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DOJ will monitor a second planned Maine plant sale after its Vistra-Cogentrix power-merger concern

2 min read

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The Justice Department says it remained concerned about competition in New England power generation after Vistra decided to sell one facility as part of its Cogentrix acquisition. The companies then decided to sell Cogentrix's Rumford, Maine, gas plant too. DOJ says the second sale would reduce their ability and incentive to withhold electricity and raise prices, and it will monitor that sale; the announcement does not say it is complete.

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The Justice Department says it will monitor a planned sale of a Maine power plant after investigating Vistra's acquisition of Cogentrix. DOJ says the companies' decision to sell the Rumford plant would reduce the combined firm's ability and incentive to withhold electricity and raise prices in New England.

Why DOJ kept investigating

Vistra announced its agreement to acquire Cogentrix in January. The companies compete in wholesale electricity generation and capacity auctions. Their portfolios overlap in three regional grid markets, including ISO New England, according to DOJ's October 30 statement.

During a Federal Energy Regulatory Commission review, ISO New England's internal market monitor raised concerns that the acquisition could reduce competition and enable the exercise of market power. Vistra decided to sell its Casco Bay Energy facility while that review was pending. FERC considered the decision and approved the transaction without conditions, DOJ says.

DOJ continued its own investigation after that approval. The department says it examined whether the combined firm could withhold electricity from ISO New England despite the Casco Bay sale decision. It remained concerned that the combined portfolio might substantially lessen competition even with that facility's sale.

The second sale decision

Vistra and Cogentrix then decided to sell Cogentrix's gas-fired combined-cycle plant in Rumford, Maine. DOJ says that would reduce the combined firm's ability and incentive to withhold power and raise prices in the regional market. It says it will continue to monitor the Rumford sale. Its statement does not say the sale has closed.

An associate attorney general said DOJ anticipates the divestitures will save New England consumers tens of millions of dollars annually in electricity bills. That is the department's forecast, not a measured reduction. The statement supplies no household bill estimate and says the investigation's outcome is limited to its facts. During the interim, DOJ says, the companies must continue to follow applicable FERC regulations.

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