[Federal Register Volume 63, Number 117 (Thursday, June 18, 1998)]
[Notices]
[Pages 33396-33408]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-16218]


-----------------------------------------------------------------------

DEPARTMENT OF JUSTICE

Antitrust Division


Proposed Final Judgment and Competitive Impact Statement; United 
States v. Enova Corporation

    Notice is hereby given pursuant to the Antitrust Procedures and 
Penalties Act, 15 U.S.C. Sec. 16(b)-(h), that a proposed Final 
Judgment, Stipulation, and Competitive Impact Statement have been filed 
with the United States District Court for the District of Columbia in 
United States v. Enova Corporation, Civil No. 98-CV-583 (TFH). The 
proposed Final Judgment is subject to approval by the Court after the 
expiration of the statutory 60-day public comment period and compliance 
with the Antitrust Procedures and Penalties Act, 15 U.S.C. Sec. 16(b)-
(h).
    On March 9, 1998, the United States filed a Complaint seeking to 
enjoin a transaction in which Pacific Enterprises (``Pacific'') would 
merge with Enova Corporation (``Enova''). Pacific is a California gas 
utility company and Enova is a California electric utility company. 
Enova sells electricity from plants that use coal, gas, nuclear power, 
and hydropower. Pacific is virtually the sole provider of natural gas 
and transportation storage services to plants in southern California. 
The proposed merger would have created a company with both the 
incentive and the ability to lessen competition in the market for 
electricity in California. The Complaint alleged that the proposed 
merger would substantially lessen competition in the market for 
electricity in California during high demand periods in violation of 
Section 7 of the Clayton Act, 15 U.S.C. Sec. 18.
    The proposed Final Judgment, filed contemporaneously with the 
Complaint, (1) orders Enova to sell certain of its generating assets to 
a purchaser or purchasers acceptable to the United States; and (2) 
limits Enova's ability to acquire similar assets. The Stipulation also 
imposes a hold separate agreement that, in essence, requires the 
defendant to ensure that, until the divestiture mandated by the Final 
Judgment has been accomplished, Enova's generators subject to the 
divestiture will be held separate and apart from, and operated 
independently of, any of its other Enova assets and businesses. A 
competitive Impact Statement filed by the United States describes the 
Complaint, the proposed Final Judgment, and remedies available to 
private litigants.
    Public comment is invited within the statutory 60-days comment 
period. Such comments, and responses thereto, will be published in the 
Federal Register and filed with the Court. Written comments should be 
directed to Roger W. Fones, Chief, Transportation, Energy, and 
Agriculture Section, Antitrust Division, 325 Seventh Street, NW., Suite 
500, Washington, DC 20530 (telephone (202) 307-6351).
    Copies of the Complaint, Stipulation, proposed Final Judgment, and 
Competitive Impact Statement are available for inspection in Room 215 
of the U.S. Department of Justice, Antitrust

[[Page 33397]]

Division, 325 Seventh Street, NW., Washington, DC 20530 (telephone: 
(202) 514-2481) and at the office of the Clerk of the United States 
District Court for the District of Columbia, 333 Constitution Avenue., 
NW., Washington, DC 20001. Copies of any of the materials may be 
obtained upon request and payment of a copying fee.
Constance K. Robinson,
Director of Operations & Merger Enforcement, Antitrust Division.

United States District Court, District of Columbia

    United States of America, Plaintiff, v. Enova Corporation, 
Defendant. Civil Action No. 1:98CV00583. Filed: March 9, 1998. 
Judge: Thomas Hogan.

