Federal Trade Commission Petitioned To Investigate Electric Utilities

On Could 18, a coalition of 235 client, environmental, and public curiosity teams penned a petition urging the Federal Trade Commission (“FTC”) to research alleged anticompetitive enterprise practices undertaken by electrical utilities, pursuant to Article 6(b) of the FTC Act, which empowers the company to conduct a broad investigative examine and request info. Sec. 6(b), 15 U.S.C. § 46(b).

The 42-page petition asks the FTC to research how sure unfair competitors and misleading acts allegedly undertaken by electrical utilities are purportedly harming each renewable vitality corporations competitions with these utilities and customers. 

In accordance with the petition, electrical utilities have interaction in unfair aggressive acts to guard market monopolies and to impede deployment of reasonably priced, renewable vitality. For instance, the coalition asserts that electrical utilities actively block transmission improvement that might assist allow competitors and interact in lobbying efforts and political exercise that undermine competitors. Additionally they impose unfair charges on rooftop photo voltaic vitality producers in an effort to discourage clients from adopting photo voltaic vitality, based on the petition. The utilities are stated to purposefully use their authority over distribution grids to disclaim or delay distributed vitality deployment, finally growing prices. The coalition additionally alleges that unfair mergers between electrical utilities elevate costs and result in fewer renewable vitality choices, citing a sample of charge will increase following profitable mergers.

The petition additionally claims that electrical utilities have interaction in unfair and misleading acts that hurt customers by driving up their electrical energy payments. For instance, the petition alleges that utilities have interaction in bribery, fraud, and voting interference to get pro-utility laws handed and financially help or present political favors to elected officers who signify utility pursuits. The petition contains various examples of utilities allegedly bribing members of state legislatures or participating consultants to facilitate schemes to siphon votes away from candidates who would in any other case maintain utility corporations accountable.

The coalition urges the FTC to “safeguard democracy from undue corporate influence” through the use of its energy beneath the FTC Act to conduct an Article 6(b) examine of the electrical utility business. Part 6(b) offers the FTC broad subpoena energy to request info from individuals, partnerships, and firms (aside from banks, financial savings and mortgage establishments). The FTC has used this energy to check the practices of particular industries utilizing info requests to chose corporations in that business. The coalition lists proposed outcomes of the investigation in its letter, together with:

  • Suggestions for federal and state enforcement actions in opposition to electrical utilities which have dedicated abuses;

  • Proposed legislative and regulatory reform to deal with and stop utility abuses that result in client and competitor harms;

  • Proposed reform to state motion immunity defenses in antitrust regulation; and

  • Suggestions that the FTC deal with governance and procedures for RTOs and ISOs.

Takeaways: An FTC 6(b) investigation may have broad impacts on the electrical utility business. The FTC has performed this sort of investigation within the sector—for instance, a 1935 investigation laid the groundwork for the passage of the Public Utility Holding Firm Act of 1935. Additional, along with imposing doubtlessly substantial burdens on the topics of the potential FTC investigation, such a wide-ranging investigation might result in FTC enforcement actions – the FTC now has a Democratic majority in place with the current affirmation of Commissioner Alvaro Bedoya – and even legislative or regulatory reform. 

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