WASHINGTON (Legal Newsline) — The Federal Trade Commission
(FTC) and the Department of Justice’s Antitrust Division
announced Nov. 28 the submission of a comment to the U.S. Federal Energy
Regulatory Commission (FERC) regarding market power in wholesale electricity
The FERC had petitioned for comments on the way it assesses
market power when it comes to mergers and electricity sales at market-based
rates. The commission evaluates these issues under the Federal Power Act (FPA).
In the agencies’ comment, they praise
FERC for opening an inquiry as the market has changed in the last 20 years
and could use a re-examination. Electricity markets evolved because of the
development of new markets, new technologies and the exponential growth of
The agencies stated that FERC should not rely only on
structural indicators of market power because certain features of electricity
markets make them susceptible to the exercise of market power. Electricity markets
can involve annual sales of billions of dollars. Therefore, even a small
percentage increase in price from a market power exercise can harm consumers.
The FTC voted 3-0 to authorize the staff comment.