Stipulation and Order

    It is stipulated by and between the undersigned parties, through 
their respective attorneys, that:
    1. The Court has jurisdiction over the subject matter of this 
action and over each of the parties hereto, and venue of this action is 
proper in the District of Columbia.
    2. The parties consent that a Final Judgment in the form hereto 
attached may be filed and entered by the Court, upon the motion of any 
party or upon the Court's own motion, at any time after compliance with 
the requirements of the Antitrust Procedures and Penalties Act, 15 
U.S.C. Sec. 16, and without further notice to any party or other 
proceedings, provided that Plaintiff United States has not withdrawn 
its consent, which it may do at any time before the entry of the 
proposed Final Judgment by serving notice thereof on Defendant and by 
filing that notice with the Court.
    3. Defendant shall abide by and comply with the provisions of the 
proposed Final Judgment pending entry of the Final Judgment, or until 
expiration of time for all appeals of any court ruling declining entry 
of the proposed Final Judgment, and shall, from the date of signing of 
this Stipulation, comply with all terms and provisions of the proposed 
Final Judgment as though the same were in full force and effect as an 
order of the Court.
    4. This Stipulation shall apply with equal force and effect to any 
amended proposed Final Judgment agreed upon in writing by the parties 
and submitted to the Court.
    5. In the event Plaintiff United States withdraws its consent, as 
provided in Paragraph 2, above, or if the proposed Final Judgment is 
not entered pursuant to this Stipulation, the time has expired for all 
appeals of any Court ruling declining entry to the Final Judgment, and 
the Court has not otherwise ordered continued compliance with the terms 
and provisions of the proposed Final Judgment, then the parties are 
released from all further obligations under this Stipulation, and the 
making of this Stipulation shall be without prejudice to any party in 
this or any other proceeding.
    6. Defendant represents that the divestiture ordered in the 
proposed Final Judgment can and will be made, and that they will later 
raise no claims of hardship or difficulty as grounds for asking the 
Court to modify any of the divestiture provisions contained therein.

        Respectfully submitted.

For Plaintiff

United States of America

Jade Alice Eaton,
DC Bar # 939629.
Andrew K. Rosa,
HI Bar # 6366, Attorneys, Antitrust Division, U.S. Department of 
Justice, 325 Seventh St., NW., Washington, DC 20004, (202) 307-6316, 
(202) 307-0886.

For Defendant

Enova Corporation

Steven C. Sunshine,
DC Bar # 450078, Shearman & Sterling, 801 Pennsylvania Avenue, NW., 
Washington, DC 20004, (202) 508-8022.

    Dated: March 9, 1998.

Order

    It is so ordered, this ________ day of ____________________, 1998.
----------------------------------------------------------------------
United States District Court Judge

Final Judgment

    Whereas Plaintiff United States of America (hereinafter ``United 
States''), having filed its Complaint herein on March 9, 1998, and 
Plaintiff and Defendant, by their respective attorneys, having 
consented to the entry of this Final Judgment without trail or 
adjudication of any issue of fact or law herein, and without this Final 
Judgment constituting any evidence against or an admission by any party 
with respect to any issue of law or fact herein;
    And whereas Defendant has agreed to be bound by the provisions of 
this Final Judgment pending its approval by the Court;
    And whereas the essence of this Final Judgment is divestiture of 
assets to ensure that competition, as alleged in the Complaint, is not 
substantially lessened;
    And whereas Plaintiff requires Defendant to make certain 
divestitures for the purpose of remedying the loss of competition 
alleged in the Complaint;
    And whereas Defendant has represented to Plaintiff that as to the 
divestiture ordered herein Defendant will later raise no claims of 
hardship or difficulty as grounds for asking the Court to modify any of 
the divestiture provisions contained below;
    Now, therefore, before the taking of any testimony, and without 
trail or adjudication or admission of any issue of fact or law herein, 
and upon consent of the parties hereto, it is hereby Ordered, Adjudged, 
and Decreed as follows:

I. Jurisdiction

    This Court has jurisdiction over each of the parties hereto and the 
subject matter of this action. The Complaint states a claim upon which 
relief may be granted against Defendant under Section 7 of the Clayton 
Act, as amended. 15 U.S.C.A. Sec. 18 (West 1997).

