Apprehension over the effect of the Exelon-PSEG merger continues, as the New Jersey Board of Public Utilities (“NJBPU”), along with several other regional interests, including New Jersey's Ratepayer Advocate and Pennsylvania's Office of the Consumer Advocate, asked FERC to rehear its July 1 order approving the merger and instead set the merger for hearing.
The NJBPU argues in its request that FERC violated Section 203 of the Federal Power Act (“FPA”) by failing to determine affirmatively that the merger is in the public interest in advance of authorizing the transaction. Instead, complained the NJBPU, FERC's order recognized that the merger's harm to competition may not be adequately mitigated by the Applicants' proposed mitigation plan. According to the NJBPU, FERC's reliance on the imposition of additional mitigation after the merger closes, if necessary, is in error. Additionally, FERC failed to address significant aspects of PJM's merger analysis as well as the affect of the merger in the natural gas market. The NJBPU also stated that, to the extent FERC is relying on its ability to revoke the Applicants' market-based rates and impose cost-of-service regulation as a means of addressing market power, this would harm consumers because cost-based rates may be higher than those that existed in pre-merger competitive markets.
Since the NJBPU is independently reviewing the merger, and therefore, may condition its approval on concessions different from those imposed by FERC, the NJBPU contends that administrative efficiency demands a single evidentiary hearing before FERC in which all merger issues can be resolved. [Exelon Corporation and Public Service Enterprise Corporation, Inc., 112 FERC ¶ 61,011 (2005)]