FERC Asserts Jurisdiction in Nontraditional Mergers

Fortnightly Magazine - June 15 1997
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The Federal Energy Regulatory Commission has approved three orders that together clarify the Commission's jurisdiction over corporate realignments.

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The FERC found on April 30, that while it does not have jurisdiction over mergers of public utility holding companies, it does have jurisdiction over transfers of control (dispositions) of public utility facilities. The commission said its jurisdiction covers transfers of control that result from public utility mergers, including transfers of power marketer "paper" facilities such as contracts, and physical facilities such as transmission lines. The three merger applicants had argued such approval was not within FERC's domain.

FERC Commissioner Donald F. Santa Jr. pointed out that although the unusual combinations fell

outside traditional utility mergers, these "kinds of transactions we're seeing today may be more pro-competitive than those of traditional vertically integrated utilities we have looked at in the past."

As competition grows, the FERC said it has a responsibility to the public to examine corporate realignment of jurisdictional facilities of both traditional public utilities and utility power marketers.

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