II. Definitions

    As used in this Final Judgment:
    A. ``Acquire'' means obtaining any interest in any electricity 
generating facilities or capacity, including, but not limited to, all 
real property, deeded development rights to real property, capital 
equipment, buildings, fixtures, or contracts related to the generation 
facility, and including all generations, tolling, reverse tolling, and 
other contractual rights.
    B. ``California Generation Facilities'' means (1) electricity 
generation facilities in California in existence in January 1, 1998, 
excluding such facilities that are rebuilt, repowered, of activated out 
of dormancy after January 1, 1998, as long as such rebuild, repower, or 
activation out of dormancy project, if done by Defendant, begins with 
one year of purchase; and (2) any contract for operation and sale of 
output from generating assets of the Los Angeles Department of Water 
and Power (``LADWP'').
    C. ``California Public Power Generation Management Services 
Contract'' means a bona fide contract for managing for operation and 
sale of output from California Generation Facilities owned by a 
municipality, an irrigation district, other California state authority, 
or their agents on January 1, 1998; provided, however, that a contract 
for managing the operation and sale of output from generation assets of 
LADWP shall not be deemed a California Public Power Generation 
Management Services Contract.
    D. ``Common Facilities'' means those facilities associated with the 
generation assets to be divested that are located on

[[Page 33398]]

or near such assets, and that are necessary to the operation of non-
generating aspects of Enova's electric business, including, but not 
limited to, the operation of Enova's distribution, transmission, and 
communications systems.
    E. ``Control'' means to have the ability to set the level of output 
of an electricity generation facility.
    F. ``Divestiture Assets'' means the Encina and South Bay 
electricity generation facilities owned by Enova at Carlsbad and Chula 
Vista, California, including, but not limited to, all real property 
rights necessary to the operation of the facilities; buildings, 
generation equipment, inventory, fixed assets and fixtures, materials, 
supplies, on-site warehouses or storage facilities, and other tangible 
property to improvements used in the operation of the facilities; 
licenses, permits (including but not limited to environmental permits 
and all permits from federal or state agencies), and authorizations 
issued by any governmental organization relating to the facilities, and 
all work in progress on permits or studies undertaken in order to 
obtain permits; plans for design or redesign of these electricity 
generating assets; contracts (including but not limited to customer 
contracts), agreements, leases, commitments, and understandings 
pertaining to the facilities and their operations; customer lists, and 
marketing or consumer surveys relating to these electricity generating 
assets; contracts for firm capacity and energy of longer than three 
months relating to these assets; records maintained by Enova necessary 
to operation of these assets; and all other interests, assets or 
improvements customarily used in the generation of electricity at these 
facilities.
    G. The terms ``Enova'' and ``Defendant'' mean Enova Corporation, a 
California corporation headquartered in San Diego, California, and 
includes its successors and assigns, and its parents, subsidiaries, 
directors, officers, managers, agents, and employees acting for or on 
behalf of any of them.
    H. The terms ``Independent System Operators'' or ``ISO'' means an 
entity that operates the intrastate gas transmission pipelines and 
related facilities of Pacific Enterprises. ``Operates'' includes full 
operational and pricing control over all such facilities and total 
authority to determine whether and how much capacity is available in 
the intrastate pipeline, whether curtailment of transmission service is 
require on any part of that system, whose service is curtailed, and the 
prices to be charged.
    I. ``Pacific'' means Pacific Enterprises, a California corporation 
headquartered in Los Angeles, California, and includes its successors 
and assign, and its parents, subsidiaries, directors, officers, 
managers, agents, and employee acting for or on behalf of any of them.
    J. ``Portland General Electric Contract'' means the contracts, 
dated November 15, 1985, for 75 MW of firm capacity and associated 
transmission.
    K. The terms ``Auction Procedures'' and ``California Auction 
Procedures'' mean the auction procedures set forth in a decision 
addressing Enova's application under section 851 of the California 
Public Utilities Code to divest the Divestiture Assets.
    L. The term ``Southern California'' means the counties in 
California currently served by Pacific's gas pipelines.

