FERC Easily Approves Second Convergence Combo
guidelines. By contrast, Santa pointed out the Duke Power merger application was filed in early 1997, after the new merger policy was in force. That deal, said Santa, shows that when the circumstances are right, the FERC's approval can come easily. Commissioner Massey added that the FERC's merger policy statement merely touched on nontraditional "convergence" mergers, involving electric distributors and gas pipelines.
Massey added, "My own view is that the merger policy statement does not work well with gas and electric mergers." He pointed out that these mergers involve more traditional vertical integration problems, and not market dominance problems.
The FERC's Duke/PanEnergy decision marks the second time in recent months the commission has approved a merger between a vertically integrated electric utility and a gas company owning pipeline facilities. In February, the commission approved a similar convergence merger between Enron and Portland General Electric. In that ruling, the FERC also declined to find that gas pipeline facilities conferred market power in electric generating markets.
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