Mergers & Acquisitions
Joint Ventures. The Federal Trade Commission, in consultation with the Antitrust Division of the U.S. Department of Justice, issued draft antitrust...
expire on Oct. 28), but had suggested a higher bid maximum of $1,300-approximately equal to the highest observed day-ahead locational marginal price seen within the ISO, at least as of the end of June.
The FERC acknowledged that power supplies were tight, but predicted that the cap would not dry up imports from other regions since the New York ISO still maintained an installed capacity requirement. It said the weak demand-side volume was due, "at least in part, to factors that prevent retail customers from seeing the real-time hour price, rather than because [they] are inherently willing to buy electricity at any price." .
- New England. The call for bid caps had come from Nstar (holding company for Boston Edison), which had also asked for a study of market power and had cited a general failure of market mechanisms and a resulting lack of confidence by market participants. The ISO itself had opposed bid caps.
In imposing the cap, the FERC agreed that the New England power market did not operate in a competitive manner: "New England's existing market rules make it profitable for generators to submit very high bids for a small portion of their capacity. ... When OP4 [emergency] conditions are declared ... generators know that virtually all bids will be accepted."
The FERC observed that New England's "clearing-price" form of auction was designed to encourage bidding at cost, but that the region's "actual experience" had not been "fully consistent with these bidding expectations." It added, "[P]rices in New England are vulnerable to spikes during OP4 conditions that are vastly in excess of prices at other times." .
El Paso + Coastal. The FERC OK'd the merger between El Paso Energy Corp. and The Coastal Corp., finding no significant competitive concerns despite the fact that the two partners would be combining their merchant generation assets with upstream coal and natural gas fuel resources. .
NiSource + Columbia Energy. The Virginia Corporation Commission OK'd the proposed merger of NiSource Inc. and Columbia Energy Group, completing the last of nine necessary state actions required for the merger. .
The FERC also approved the merger. It acknowledged monopoly attributes in some power markets affected by the merger, but said the combining of natural gas properties under the deal would not affect prices much. .
Post-Merger Job Cuts. The New York PSC denied a petition filed by the Communications Workers of America alleging that New York Telephone Co. had violated the PSC's 1997 merger approval order for Bell Atlantic and NYNEX when it transferred certain back-office clerical jobs out of state. The PSC explained that the positions in question had not involved any "major job function." (The transferred employees corrected toll billing errors.)
"A typical benefit of any merger is the improved efficiency by combining redundant job functions," the PSC said. "The Commission expected that Bell Atlantic would take advantage of opportunities to achieve such efficiencies, and that they might include the movement of minor job functions in and out of New York State." .
WPS + Wisconsin Fuel & Light. After announcing