III. Applicability

    A. The provisions of this Final Judgment apply to Defendant, its 
successors and assigns, parents, subsidiaries, directors, officers, 
managers, agents, and employees, and all other persons in active 
concert or participation with any of them who shall have received 
actual notice of this Final Judgment by personal service or otherwise.
    B. Enova shall require, as a condition of the sale or other 
disposition of all or substantially all of its assets, or of a lesser 
business unit that includes Enova's business of intrastate transmission 
and retail distribution and sale of natural gas, that the transferee 
agree to be bound by the provisions of this Final Judgment.

IV. Divestiture

    A. Defendant is hereby ordered and directed, in accordance with the 
terms of this Final Judgment, and specifically in accordance with the 
schedule in this section, to divest the Divestiture Assets to a 
purchaser or purchasers acceptable to the United States, in its sole 
discretion. Purchasers whose bids are accepted by the United States 
under Section IV(D)(3) will be deemed acceptable.
    B. Except as provided in Section VI, these divestitures shall occur 
through the Auction Procedures and shall be subject to necessary 
approvals by the California Public Utilities Commission (``CPUC'') and 
other governmental authorities.
    C. Defendant shall use its best efforts to accomplish the 
divestiture as expeditiously as possible, but in any event within the 
schedule set forth in Section IV(E) below. These efforts shall include, 
but are not limited to, making the necessary regulatory filings and 
applications in a timely fashion and using its reasonable best efforts 
to obtain such approvals as expeditiously and timely as possible.
    D. Certain Conditions on the Auction Procedures.
    1. Enova may reject any bid submitted by any party for all or part 
of the Divestiture Assets if the bid offers consideration in an amount 
less than the book value of such assets as reflected on the most recent 
regularly prepared balance sheet of Enova at the time the bid is 
submitted; provided, however, that nothing in this section shall 
prevent the CPUC from setting a minimum bid price or rejecting any bid 
on the basis of price or otherwise.
    2. Enova may structure its requests for bids to require reasonable 
easements, licenses, and other arrangements for the continued operation 
of Common Facilities by Enova.
    3. Before Enova can accept a bid by a potential purchaser received 
under the Autcion Procedures with respect to any of the Divestiture 
Assets to be divested, the bid must be screened by the United States as 
specified in this section. Enova shall provide to the United States 
copies of all bids and any other documents submitted by any potential 
purchaser pursuant to the Auction Procedures. The United States shall 
have thirty days from the date it receives a copy of a bid to notify 
Enova that the potential bid is unacceptable with respect to any of the 
Divestiture Assets specified in the bid; provided, however, the United 
States may extend the thirty-day review period for any such bid for one 
additional thirty-day period by providing written notice to Enova; 
provided further, in all cases the period for review of potential bids 
by the United States shall expire no later than the earlier of five 
days prior to the date set by the CPUC for submission of the proposed 
winning bid by Enova or the thirty-day period (with one possible 
thirty-day extension) described above. If the United States does not 
notify Enova that a proposed bid is unacceptable within the applicable 
time period specified above, the purchaser making such bid shall be 
deemed acceptable by the United States with respect to all of the 
Divestiture Assets specified in that bid. The United States shall base 
its review of all potential bids screened pursuant to this paragraph 
solely on the criteria identified in Section IV(I) of this Final 
Judgment. The United States shall take all appropriate and necessary 
steps to keep the information received pursuant to this section 
confidential.
    E. Timing.

[[Page 33399]]

