FERC analyzed while making a review of the electric utility mergers proposition, the transaction being proposed "likely effect" on (1) competition;
(2) rates; and (3) regulation. (Schlossberg, 2004)
There are stated to be "no antitrust exemptions for transactions subject to FERC review and such mergers are regularly reviewed by either the Federal Trade Commission (FTC) or the Division." (Schlossberg, 2004) The Securities and Exchange Commission had previously held jurisdiction for reviewing acquisitions of stock of electric utility companies however, the authority provided under the Public Utilities Holding Company Act of 1935 was repealed in 2005.
III. FORESEEABILITY DOCTRINE REHABILITATION
The work of Trujillo (2006) entitled: "State Action Antitrust Exemption Collides with Deregulation: Rehabilitating the Foreeseability Doctrine" states that a capitalist society that has policies which were established for the purpose of regulating "the promotion of competition in traditionally regulated industries such as the electrical market seems counterintuitive. Yet, it is a reality in the United States. In particular, traditionally rate-regulated industries, such as electricity, have been "deregulated." In this context, deregulation means opening up certain components of the industry to competition. However, regulatory mechanisms in place to prevent abuses of the competitive process are also driving this competition, resulting in a "regulated deregulation." (Trujillo, 2006)
Specifically industries that have been historically rate-regulated (electricity) "have been 'deregulated'. In this context, deregulation means opening up certain components of the industry to competition. However, regulatory mechanisms in place to prevent abuses of the competitive process are also driving this competition, resulting in a "regulated deregulation." (Trujillo, 2006)
The recent moves for deregulation of the electricity markets have emphasized that "free markets thrive where competitive structures in place do not suppress competition." (Trujillo, 2006) Before the passing of the Public Utilities Regulatory Policy Act (PURPA) in 1978 "electricity in the United States was provided by a vertically integrated firm, which provided transmission, distribution and generation service on a bundled basis.2 Since this firm had a legally conferred monopoly, state public utility commissions regulated its consumer rates. As a result, the electricity market has consisted of a structural design supporting regulatory entities that supervise and monitor the generation, transmission, and distribution of electricity to end-users. Market monitoring and intrusiveness on the part of state legislatures and regulatory agencies permeate such structures and, therefore, cannot sustain competition without additional policies intended to promote competition." (Trujillo, 2006) This only served to "re-regulate" a market that was already regulated. (Trujillo, 2006, paraphrased)
"Attempts by states to implement "pro-competition" policies without restructuring traditional regulatory paradigms have been problematic for courts." (Trujillo, 2006) Trujillo states that added to this is the tendency of courts in deferring "to agency rulings" which represents a shift in the "jurisdictional parameters" resulting in having "…empowered the state regulatory commissions." (Trujillo, 2006) Trujillo relates that antitrust law serves to "de-concentrate these industry structures and prevent price fixing where regulation cannot." (2006) Broad application of state action immunity is stated by Trujillo to have the power to "preserve old regulatory structures where regulated entities such as utilities would continue to dominate the electrical market, eliminating any possibilities of consumers benefiting from deregulatory measures promoting competition - lower prices and choices." (2006)
SUMMARY & CONCLUSION
The objective of this work was to examine a recent merger and toward this end, this work examined the merger of Equitable Resources, Inc. And the Peoples Natural Gas Company, a subsidiary of Dominion Resources, Inc. And found that this merger was claimed by the Federal Trade Commission (FTC) to violate Section 5 of the Federal Trade Commission Act and Section 7 of the Clayton Act." (2007) The Court eventually ended the merger's implementation. This case related to State Action immunity and specifically as related to deregulation of already regulated industries such as utilities in that these companies may not legally merge under the guidelines of the Federal Trade Commission (FTC) in cases where their merging would effectively put an end to competition in the specific industry of the merger. This study found that broad application of this type of state action immunity would effectively serve to strengthen the already regulated structures and that the older entities within this system would continue to dominate the market as they have historically and traditionally done. There is conflict in various areas of governance and regulation in this area of the law.
Ewing, Saul (2007) FTC Complaint May Seek to Erode 'State Action' Immunity of Utilities. Staying…