Special Report

Fortnightly Magazine - October 1 1998
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FORCING A DIVESTITURE SHOULD REMAIN AN OPTION for regulators in a clear case of market power abuse, NARUC members have agreed.

NARUC's executive committee also has opened discussion on a five-year business plan that would increase the association's visibility, improve its technology and make better use of the $10 million it has in reserves.

Members at the National Association of Regulatory Utility Commissioners summer meetings in Seattle, Wash., asked states to give them "clear and adequate authority" to protect consumers from market power. That local authority should require behavioral and structural remedies, such as divestiture, they say.

The resolution, approved at the July 26-29 gathering, refined an earlier resolution tabled at NARUC's winter meetings earlier this year in Washington, D.C.

The earlier proposal called more directly for structural solutions rather than giving regulators an array of options. The latest version also doesn't provide the Federal Energy Regulatory Commission with additional tools to deal with market power. "That was seen as going beyond where the [commissioners] wanted to go," says Charles D. Gray, NARUC general counsel. "It was seen at this point as easier to do it in two bites rather than one and focus this meeting on primarily the state role on market power and the resolution would be silent as to the FERC."

The resolution does call for cooperation with federal agencies such as the Federal Trade Commission, the Department of Justice and the FERC to help monitor and correct market concentration, entry barriers, collusion and other anti-competitive practices.

A "Dialogue" With DOJ, FTC

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