    1. Enova shall submit applications for authorization and approval 
of the auctions specified in Paragraph IV(B) above for the Divestiture 
Assets no later than ninety days after notice of entry of this Final 
Judgment.
    2. Enova shall complete the sale of the Divestiture Assets as soon 
as practical after the receipt of all necessary governmental approvals; 
provided, however, if the sale of any of the Divestiture Assets is not 
completed within eighteen months after the date of the entry of this 
Final Judgment, a trustee shall be appointed pursuant to Section VI of 
this Final Judgment to effect the divestiture of any unsold assets; 
provided further, the United States may extend the eighteen-month 
period by six months by servicing written notice on Enova prior to the 
expiration of the eighteen-month period; provided further, Enova and 
the United States may be mutual agreement extend further the time in 
which any of the Divestiture Assets shall be sold.
    F. In accomplishing the divestiture ordered by this Final Judgment, 
Defendant promptly shall make known, by usual and customary means, the 
availability of the Divestiture Assets. The California Auction 
Procedures shall be deemed to satisfy this requirement. Defendant shall 
inform any person making an inquiry regarding a possible purchase that 
the sale is being made pursuant to this Final Judgment and provide such 
person with a copy of this Final Judgment. Defendant shall make known 
to any person making an inquiry regarding a possible purchase of the 
Divestiture Assets that the assets defined in Section II(F) are being 
offered for sale. Defendant shall also offer to furnish to all bona 
fide prospective purchasers, subject to customary confidentiality 
assurances, all information regarding the Divestiture Assets 
customarily provided in a due diligence process except such information 
subject to attorney-client privilege or attorney work-product 
privilege. Defendant shall make available such information to Plaintiff 
at the same time that such information is made available to any other 
person.
    G. Defendant shall not interfere with any negotiations by any 
purchaser to employ any employee of the Defendant necessary to the 
operation of Divestiture Assets.
    H. Defendant, shall, at minimum, permit prospective purchasers of 
the Divestiture Assets to have reasonable access to personnel and to 
make such inspection of the Divestiture Assets, and any and all 
financial, operational, or other documents and information customarily 
provided as part of a due diligence process.
    I. Unless the United States otherwise consents in writing, the 
divestiture or divestitures pursuant to this section, or by the trustee 
appointed pursuant to Section VI of this Final Judgment, shall include 
the Divestiture Assets as specified in this Final Judgment (though not 
necessarily all to the same purchaser) and be accomplished by selling 
or otherwise conveying the Divestiture Assets to a purchaser or 
purchasers in such a way as to satisfy the United States, in its sole 
discretion, that none of the terms of any agreement between any 
purchaser and Defendant give Defendant the ability unreasonably to 
raise the purchaser's costs, to lower the purchaser's efficiency, or 
otherwise to interfere in the ability of the purchaser to compete 
effectively in the provision of electricity in California; provided, 
however, the purchaser need not continue operation of these assets.

V. Acquisition

    A. General Prohibitions.
    1. Defendant is enjoined from acquiring California Generation 
Facilities without prior notice to and approval of the United States. 
Such prior approval shall be within the sole discretion of the United 
States.
    2. Defendant is enjoined from entering into any contracts that 
allow Defendant to control any California Generation Facilities without 
prior notice to and approval of the United States. Such prior approval 
shall be within the sole discretion of the United States.
    B. Limitations on Prohibitions.
    1. Acquisition cap--Defendant may acquire or control California 
Generation Facilities without prior approval of the United States if 
Defendant does not own or control, in the aggregate, more than 500 MW 
of capacity of California Generation Facilities. The capacity of 
Defendant's existing nuclear generation assets are excluded from the 
calculation of whether the 500 MW cap has been reached so long as the 
prices Enova receives for electricity generated by the existing nuclear 
generation assets are fixed by law or regulation. The Portland General 
Electric Contract capacity (75 MW) shall be included in the calculation 
of whether the 500 MW cap has been reached (reducing the total 
available to 425 MW), unless and until the Portland General Electric 
Contract terminates or is divested. The capacity of the Divestiture 
Assets shall be included in the calculation of whether the 500 MW cap 
has been reached, as long as Defendant owns such assets.
    2. Acquisitions above the cap--In any event, the Defendant may 
acquire or control, California Generation Facilities in excess of 500 
MW, subject to the prior approval of the United States as provided in 
Paragraphs V(A)(1) and V(A)(2).
    C. Exceptions.
    1. Outside California--Defendant may own, operate, control, or 
acquire any electricity generation facilities other than California 
Generation Facilities.
    2. Cogeneration facilities--Defendant may own, operate, or control 
any cogeneration or renewable generation facilities in California.
    3. Tolling agreements--Defendant may enter into tolling and reverse 
tolling agreements with any electricity generation facilities in 
California, provided Defendant does not control such facilities; 
provided further, that all such tolling and reverse tolling agreements 
include the following provision: ``In accordance with the Final 
Judgment in United States v. Enova Corporation, entered on [date], 
Enova's successors and their affiliates shall not have any ability to 
set the level of output of this electricity generation facility.''
    4. California Public Power Generation Management Services 
Contracts.--Defendant's entry into California Public Power Generation 
Management Services Contracts is not prohibited under Section V(A)(2) 
above, regardless of whether the contract allows for Defendant to 
exercise control of such facilities, and such contracts shall not be 
included in the calculation of whether the Acquisition Cap in Section 
V(B)(1) has been reached; provided however, Defendant may not enter 
into California Public Power Generation Management Services Contracts 
that allow the Defendant to exercise control of such facilities, 
without notice to the United States.
    5. Notification of California Public Power Generation Management 
Services Contracts--Unless such transaction is otherwise subject to the 
reporting and waiting period requirements of the Hart-Scott-Rodino 
Antitrust Improvements Act of 1976, as amended, 15 U.S.C.A. Sec. 18a 
(West 1997) (``HSR Act''), for each California Public Power Generation 
Management Services Contract it enters for which notice is required, 
Defendant shall provide notice thereof to the United States as follows:
    a. Notification shall be provided within five days of acceptance of 
the contract, and shall include copies of all contracts, the names of 
the principal representatives of the parties to the agreement who 
negotiated the agreement, and any management or strategic plans 
discussing the California Public Power Generation Management

