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40 Harv. Envtl. L. Rev. F. 41 (2016)
Fostering Competition in the 21st Century Electricity Industry

handle is hein.journals/helf40 and id is 58 raw text is: FOSTERING COMPETITION IN THE 21st CENTURY ELECTRICITY INDUSTRY Michael Wara INTRODUCTION Today's electricity sector is shaped by two important trends. First, investor-owned electric utilities have been rapidly consolidating ever since repeal of the Public Utilities Holding Company Act (PUHCA) in 2005. Second, the pace of technological innovation has increased, especially at the grid edge. Numerous firms have emerged, most notably demand re- sponse aggregators, solar power providers, and energy storage providers that seek to sell energy services to customers, to wholesale electricity markets, or to both. These firms often compete with the utilities in ways not anticipated by the existing mechanisms that allow for and regulate competition in the electric- ity sector. Taking this competition question seriously means reexamining the application of the law of antitrust in electricity regulation. Elsewhere, I have argued for renewed oversight of ratemaking by antitrust regulators.1 Here, I argue for increased focus by the Department of Justice (DOJ) in exercising its antitrust merger oversight authority. I. CONSOLIDATION AND INNOVATION IN THE U.S. ELECTRICITY SECTOR The last twenty-five years have seen rapid consolidation in the investor- owned electric power sector. While the power sector as a whole is still populat- ed by a diverse set of public and private entities, most electricity demand in the United States is served by investor-owned utilities. These utilities were limited in horizontal scale for nearly seventy years by PUHCA, which was enacted in the aftermath of the Insull utility holding company's collapse during the Great Depression. PUHCA limited the degree to which utilities could combine to efficiently exploit economies of scale.2 Beginning in the 1980s, federal energy regulatory policies aimed at fostering competition encouraged consolidation in 'Associate Professor and Justin M. Roach, Jr. Faculty Scholar, Stanford Law School. 'See Michael Wara, Competition at the Grid Edge: Innovation and Antitrust Lawin the Electric ity Sector, 25 N.Y.U. ENVTL. LJ. (forthcoming 2016). 2 See Richard J. Pierce, Jr., Mergers in the Electric Power Industry, in COMPETITION POLICY AND MERGER ANALYSIS IN DEREGULATED AND NEWLY COMPETITIVE INDUSTRIES 7 (2005).

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