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Under the Regulatory Lens, an Overview of Merger Review Standards Utilized by State Commissions in the utility space

Regulatory Research Associates provides a jurisdictional overview of the relevant regulatory framework utilized by commissions in the 50 U.S. states and the District of Columbia when reviewing proposed mergers and acquisitions involving electric and gas utilities.

Mergers and acquisitions in the utility sector continue to receive a great deal of attention. Most mergers require the approval of one or more state regulatory commissions and federal authorities.

State commission reviews of utility mergers and acquisitions are sometimes extensive, and typically present the most obstacles and uncertainty. In some cases, proposed transactions were abandoned because of the lengthy review processes and/or restrictive regulatory requirements ultimately adopted by the state utility commissions.

For the most part, commissions are concerned about the "public interest" implications of a proposed merger or acquisition; however, definitions of public interest vary from state to state.

Conditions attached to merger approvals have included rate concessions; ring-fencing measures; customer protections, such as service quality guarantees, anti-competitive conduct-prohibitions and affiliate relationships restrictions; and, community considerations, such as job preservation and charitable contributions, continued stakeholder access to information, and maintenance of a corporate presence in the state.

Merger Approval Authority

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