[[Page 33400]]

Services Contract that was the subject of the transaction.
    b. This Section shall be broadly construed and any ambiguity or 
uncertainty regarding the filing of notice under this Section shall be 
resolved in favor of filing notice.
    D. Methods of Obtaining Prior Approvals and of Providing Notice--
Defendant shall obtain prior approval and provide notice by sending the 
required materials to Chief, Transportation, Energy, and Agriculture 
Section, Antitrust Division, United States Department of Justice, 325 
Seventh Street, N.W., Suite 500, Washington, DC 20004.
    E. Other Legal Requirements--Nothing in this section limits the 
Defendant's responsibility to comply with the requirements of the HSR 
Act, with respect to any acquisition.

VI. Appointment of Trustee

    A. In the event that Defendant has not divested all of the 
Divestiture Assets within the time specified in Section IV of this 
Final Judgment, the Court shall appoint, on application of the United 
States, a trustee selected by the United States to effect the 
divestiture of the assets.
    B. At or anytime after the appointment of the trustee, if either 
party believes a conflict may exist between this Final Judgment and an 
order of the CPUC relating to the Divestiture Assets, that party may 
move the Court for a resolution of the conflict in light of the status 
of any relevant CPUC proceeding and the purpose of this Final Judgment.
    C. After the appointment of the trustee becomes effective, the 
trustee shall have the right to sell the Divestiture Assets. The 
trustee shall have the power and authority to accomplish the 
divestiture at the best price then obtainable upon a reasonable effort 
by the trustee, subject to the provisions of Sections VI and VII of 
this Final Judgment, and shall have such other powers as the Court 
shall deem appropriate. Subject to Section VI(D) of this Final 
Judgment, the trustee shall have the power and authority to hire at the 
cost and expense of Defendant any investment bankers, attorneys, or 
other agents reasonably necessary in the judgment of the trustee to 
assist in the divestiture, and such professionals and agents shall be 
accountable solely to the trustee. The trustee shall have the power and 
authority to accomplish the divestiture at the earliest possible time 
to a purchaser acceptable to the United States, in its sole judgment. 
Defendant shall not object to a sale by the trustee on any grounds 
other than the trustee's malfeasance. Any such objections by Defendant 
must be conveyed in writing to Plaintiff and the trustee no later than 
ten calendar days after the trustee has provided the notice required 
under Section VII of this Final Judgment.
    D. The trustee shall serve at the cost and expense of Defendant, on 
such terms and conditions as the Court may prescribe, and shall account 
for all monies derived from the sale of the assist sold by the trustee 
and all costs and expenses so incurred. After approval by the Court of 
the trustee's accounting, including fees for its services and those of 
any professionals and agents retained by the trustee, all remaining 
money shall be paid to Enova and the trust shall then be terminated. 
The compensation of such trustee and of any professionals and agents 
retained by the trustee shall be reasonable in light of the value of 
the Divestiture Assets and based on a fee arrangement providing the 
trustee with an incentive based on the price and terms of the 
divestiture and the speed with which it is accomplished.
    E. After the appointment of the trustee becomes effective, 
Defendant shall take no action to interfere with or impede the 
trustee's accomplishment of the required divestiture, and shall use its 
best efforts to assist the trustee in accomplishing the required 
