Evolving FERC Merger Policy Delays "Altus" Deal

Fortnightly Magazine - February 1 1996
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Recharge the Economy with Renewable Energy Tax Credits

It appears that The Washington Water Power Co. (WWP) and Sierra Pacific Power Co. (SPP), which were hoping for a quick OK on their proposed merger to form "Altus," may have been in the wrong place at the wrong time. Instead of a perfunctory approval, the WWP/SPP merger now may become the test case for evolving merger policy at the Federal Energy Regulatory Commission (FERC).

Perhaps the utilities should have seen it coming. In approving the Midwest Power Systems, Inc./Iowa-Illinois Gas & Electric Co. merger, FERC Commissioners William L. Massey and James J. Hoecker concurred that the FERC should reexamine its merger policy (Docket No. EC95-4-000). They predicted that once a final rule mandating open access and comparable service is in place, the sole competitive effect of future mergers may be to increase the concentration of generation assets, hindering competition. They plan to investigate that threshold as well as mergers of transmission facilities across a region and whether merger applicants should be responsible for achieving efficiency and cost reductions in the course of business outside of the merger option.

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