Announced Action(s) for July 14, 2000

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Application for approval of proposed divestiture:

The FTC has received an application for divestiture from the following: Dominion Resources, Inc. and Consolidated Natural Gas Company (CNG). Pursuant to the terms of the Commission's order announced on November 5, 1999, regarding the proposed merger of these companies, Dominion Resources, Inc. has requested approval to divest CNG's subsidiary Virginia Natural Gas Company, Inc. (VNG) to AGL Resources Inc. (AGL).

The Commission is seeking public comments on the application for 30 days, until August 14, 2000. Comments should be sent to the Office of the Secretary, 600 Pennsylvania Ave., N.W., Washington, D.C. 20580. (Civil Action No. C-3901; staff contact is Roberta Baruch, Bureau of Competition, 202-326-2861; see press release dated November 5, 1999.)

Publication of Federal Register notices:

The Commission has approved publication of a Federal Register notice announcing its intention to consider proposals for demonstration projects to implement the FTC's proposed procedures for compliance with the Franchise Rule via the Internet. On October 22, 1999, the Commission published a Notice of Proposed Rulemaking on the Franchise Rule, which included proposed instructions for compliance via electronic media. As detailed in the Federal Register notice, which will be published shortly, the Commission believes the public interest will be served by affording qualified interested parties the opportunity to implement the proposed Internet instructions. Parties interested in conducting a demonstration project must seek Commission approval, be able to demonstrate compliance with the proposed Internet instructions, and report to Commission staff on the results of their project. All such demonstration projects will be on a trial basis, and the Commission has the right to terminate its approvals for any reason.

The vote to publish the Federal Register notice was 5-0. (FTC File No. R511003; staff contact is Steven Toporoff, Bureau of Consumer Protection, 202-326-3135.)

The Commission has approved publication of a Federal Register notice announcing an extension of the time within which it will accept written presentations relating to the FTC's recent Workshop on B2B Electronic Marketplaces. Such presentations now may be submitted through July 21, 2000. The Federal Register notice, which will be published shortly and is posted on the FTC's Web site, includes detailed information about how the presentations may be submitted to the Commission.

The vote to publish the Federal Register notice was 5-0. (FTC File No. P859900; staff contact is Susan S. DeSanti, Bureau of Competition, 202-326-2167.)

Release of Commission report:

The FTC has approved the release of the following: Sunshine Act Report for 1999. The government's Sunshine Act (named because it is designed to shed light on Federal agency operations) requires each affected agency to report annually to Congress about its compliance with the Act. Specifically, the report must contain: 1) the total number of agency meetings that were open to the public over the past year; 2) the total number of meetings closed to the public; 3) the reasons for closing such meetings; 4) a description of any litigation brought against the agency under the Act, including any costs assessed against the agency in such litigation; and 5) responses to additional questions detailed in a 1985 letter from two members of the Senate Subcommittee on Intergovernmental Relations.

The Commission vote to release the report to Congress was 5-0. It has been transmitted to the President of the Senate, Speaker of the House and relevant Senate and House Subcommittee Chairmen, and will also be made part of the public record. Copies will be available soon from the FTC's Web site or by calling the Consumer Response Center toll-free at 1-877-382-4357. (FTC File No. P822110; staff contact is Consuella R. Goosby, Office of the General Counsel, 202-326-2486.)

Filing of FTC staff comments:

Staff of the FTC's Bureau of Economics and Policy Planning Office have filed a comment with the Arkansas Public Service Commission (APSC) regarding APSC's proposed Staff Standard Service Package (SSP) Guidelines. The SSP Guidelines are intended to facilitate the timely development of the SSP for each existing electric utility operating in Arkansas so consumers will have uninterrupted service during the transition to retail competition. The FTC has a longstanding interest in regulation and competition in energy markets, including proposals to reform regulation of the electric power and natural gas industries.

The Arkansas Electric Consumer Choice Act of 1999 (Act 1556) requires that each incumbent electric utility offer an SSP to its customers until each has elected an alternative energy service provider, or if the customer has not been able to secure an alternative energy service provider. The SSP contains a minimum package of energy and electric power service. Prices for the SSP are frozen at the utility's rates in effect prior to the start of retail competition for a set period of years (i.e., the "freeze period"). If the APSC determines at the end of the freeze period that the electric utility has market power over retail sales of electric power, Act 1556 requires the APSC to determine a fair and equitable method to mitigate such market power so the electric utility can continue to offer an SSP without harming customers.

According to the FTC staff comment, the SSP Guidelines "provide a reasonable foundation to ensure that consumers obtain the benefits of retail competition -- lower prices, more innovation, wider service choices, and improved reliability." The staff comment suggested certain steps the APSC may wish to take to ensure that the transition to competition does not inadvertently preserve or enhance the market power of incumbent utilities and their affiliates. Specifically, the APSC may wish to expand the list of methods it will accept in assessing whether SSP pricing is consistent with pricing in markets subject to effective competition.

"If the APSC determines that an existing electric utility has market power in the provision of retail electric power once the freeze period ends," FTC staff said, "it may wish to examine a wide range of solutions to remedy this market power, including the divestiture of generation assets, the contracting-out of generation to supply SSP customers or the assignment of customers who have not chosen an alternative supplier to a supplier willing to offer the SSP at a competitive rate."

Finally, the staff comment suggested that the APSC may wish to undertake periodic sunset reviews of SSP arrangements after the conclusion of the freeze period in those areas where the utility and its affiliates do not have market power.

The Commission vote to approve the staff comment was 5-0.

Copies of the documents mentioned in this release are available from the FTC's Web site at http://www.ftc.gov and also from the FTC's Consumer Response Center, Room 130, 600 Pennsylvania Avenue, N.W., Washington, D.C. 20580; toll free: 877-FTC-HELP (877-382-4357); TDD for the hearing impaired 1-866-653-4261. To find out the latest news as it is announced, call the FTC NewsPhone recording at 202-326-2710.

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