divestiture, including best efforts to effect all necessary regulatory 
approvals. Subject to a customary confidentiality agreement, the 
trustee and any consultants, accountants, attorneys, and other persons 
retained by the trustee shall have full and complete access to the 
personnel, books, records, and facilities related to the Divestiture 
Assets, and Defendant shall develop such financial or other information 
relevant to the Divestiture Assets to be divested customarily provided 
in a due diligence process as the trustee may reasonably request. 
Defendant shall permit prospective purchasers of the Divestiture Assets 
to have access to personnel and to make such inspection of physical 
facilities and any and all financial, operational or other documents 
and information as may be relevant to the divestiture required by this 
Final Judgment.
    F. After the appointment of the trustee becomes effective, the 
trustee shall file monthly reports with Defendant, the United States, 
and the Court, setting forth the trustee's efforts to accomplish 
divestiture of the Divestiture Assets as contemplated under this Final 
Judgment; provided, however, that to the extent such reports contain 
information that the trustee deems confidential, such reports shall not 
be filed in the public docket of the Court. Such reports shall include 
the name, address and telephone number of each person who, during the 
preceding month, made an offer to acquire, expressed an interest in 
acquiring, entered into negotiations to acquire, or was contacted or 
made an inquiry about acquiring, any interest in the Divestiture 
Assets, and shall describe in detail each contact with any such person 
during that period. Defendant may request that information in such 
reports that has been provided as confidential by the Defendant be 
deemed confidential by the trustee. If the trustee does not deem the 
information to be confidential, the information shall not be made 
public before Defendant has an opportunity to seek a protective order 
from the Court. The trustee shall maintain full records of all efforts 
made to divest these operations.
    G. If the trustee has not accomplished the divestiture required by 
Section IV of this Final Judgment within six months after the 
appointment of the trustee becomes effective, the trustee shall 
promptly file with the Court a report setting forth (1) the trustee's 
efforts to accomplish the required divestiture, (2) the reasons, in the 
trustee's judgment, why the required divestiture has not been 
accomplished, and (3) the trustee's recommendations; provided, however, 
that to the extent such reports contain information that the trustee 
deems confidential, such reports shall not be filed in the public 
docket of the Court. The trustee shall at the same time furnish such 
reports to Defendant and the United States, who shall each have the 
right to be heard and to make additional recommendations. The Court 
shall thereafter enter such orders as it shall deem appropriate to 
accomplish the purposes of this Final Judgment, which shall, if 
necessary, include extending the term of the trustee's appointment by a 
period requested by the United States.

VII. Notification

    Within two business days following execution of a definitive 
agreement, contingent upon compliance with the terms of this Final 
Judgment, to effect, in whole or in part, any proposed divestiture 
pursuant to Sections IV or VI of this Final Judgment, Defendant of the 
trustee, whichever is then responsible for effecting the divestiture, 
shall notify Plaintiff of the proposed divestiture. If the trustee is 
responsible, it shall similarly notify Defendant. The notice shall set 
forth the details of the proposed transaction and list the name, 
address, and telephone number of each person not previously identified 
who

