Utility Commission Authorities and Reporting Responsibilities

U.S. Government Accountability Office

Authorities Over Mergers and Corporate Structures

1.	Which one of the following best describes your state laws or regulations relating to the formation of utility holding companies?
	*(Check one.)*
	1.		State law prohibits the formation of utility holding companies
	2.		Specific state law requires prior commission approval for the formation of utility holding companies
	3.		Existing regulations promulgated pursuant to general statutory authority requires prior commission approval for the formation of utility holding companies
	4.		Formation of utility holding companies does not require approval from the commission
	5.		Other (Please specify below)

	What describes your state laws or regulations?

2.	A merger is the combining of two or more previously unaffiliated corporations. An acquisition is the acquisition of one corporation by another, excluding ownership changes or control over specific assets, such as the purchase of power plants or other assets. Which of the following describes your commission's authority regarding mergers or acquisitions involving a state-regulated utility?
	*(Check all that apply.)*
	1.		Specific state law requires prior commission approval of a merger involving a state-regulated utility
	2.		Specific state law requires prior commission approval of an acquisition involving a state-regulated utility
	3.		Existing regulations promulgated pursuant to general statutory authority require prior commission approval of a merger involving a state-regulated utility
	4.		Existing regulations promulgated pursuant to general statutory authority require prior commission approval of an acquisition involving a state-regulated utility
	5.		The commission requires the utility to complete a rate case prior to a merger
	6.		The commission requires the utility to complete a rate case prior to an acquisition
	7.		State law prohibits the commission from intervening in a merger
	8.		Legislature has not directly provided the Commission with merger review authority
	9.		Other (please specify below)

	What describes your commission's authority?

3.	For a typical merger, (over the last five years, consider the mergers your office examined if applicable), how much staff time in full-time equivalents (FTEs) did you commit to examining the merger? Please consider FTEs on an annual basis, so that if three staff worked for four months on the merger that would equal one FTE. If you do not have direct merger authority consider any time spent monitoring other merger reviews such as FERC or DOJ.
	*(Check one.)*
	1.		None
	2.		1 to 2 FTEs
	3.		3 to 5 FTEs
	4.		5 to 10 FTEs
	5.		More than 10 FTEs
	6.		Unknown
	7.		Not applicable, no mergers examined

4.	Over the last 5 years, how many mergers or acquisitions involving a commission regulated utility have been formally brought before your Commission for your approval?
	*(Check one.)*
	1.		None (Click here to skip to question 6.)
	2.		One
	3.		Two
	4.		Three
	5.		More than three

5.	Of those mergers you reviewed over the last five years how many did the Commission...

	a....prohibit?
	b....approve without conditions?
	c.... approve subject to conditions?
	d.... decision pending?
	e.... merger withdrawn prior to Commission decision?

6.	How important are each of the following factors to your commission's reviews of proposed mergers and acquisitions?
	Check one for each row.

		Very Important	Somewhat Important	Moderately Important	Slightly Important	Not at all Important	No opinion	Does not describe Commission's practice when reviewing mergers
	a. Commission staff develop detailed analysis of merger including analysis of effect on competition, as appropriate, effect on rates/prices, effect on regulatory oversight, and other matters
	b. Commission retains outside consultants as necessary, to develop analysis of merger including analysis of effect on competition, as appropriate, effect on rates/prices, effect on regulatory oversight, and other matters
	c. Commission staff examines detailed filings (including detailed analyses of cost and rate impacts on customers, impacts on retail and wholesale markets, and impact on related regulatory matters) provided by companies
	d. Commission staff examines general filings (those without detailed analysis)
	e. Commission staff does an analysis or paper on the effects of a merger or acquisition
	f. Commission staff makes formal recommendation to commission
	g. Commission always holds hearings on proposed merger or acquisitions involving regulated companies
	h. During any hearings that may be held, commission staff testifies as to facts of application
	i. During any hearings that may be held, applicant testifies before commission
	j. During any hearings that may be held, parties opposed to merger or acquisition are provided a formal opportunity to testify
	k. Commission votes on application

7.	Please identify the importance of each of the following factors as the commission evaluates proposed mergers and acquisitions
	Check one for each row.

		Very Great Importance	Great Importance	Moderate Importance	Some Importance	Little or No Importance	No Opinion	Commission does not review mergers
	a. Resulting company size
	b. Impact on shareholders of state-regulated utility
	c. Impact on bondholders of state-regulated utility
	d. Impact on employees of state-regulated utility (e.g. potential for lost jobs)
	e. Whether resulting company will have headquarters located in another state
	f. Impact of merger or acquisition on financial complexity of the resulting company

		Very Great Importance	Great Importance	Moderate Importance	Some Importance	Little or No Importance	No Opinion	Commission does not review mergers
	g. Impact of combination on regulated rates (including any negotiated rate reductions, benefits-sharing, or other arrangements)
	h. Impact on retail competition (if relevant in your state)
	i. Impact on retail service quality
	j. Impact on number and types of retail services provided
	k. Impact on other state-regulated utilities
	l. Impact on wholesale market or wholesale competition
	m. Environmental impact
	n. Impact on ease or difficulty of regulation of the resulting company by your commission
	o. Size of non-rate financial concessions utility is willing to provide (e.g. enhanced renewables funding, low-income energy assistance programs, transmission construction, etc.)

Full Report: GAO-08-289

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