Is One Merger as Good as Another?
In late November, the Federal Energy Regulatory Commission (FERC) put off immediate approval of the proposed merger between The Washington Water Power Co. and Sierra Pacific Resources (to form "Altus"), and set the case for hearing. The reason? The FERC doubted whether the merger would achieve operational efficiencies between the two noncontiguous utilities.
In particular, the FERC said the Altus merger would achieve "no fuel savings related to integrated operations and central dispatch." The two companies will operate "as two separate electric control areas and will not be jointly dispatched as a single integrated system." See FERC Dkt. Nos. EC94-23-000, ER95-808-000, Nov. 29, 1995 (draft order).
Will other mergers fare better? Here is a normalized comparison of savings from the Altus merger with savings projected by Baltimore Gas & Electric Co. and Potomac Electric Power Co. for their proposed merger ("Constellation Energy"). t