Murky Markets: A Review of FERC's Determination of Submarkets in Wholesale Electric Power Mergers
American Bar Association Section of Antitrust Law, The Economics Committee Newsletter, Winter 2017
The Federal Energy Regulatory Commission (FERC) is required by law to examine proposed mergers and acquisitions in order to determine whether the transactions are in the public interest. When the parties named within the transaction operate within a Regional Transmission Organization (RTO) or an Independent System Operator (ISO), the relevant geographic market is the entire RTO/ISO. However, sometimes, transmission constraints within a smaller area of the RTO may subject a region to anticompetitive price increases or abuse of market power. In those cases, FERC may designate a submarket. The submarket then becomes the relevant geographic market.
In a recent article, “Murky Markets: A Review of FERC's Determination of Submarkets in Wholesale Electric Power Mergers” (American Bar Association Section of Antitrust Law, The Economics Committee Newsletter, Winter 2017), Principal Eric Korman, Vice President Megan Accordino, Manager Charlene Zhou, and Associate Lorna Omondi analyze the motivations for the consideration of submarkets. The article also delves into to the types of analysis that inform FERC's decisions on the designation of energy submarkets.
Accordino M, Korman E, Omondi L, Zhou C