The Brattle Group frequently assists companies and organizations in examining competitive conditions in electricity, natural gas, pipeline, and oil markets. We advise companies and regulators on electricity and natural gas market design, on the potential for energy market manipulation, and on whether regulated firms may qualify for market-based rates. Our deep institutional knowledge and antitrust experience enables us to address competitive issues that frequently arise in energy markets.
We provide consulting and expert testimony, including economic analysis of market competitiveness, market manipulation, and monopolization in the U.S., Canada, the European Union, Australia, Brazil, Colombia, and New Zealand. Our testimony and expert reports have been presented before the U.S. Federal Energy Regulatory Commission, the U.S. Federal Trade Commission, the Australian Competition Tribunal, the Directorates General for Energy and Transport and Competition of the European Community, the Competition Bureau of the Government of Canada, and the U.S. Department of Justice.
A Brattle expert was the key economic witness on behalf of the defendant pipeline companies in two of the seminal pipeline antitrust cases tried in federal court prior to the advent of open-access regulation of gas pipelines. In State of Illinois v. Panhandle Eastern and City of Chanute v. Williams Natural Gas, our expert testimony successfully demonstrated that the pipelines lacked market power and that the pipelines’ actions did not harm consumers and had legitimate business justifications. The analysis focused on defining the relevant product and geographic markets, the behavior of prices and the behavior of potential competitors during the relevant time periods, and detailed financial analyses of potential damages. In both cases the standing of indirect purchasers to bring antitrust lawsuits was challenged under the Illinois Brick doctrine and led to the last U.S. Supreme Court review of that doctrine and its exceptions. The Brattle Group provided the economic analysis in support of the appeals under Illinois Brick.
Members of The Brattle Group testified in a multi-year investigation into the activities of a major interstate pipeline, the pipeline’s marketing affiliate, and a major local distribution company during the 2000-2001 California energy crisis in separate proceedings before the U.S. Federal Energy Regulatory Commission (FERC) and the California Public Utilities Commission (CPUC).
In the FERC proceeding, we examined natural gas price formation in California, the concentration of firm pipeline capacity holdings, utilization of pipelines serving the California gas market, withholding of pipeline capacity, and the harm to California gas and electricity consumers. We testified before the CPUC regarding the storage behavior and physical and financial trading activities of a CPUC-regulated local distribution company during the energy crisis.
On behalf of the Enforcement Litigation Staff of the FERC, we investigated the activities of a natural gas trading company over a two-year period and determined that the company manipulated the price of natural gas at a specific location through its trading patterns on the Intercontinental Exchange (ICE) trading platform. The company’s fixed-price sales transactions dominated the price index reported by Platts at that location, and its trading patterns were designed to lower the price index in order to benefit the company’s trading positions that were established to profit from downward price movements. The results of our investigation were included in a report to the FERC.
Members of The Brattle Group have provided testimony in several proceeding before the FERC regarding oil and natural gas pipelines’ market-based rates applications. Brattle’s testimony before the Federal Energy Regulatory Commission analyzed the market power held by natural gas, refined petroleum products, and crude oil pipelines seeking market-based rates. In addition to calculating traditional measures of market power, numerous issues related to relevant potential competitive concerns and the substitutability of potential competitive alternatives to the applicant pipeline were examined.