Submission Number: 00002
Received: 2/9/2012 2:17:28 PM
Commenter: John-Carl Vallejo
Organization: County of Mono
Agency: Federal Trade Commission
Initiative: Proposed Consent Agreement In the Matter of AmeriGas Propane, L.P., AmeriGas Propane, Inc., Energy Transfer Partners, L.P., and Energy Transfer Partners GP, L.P.; FTC File No. 121-0022
Attachments: No Attachments
As discussed further below, Mono County is concerned that FTC's proposed restrictions on the merger do not properly consider the remote nature of Mono County and the likely adverse impact to Mono County residents, businesses, and visitors that will occur when AmeriGas becomes the only propane supplier to the area by virtue of the merger.
Mono County was relatively recently informed of the pending merger between AmeriGas and the parent company of Turner Propane. This potential merger is of particular interest to Mono County and its communities due to the fact that AmeriGas and Turner Propane are the only two propane providers in the County's isolated, but very large, geographical area.
For some background, Mono County is approximately 3,131.80 square miles of diverse topography and geography, located in the Eastern Sierra, bordering Inyo County on its southern border, and bordering Nevada on its eastern border. There are approximately 14,000 permanent residents in Mono County, but the tourism industry attracts a relatively huge amount of annual visitors (greater than 1.5 million in 2008).
The geographically remote nature of Mono County limits the types of energy resources that County residents and businesses can import in a cost-effective manner. For the same reasons, the energy that it does import (aka propane and gasoline) generally cost significantly more than the national and state averages. The vast majority of the County relies on propane for its heating needs. For quite some time, the only two competitors in the regional propane market have been AmeriGas and Turner Propane.
The following facts flowing from Mono County-area residents, business owners, and safety personnel have previously been provided to the FTC:
(1) The experience of propane customers in Mono County and the Town of Mammoth Lakes has been that Turner Propane offers a significantly better level of customer service than does AmeriGas. Often, it is Turner Propane employees that will ultimately respond to safety concerns arising out of AmeriGas equipment / tanks / etc.
(2) In county areas where no competition exists for AmeriGas, AmeriGas has raised prices at will without justification.
(3) AmeriGas has repeatedly failed to update its regulator equipment while establishing new and increased rents for that equipment.
(4) AmeriGas has previously acted to thwart Turner Propane's entry into the Bridgeport area in the summer and fall of 2011.
(5) AmeriGas has refused to allow Turner Propane to utilize underground pipes in the Bridgeport area when customers have attempted to change their propane supplier from AmeriGas to Turner Propane.
(6) A third propane provider indicated that the cost of entry into the Mono County marketplace is cost prohibitive, and practically prohibitive, due to the lack of an adequate area to store propane not already controlled by AmeriGas.
In light of the above, permitting AmeriGas to become the sole propane supplier in Mono County will create an absolute concentration of market power in the Mono County geographical area. This, in turn, will likely significantly degrade the quality of service provided to Mono County residents and businesses, and will likely result in unchecked price increases for propane. Such a result will be seriously damaging to the Mono County economy, and an after-the-fact lawsuit will be an insufficient remedy. As such, Mono County requests that the FTC require AmeriGas to divest itself of the business and assets of Turner Propane that exist in the Mono County market.
Thank you for your consideration of these concerns.