The Federal Energy Regulatory Commission on June 11 approved the request of CSW Power Marketing Inc. to sell energy at market-based rates due to lack of market dominance.
The FERC in May 1996 had denied an application by CSW, an affiliate of Central and South West Corp., to sell power at market-based rates (Docket Nos. ER97-1238-000 and ER96-1348-001). The approval was based on lack of a comparable, open-access transmission tariff on the systems of CSW's public utility affiliates. The FERC only allows such sales if the seller and its affiliates do not have market power in generation and transmission and cannot erect other barriers to entry.
CSW had submitted an analysis of generation dominance using the traditional hub-and-spoke model, which treated the company as a single entity. The analysis showed the market shares of capacity owned or controlled by CSW and its affiliates will not exceed levels acceptable to the FERC.
The FERC disagreed with a protest by five transmission-dependent co-ops and munis that CSW improperly defined the relevant geographic market by including Tennessee Valley Authority as a competing seller. The protestors said the CSW analysis was insufficient because it does not take into account factors from the FERC's Merger Policy Statement, such as delivered price and transmission constraints (Order No. 592, Dec. 30, 1996).