Every energy reporter dreams of being immortalized in a filing at the Federal Energy Regulatory Commission. From a brief on the Constellation Energy/MidAmerican Energy merger submitted last week by the American Public Power Association:

The chain of events leading up to this proposed merger is more colorfully laid out in the media, e.g., the ongoing blog written by Jay Hancock, the business reporter for the Baltimore Sun.[1] One illustrative example, from September 17, 2008:

You leave the Web for 12 hours and look what happens. Who would have thought the financial world’s next holy guacamole moment would happen in Baltimore? Obviously a potential ratings downgrade has triggered a Constellation Energy liquidity crisis—or vice versa. Translation: Rating agencies, shareholders and lenders fear it may run short on cash to carry out day-to-day operations. But we have no idea what’s causing it yet. What’s clear is that Constellation’s reliance on borrowed money is putting it in dire straits. Much like many Wall Street firms that have run into problems, Constellation uses short-term loans to play the markets—in its case, mainly commodities such as wholesale electricity and natural gas. A huge portion of its profits—we don’t know exactly how huge—has depended on this play.[2]

The Commission, however, must put aside the exigent circumstances under which this corporate marriage was arranged, and dispassionately assess whether it is in the public interest, as FPA Section 203 requires. The Applicants have submitted their “Appendix A” competitive analysis (in the form of the Frame Affidavit). They further represent that MidAmerican is making “ring-fencing commitments for BGE as part of the Maryland state approval process for the transaction.” Application at 5. APPA obviously urges the Commission to review these analyses and representations carefully. But APPA also urges the Commission to “look beyond the change in HHI in its analysis of the effect on competition in both horizontal and vertical mergers.” FPA Section 203 Supplemental Policy Statement, 72 Fed. Reg. 42,277 at P 65 (August 2, 2007). The merged enterprise would be a public utility holding company of national scope (having affiliates on the East...
1 Available at: http://weblogs.baltimoresun.com/business/hancock/blog/2008/11/
2 Available at: http://weblogs.baltimoresun.com/business/hancock/blog/2008/09/ what_could_have_gone_wrong_at.html#more