Blog Post 2: Most State Regulatory Commissions Have Recently Approved One or More Mergers

As shown in the map which follows, since 2010, 37 state regulatory commissions have reviewed 33 mergers.

 

Source:© 2017 Concentric Energy Advisors, Inc. Not to be reproduced or reused without authorization.

 

Of the 33 mergers reviewed by these state regulatory commissions, 31 have been approved and closed,[1] and two were terminated by the acquirer.[2] Two additional mergers are in the final stages of their state regulatory proceedings.  Concentric is an expert witness in two pending transactions:

·         NextEra Energy’s proposed acquisition of EFH, the bankrupt parent of Oncor Electric Delivery, concluded evidentiary hearings before the Texas Public Utility Commission.

·         Great Plains Energy’s proposed acquisition of its neighboring utility Westar Energy concluded its evidentiary hearings before the Kansas Corporation Commission; the Missouri Public Service Commission will conduct an evidentiary hearing in the next month.

 

Predominant Standard of Review

The most common standard of review used by regulators in the U.S. deliberating utility mergers is the “public interest” standard.  The method for establishing the public interest standard (e.g., by statute, rulemaking) and the factors that are considered in assessing the public interest standard vary by state.  In fact, the regulatory review of several recent transactions has been preceded by the regulator clarifying its merger standards and/or establishing specific questions to be addressed in the regulatory review.

 

Regardless of these differences, the fundamental intent of the “public interest” standard has several common elements:

·         Encompass the potential impact of the proposed M&A transaction on customers

·         Protection of the regulatory agency’s ability to exercise its oversight authority

·         Consideration of  “external” effects such as the impacts on employees, the local economy, and the environment

 

Please contact Lisa Quilici for more information:

T: 617-872-0248

E: lquilici@ceadvisors.com

 

[1]       Algonquin/Empire, Fortis/ITC, Duke/Piedmont, Dominion/Questar, Southern/AGL, Emera/TECo, Macquarie/Cleco, Exelon/PEPCo, Black Hills/SourceGas, Iberdrola/UIL, WEC/Integrys, Berkshire Hathaway/Altalink, TECO/NM Gas, Laclede/Alabama Gas, Fortis/UNS, Laclede/New England Gas, Algonquin/New England Gas, Berkshire Hathaway/NV Energy, Laclede/Missouri Gas, Fortis/CH Energy, Algonquin/Atmos, Algonquin/Granite State, Duke/Progress, Gaz Métro/CVPS, NU/NSTAR, Exelon/Constellation, AGL/NICOR, AES/DPL, FirstEnergy/Allegheny, UIL/Berkshire Gas, PPL/E.ON
[2]       NextEra Energy/HEI and Hunt Group/Oncor

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