Summer 2016

The Evolving Public Interest—Recent Decisions in Utility Merger Proceedings

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The Evolving Public Interest—Recent Decisions in Utility Merger Proceedings

In December 2008, the Washington Utilities and Transportation Commission (WUTC) approved the acquisition by a group of long-term infrastructure investors of Puget Energy, Inc. and its wholly owned utility subsidiary, Puget Sound Energy Inc.. In approving the transaction, the WUTC determined that the appropriate standard under the state statutory requirement that any approved transaction be "consistent with the public interest" was the so-called "no harm" standard. In its approval under the no harm standard, the WUTC established the paradigm for defining the public interest in the context of utility merger applications that included a series of commitments required of the merging parties. These related to a variety of topics, among the most important of which dealt with capital requirements, financial integrity, and regulatory and ring-fencing commitments. The authors examine how the precedent established in the Puget Holdings decision has been adapted by certain other jurisdictions in contested merger approval proceedings.

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