Ensource Cancels Out in Jurisdictional Ploy

Fortnightly Magazine - March 1 1997
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Recharge the Economy with Renewable Energy Tax Credits

The Federal Energy Regulatory Commission allowed Ensource, a subsidiary of Pacific Enterprises, to cancel its authorization to engage in power marketing activities at market-based rates.

Intervenors protested that Ensource pursued the cancellation as a tactical maneuver to remove the proposed merger between Pacific Enterprises and Enova from FERC review. They claim that the merger applicants ultimately would resume Ensource's operations and make it part of a post-merger joint venture to market electricity, natural gas and energy-related services at market-based rates. They further argue that allowing Ensource to cancel its rate schedule would be contrary to FERC's intent not to "elevate corporate form over economic substance" in its review of proposed mergers [Re Illinois Power Co. 67 FERC ¶ 61,136 at 61,354 (1994)].

In fact, Enova, the parent company of San Diego Gas & Electric Co., and Pacific Enterprise, the parent company of Southern California Gas Co., have asked FERC to disclaim jurisdiction over the proposed merger, claiming that FERC approval under the Federal Power Act is not needed to reorganize businesses into a holding company.

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