The Brattle Group frequently advises applicants, third parties, and competition authorities on mergers and acquisitions in the energy sector. We have presented expert testimony and findings on the potential competitive impacts of vertical and horizontal mergers involving electric and natural gas businesses before regulators and antitrust enforcement agencies in North America and the European Union. We have appeared before the U.S. Federal Trade Commission, the U.S. Federal Energy Regulatory Commission, the Surface Transportation Board, the Securities and Exchange Commission, the U.S. Department of Justice, various state commissions, the Canadian Competition Bureau, the Dutch Competition Authority, the European Commission, and the German Federal Cartel Office.
We use a variety of economic analyses, including a “Delivered Price Test,” the Cournot Model, and detailed simulation models to analyze a proposed merger’s effect on the market participant’s ability and incentive to exercise market power. Our knowledge and experience in energy regulation and antitrust economics, combined with our use of state-of-the-art simulation models and statistical techniques, allows us to provide reliable qualitative and quantitative assessments of the likely competitive impact of mergers and acquisitions.
The Brattle Group examined the market power impact of a Western electric utility’s purchase of a Northwestern electric utility. Our analysis required building a Delivered Price Test model of the Western System Coordinating Council (WSCC), including a detailed representation of the WSCC’s transmission system, in order to assess the horizontal market power effects of the acquisition. We evaluated competitive implications under a variety of market scenarios, analyzed the potential for exercising vertical market power, and filed a complete market power analysis at the Federal Energy Regulatory Commission (FERC).
The Brattle Group conducted a market power analysis to guide the divestiture of two merging utilities’ generation assets. As part of the project, we developed a Cournot market simulation model and conducted the FERC market share analyses. Additionally, we assessed the companies’ merger mitigation plan and examined the role of the proposed regional transmission organization (RTO) as well as the companies’ post-divestiture tariffs. The Brattle Group filed testimony before the FERC and the applicants’ state regulators.
The Brattle Group assisted utilities in opposing a merger of two large utilities with electric and gas businesses in PJM. We provided expert testimony before the FERC and the Pennsylvania Public Utility Commission on the market power concerns created by the proposed merger.
January 26, 2017
Presented at the Electric Utility Consultants, Inc. (EUCI) conference, “Financial Transmission Rights (FTRs/CRRs/TCRs)”