Federal Trade Commission
Protecting America's Consumers
Announced Action for January 24, 2006
FTC Staff Files Comment with Ferc on Assessing Generation Power
Commission approval of comment to the Federal Energy Regulatory Commission: The Commission has approved a comment to the Federal Energy Regulatory Commission (FERC) about economically sound ways to assess generation power in wholesale electricity markets. The comment responds to a proposed new methodology by the Edison Electric Institute (EEI) – the trade association for electric utilities – called the “historical contestable load” analysis to analyze market power.
The FTC’s comment, which can be found on the Commission’s Web site and as a link this press release, identifies five significant problems with the EEI’s proposal, based on the analysis of market power in the joint FTC/U.S. Department of Justice Horizontal Merger Guidelines. Specifically, the comment states that in each of the five areas, the proposal does not represent an analytical advance over FERC’s existing techniques to assess horizontal market power and falls far short of the economically sound framework for market power analysis presented in the Guidelines.
The comment concludes by stating that “[t]he historical contestable load proposal suffers from a number of substantial defects . . . Accordingly, the FTC recommends that FERC reject use of a contestable load in assessing generation of market power.” The Commission vote approving the comment and authorizing its transmission to FERC was 5-0. (FTC File No. V060004; the staff contact is Michael Wroblewski, Office of General Counsel, 202-326-2155.)
Copies of the documents mentioned in this release are available from the FTC’s Web site at http://www.ftc.gov and also from the FTC’s Consumer Response Center, Room 130, 600 Pennsylvania Avenue, N.W., Washington, DC 20580. Call toll-free: 1-877-FTC-HELP.
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