Electricity Merger Analysis: Market Screens, Market Definition, and Other Lemmings

Much discussion and effort have been devoted to the use of market power screens to detect market power that might arise from existing generation asset portfolios or utility acquisition of new generation assets. The quest is to find the “Holy Grail”: a market power detection mechanism that minimizes the costs to all parties involved while finding the majority of market power exercises. This article contends that market power screens should be utilized with caution in policy and litigation applications because while they meet the criteria of minimizing enforcement costs, they are often unable to detect many types of market power exercises that an electric utility might undertake. The article begins with a discussion of the polestar for all screens—the Department of Justice/Federal Trade Commission Horizontal Merger Guidelines—and its limitations. Next, the article examines the accidentally correct, absolutely incorrect, and other outcomes that arise from the application of screens using FERC’s merger policy statement, “contestable load” analysis, and other examples. The Article concludes by noting that many types of market power exercises are undetectable with market power screens, and that better approaches would increase the probability of detection, given the low level of penalty current imposed upon those that wield market power.     

刍议我国电力市场结构的分析方法

本文讨论了研究电力市场的若干手段和方法,引入了动态市场集中度的概念,提出了电力产品也能够差别化的观点,并初步论述了我国电力市场结构的大体框架。     

Mergers that harm competitors

Standard models of oligopolistic interdependence predict that firms remaining outside of a horizontal merger will benefit from it. Why, then, do nonparticipating firms feel threatened by mergers? This paper shows that under reasonable conditions a non-participating firm is harmed by a merger. The analysis is based on a spatial equilibrium with suppliers and demanders located at fixed points. Mergers harm non-participating firms as a result of the decrease in the level of marginal costs of the merged firm attributable to decreased output in markets where competition is eliminated. This lowered marginal cost makes the merged firm a more formidable competitor in markets in which outsiders participate. This effect is in almost all cases sufficient to make outsiders worse off after a merger. Simulations on a sample of spatial equilibria show that the harm to outsiders is a reliable index of the harm that the merger causes to social welfare.     

Mergers and coordinated effects

A merger is said to have coordinated effects if it results in more collusive outcomes. I review the theory of collusion, and the role played by communication in coordination. Mergers can affect the enforcement and participation constraints for a collusive agreement, and the selection from the equilibrium set of outcomes. I describe some recent empirical studies of the effects of mergers on collusion, and the underlying measurement issues associated with identifying the degree of coordination. I also discuss some recent cases in which coordinated effects were a concern, including both merger reviews and ex post investigations.     

用电检查面临的重点问题及反窃电措施

用电检查是供电营销管理工作的重要内容,而查窃电又是用电检查的重点和难点。基于多年用电检查工作经验,分析了当前供电业务中违章用电和窃电形势,论述了供电企业用电检查和反窃电工作的现状及面临的问题,结合供电企业工作实际,提出了查处窃电的相关对策。     

Quantitative Methods for Evaluating the Unilateral Effects of Mergers

We describe the quantitative modeling techniques that are used in horizontal merger review for the evaluation of unilateral effects, and discuss how the 2010 Horizontal Merger Guidelines helped legitimize these methods and motivate scholarly research. We cover markets that feature differentiated products pricing, auctions and negotiations, and homogeneous products, in turn. We also develop connections between quantitative modeling and market concentration screens that are based on the Herfindahl-Hirschman Index (HHI).

     

Economic Analyses of Mergers at the FTC: The Cruise Ships Mergers Investigation

This paper provides an overview of how economists atthe Federal Trade Commission assess the potentialcompetitive effects of mergers, with a focus on thetypes of quantitative analyses frequently employed.The paper first outlines the general approach employedat the Federal Trade Commission to review mergers.The paper then describes analyses done in theinvestigation of proposed mergers in the cruiseline industry as a specific example. Of particularinterest in this example are the analyses used toassess the potential for coordinated interaction asa result of the merger.     

A New Retrospective on Mergers

This paper is based on my keynote address given at the 2006 International Industrial Organization Conference in Boston, April 8, 2006. I survey long-run trends in mergers, review the debate over the economic success of mergers generally, and examine the changing treatment that business schools have accorded mergers over the past five decades. A final section is a time series analysis of links at the U.S. macroeconomic level between changes in merger activity and labor productivity growth.     

