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FTC Approves Final Settlement Orders Regarding Boulder Valley IPA and M. Catherine Higgins

Following a public comment period, the Federal Trade Commission has approved final settlement orders in the matters of Boulder Valley Individual Practice Association (BVIPA) and its executive director, M. Catherine Higgins, and sent letters to members of the public who submitted comments on the BVIPA order. The separate final orders settle charges that the association and Higgins, acting both in her official capacity and independently, orchestrated and carried out agreements among BVIPA’s members to refuse, and threaten to refuse, to deal with insurance providers, unless they raised the fees paid to the groups’ doctors.

The FTC vote approving the BVIPA final order was 4-0 and the vote approving the Higgins final order was 3-1, with Commissioner J. Thomas Rosch voting no. (FTC File No. 051-0252; the staff contact is Gary H. Schorr, Bureau of Competition, 202-326-3063. See press releases dated December 24, 2008, at and February 5, 2010, at

Commission Submits Comments on Measuring the Performance of Electric Regional Transmission Organizations and on FERC’s Method of Assessing Partial Acquisitions

The Federal Trade Commission has submitted two sets of comments to the Federal Energy Regulatory Commission (FERC): one addressing the best ways for FERC to measure the performance of regional transmission organizations (RTOs) and independent system operators (ISOs), and the other on the method FERC uses to assess how partial acquisitions of electric power providers affect competition. RTOs and ISOs are organizations responsible for interstate electricity transmission over large geographic areas.

The FTC’s first comment was submitted in a FERC proceeding designed to determine the best ways to measure the performance of RTOs and ISOs. FERC recently issued a notice requesting comments and listing several performance measures it had developed. Although the FTC agrees that developing and tracking the performance of RTOs and ISOs is a worthy goal, the comment points out that the criteria FERC has proposed do not measure all of the “minimum characteristics and functions” of RTOs and ISOs that FERC previously laid out. The comment discusses the detrimental consequences that could arise if performance measures do not appropriately correspond to minimum characteristics and functions.

The comment recommends that FERC select performance measures that assess RTOs’ and ISOs’ adherence to the minimum characteristics and their performance of the required functions. In addition, it urges FERC to consider assessing the efficiency of RTO and ISO operations and their responsiveness to the grid users and the retail electricity customers they serve. An accurate assessment of generator market power, the comment concludes, could be a useful performance measure for FERC’s policy choices.

The FTC’s second comment stems from a proposal that FERC modify the way it determines whether partial acquisitions may harm competition. The Electric Power Supply Association (EPSA) had asked FERC to clarify its policy on how large a stake an investor may buy in an electricity provider before FERC deems the investor to be in “control” – and thus not eligible for blanket approval of proposed transactions, and not exempt from competition review. Specifically, EPSA asked FERC to determine that transactions would remain eligible for this kind of streamlined treatment so long as the investor: 1) owns less than 20 percent of the acquired company’s voting securities; and 2) certifies, through a filing with the Securities and Exchange Commission, that the investment is not for the purpose of controlling the company whose shares are acquired.

FERC responded to EPSA’s request by issuing a notice of proposed rulemaking that would extend its blanket approvals and competitive review exemptions to acquirers of 10 percent or more – but less than 20 percent – of a public utility’s securities, so long as the acquirer affirms that its purpose in holding the securities is not to change or influence the control of the issuing utility.

In addition to the specific affirmations that FERC would require in this process, the FTC’s new comment recommends that FERC require two further certifications: 1) that the acquirer does not compete in the same electricity markets as the issuer of the acquired voting securities; and 2) that the acquirer does not own or control certain inputs to the production of electric energy in the same markets as the issuer. These certifications, the FTC states, would help ensure that a partial transaction does not create adverse incentives to harm competition, and they would reinforce other provisions FERC has already proposed.

The vote authorizing the filing of each comment was 4-0. (FTC File Nos. V100008 and V090008; the staff contact is John H. Seesel, Associate General Counsel for Energy, Office of General Counsel, 202-326-2702.)

Copies of the documents mentioned in this release are available from the FTC’s Web site at and from the FTC’s Consumer Response Center, Room 130, 600 Pennsylvania Avenue, N.W., Washington, DC 20580. Call toll-free: 1-877-FTC-HELP.

(FYI 14.2010.wpd)

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