Proposed NextEra-Dominion merger risks harm to customers and competition, OPC tells federal regulators
BALTIMORE – Federal regulators should reject NextEra and Dominion’s proposed creation of the self-described “world’s largest regulated electric utility business,” which could increase electric transmission costs and accelerate harmful market concentration, the Office of People’s Counsel said in a protest filed today with the Federal Energy Regulatory Commission (FERC).
“FERC has an obligation to protect the public interest when it reviews proposed mergers,” said Maryland People’s Counsel David S. Lapp. “The scale of this proposed transaction and its potential harm to consumers and long-term competition require the Commission to reject the proposal as not in the public interest.”
Maryland has seen widespread consolidation of its electric utilities since the early 2000s. FirstEnergy acquired Potomac Edison in 2010, and Illinois-based Exelon acquired Baltimore Gas and Electric in 2012 and Pepco Holdings—itself the result of a 2002 merger between Potomac Electric Power Company and Delmarva Power & Light—in 2016. OPC’s protest explains that if NextEra and Dominion are allowed to merge, regional competitors like Exelon, American Electric Power, and FirstEnergy all have increased justifications to seek a similar merger, with potential implications for Maryland utility customers.
Consolidation also hurts efforts to keep transmission costs under control. OPC’s protest explains that regional transmission competition between rivals like NextEra and Dominion promotes consumer welfare. The NextEra-Dominion acquisition would reduce the number of independent regional powerhouses that compete for high-voltage transmission projects that are bid out by PJM, the region’s independent transmission organization. Transmission rates in Maryland have been on the rise, according to a recent OPC report, and those increases could be exacerbated by the consolidation of a major regional competitor with a major incumbent utility in the region, OPC’s filing said.
OPC also argued to FERC that PJM is vulnerable to conglomerates undermining its independence.
“Independence is the bedrock principle of regional transmission governance,” Lapp said. “This principle is undermined when a company like the one NextEra and Dominion propose to create can leverage its size and option to exit organizations like PJM to influence policy decisions there.”
For more on OPC’s advocacy on federal matters, visit OPC’s website.
The Maryland Office of People’s Counsel is an independent state agency that represents Maryland’s residential consumers in electric, natural gas, telecommunications, private water and certain transportation matters before the Public Service Commission, federal regulatory agencies, and the courts.
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