Applying Capital Budgeting Techniques to Mergers

The most important capital budgeting decision a firm may make is a merger or acquisition. Yet the literature in finance provides little coverage of the topic. Mergers are frequently analyzed on the basis of the exchange rate determination and the impact on earnings per share. Though this topic is covered in the latter part of the article, the main emphasis is on the capital budgeting aspects of a merger analysis. Thus, the key metric to be considered is free cash flow and not earnings per share. Also, the article considers the importance of residual value or the value of the target firm after the traditional 5 or 10 years of cash flow or earnings analysis. By ignoring residual value, as over 50% of Fortune 500 companies do, it is implicitly being assigned a value of zero. This neglect may substantially understate the true value of the target. The article also points out the fallacy of considering relative price/earnings (P/E) ratios on postmerger EPS.     

规范电价管理 促进电价改革——访国家计委价格司副司长韩慧芳

记者：实现城乡用电同价是全社会非常关注的问题，请介绍一下“两改一同价”的进展情况。　　韩慧芳：“两改一同价”工作自1998年下半年启动以来，总体上进展比较顺利。据向有关方面了解，在农网改造方面，计划投入的1 890亿元农网改造投资基本上都已经分拨下去，到去年底已完成投资1 315亿元；在第一批竣工县全部通过竣工验收后，又陆续有一些县完成了农网改造工作。在农电体制改革方面，截止2000年底，国家经贸委已经批复了除北京外其它省、区、市的农电改革实施方案；全国2 450个县中，已有98个县改革为省电力公司的子公司，392个县改…     

电价政策要为宏观调控服务——访国家发改委价格司赵小平司长

记者:2004年是电力行业不平凡的一年,也是近几年来电价改革工作力度最大的一年。请您介绍一下,结合落实宏观调控政策,缓解缺电局面,2004年在推进电价改革方面做了哪些工作?赵小平:按照国务院办公厅2003年7月颁布的《电价改革方案》(国办发[2003]62号)确定的改革原则和精神,我们     

为完善电力市场提供法律保障——对修改《电力法》的建议

电力市场 建立电力市场,实行市场竞争,有利于打破自然垄断,提高电力工业生产效率和服务质量,降低电力生产和供应成本,实现资源优化配置,为国民经济的可持续发展提供可靠、高效、优质的清洁能源.借鉴各国电力工业改革经验,结合我国电力工业改革的实际,当前迫切需要从法律上对电力市场进行规范,逐步建立起有中国特色的电力市场机制.     

2030年世界能源与电力发展展望

在系统分析世界能源与电力发展最新动态的基础上,对2030年世界及主要国家的能源与电力发展趋势以及能源与电力投资增长的趋势进行了分析预测。该分析预测结果可为研究和制定我国的能源及电力发展战略提供参考。     

Mergers: Significance for structure,performance and public policy session comment

Chief, Center for Economic Studies, Bureau of the Census.     

我国煤炭企业跨国并购风险防范对策

依据分段识别法将我国煤炭企业跨国并购中的风险分为并购准备阶段的风险、并购实施阶段的风险、并购整合阶段的风险,并提出防范这些风险的具体对策。     

Endogenous Mergers of Complements with Mixed Bundling

This paper studies endogenous mergers of complements with mixed bundling, by allowing both for joint and separate consumption. After merger, partner firms decrease the price of the bundled system. In addition, when markets for individual components are sufficiently important, partner firms find it strategically advantageous to raise the prices of stand-alone products, thus making substitute ‘mix-and-match’ composite products less attractive to consumers. Even though these effects favor the profitability of mergers, merging is not always an equilibrium outcome. The reason is that outsiders respond by cutting their prices to retain their market share, and mergers can be unprofitable when competition is intense. From a welfare analysis, we observe that the number of mergers that are observed in equilibrium may be either excessive (when markets for individual components are important) or suboptimal (when markets for individual components are less important).     

瞩目“中国电力论坛”（上）——调整电力结构 促进电力工业健康发展

由中电联主办的“中国电力论坛”于8月10日-11日在北京隆重举行。为使更多的电力企业经营者和管理者了解本次论坛，本刊《特别报道》栏目将分两期刊发有关领导、专家、企业家在论坛上的演讲，以飨读者。     

我国电力市场发展模式探讨

本文就我国电力市场的发展模式进行了探讨,并构造了三个不同阶段的模式:发电竞争模式、输电网开放模式、零售竞争模式,给出了三种模式的具体框图和主要特点及其过渡方法。