et al. v. PP&L, 22 F.3d 1260, 152 PUR4th 191 [3d Cir 1994].)

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