The “public interest” standard is the predominant standard of review used by regulators in the U.S. considering utility mergers. The standard provides regulators with a broad foundation upon which to conduct their review and how the standard is applied has evolved as the industry has consolidated. Regulators increasingly consider whether a proposed transaction will create specific benefits or new risks for customers. As we will explore in future articles, merger commitments made by the seller and buyer are key contributors to the public interest. While intervenors in some transactions have sought additional commitments, most Commissions have avoided imposing conditions on a merger which would disrupt the balance of customer, shareholder and other interest and cause a transaction to be aborted. The importance of understanding your Commission’s policies and precedents, and the interests of other stakeholders cannot be underestimated in a merger. Precedent in the industry provides prospective buyers and sellers with a “road map” for successful merger approvals.
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