[[Page 33401]]

offered to, or expressed an interest in or a desire to, acquire any 
ownership interest in the assets that are the subject of the binding 
contract, together with full details of same. Within fifteen calendar 
days of receipt by Plaintiff of such notice, Plaintiff may request from 
Defendant, the proposed purchaser, any other third party, or the 
trustee, if applicable, additional information concerning the proposed 
divestiture and the proposed purchaser. Defendant and the trustee shall 
furnish any additional information requested within fifteen calendar 
days of the receipt of the request, unless the parties shall otherwise 
agree. Within thirty calendar days after receipt of the notice or 
within twenty calendar days after Plaintiff has been provided the 
additional information requested from Defendant, the proposed 
purchaser, any third party, and the trustee, if there is one, whichever 
is later, the United States shall provide written notice to Defendant 
and the trustee, if there is one, stating whether or not it objects to 
the proposed divestiture. If the United States provides written notice 
to Defendant and the trustee that it does not object, then the 
divestiture may be consummated, subject only to Defendant's limited 
right to object to the sale under Section VI(C) of this Final Judgment. 
Absent written notice that the United States does not object to the 
proposed purchaser or upon objection by the United States, a 
divestiture proposed under Section IV or Section VI shall not be 
consummated. Upon objection by Defendant under the proviso in Section 
VI(C), a divestiture proposed under Section VI shall not be 
consummated. Provided, however, a proposed divestiture pursuant to the 
Auction Procedures approved by the United States under Section IV(D)(3) 
of this Final Judgment shall be deemed acceptable to the United States 
under this section.

VIII. Affidavits

    A. Within thirty calendar days of the filing of this Final Judgment 
and every forty-five calendar days thereafter until the divestiture has 
been completed whether pursuant to Section IV or Section VI of this 
Final Judgment, Enova shall, with respect to Divestiture Assets, 
deliver to Plaintiff an affidavit as to the fact and manner of 
Defendant's compliance with Sections IV or VI of this Final Judgment. 
Each such affidavit shall include, inter alia, the name, address, and 
telephone number of each person who, at any time after the period 
covered by the last such report, made an offer to acquire, expressed an 
interest in acquiring, entered into negotiations to acquire, or was 
contacted or made an inquiry about acquiring, any interest in the 
Divestiture Assets, and shall describe in detail each contact with any 
such person during that period. Each such affidavit shall also include 
a description of the efforts that Defendant has taken to solicit a 
buyer from the Divestiture Assets and to provide required information 
to prospective purchasers, including the limitations, if any, on such 
information.
    B. For Divestiture Assets being sold using the California Auction 
Procedures, during such Auction Procedures, submission of bids to the 
United States in compliance with Section IV shall satisfy compliance 
with the required contents of the affidavits in Section VII(A).
    C. Within twenty calendar days of the filing of this Final 
Judgment, Defendant shall deliver to Plaintiff an affidavit which 
describes in detail all actions Defendant has taken and all steps 
Defendant has implemented on an on-going basis to preserve the 
Divestiture Assets pursuant to Section X of this Final Judgment and 
describes the functions, duties and actions taken by or undertaken at 
the supervision of the individuals described at Section X(J) of this 
Final Judgment with respect to Defendant's efforts to preserve the 
Divestiture Assets. Defendant shall deliver to Plaintiff an affidavit 
describing any changes to the efforts and actions outlined in 
Defendant's earlier affidavits filed pursuant to this section within 
thirty calendar days after the change is implemented. The United States 
shall take all necessary steps to keep the information received 
pursuant to this section confidential.
    D. Defendant shall preserve all records of all efforts made to 
preserve and divest the Divestiture Assets.

IX. Financing

    Defendant shall not finance all or any part of any divestiture made 
pursuant to Sections IV or VI of this Final Judgment.

X. Preservation of Assets

    Until the divestiture required by the Final Judgment has been 
accomplished:
    A. Defendant shall take all steps necessary to ensure that the 
Divestiture Assets will be maintained and operated as an ongoing, 
economically viable and active competitor in the provision of 
electricity; and that, except as necessary to comply with Sections X 
(B) to X (K) of this Final Judgment, the management of any electricity 
generating facilities shall be kept separate and apart from the 
management of Defendant's other businesses and will not be influenced 
by Defendant, and the books, records, and competitively sensitive 
sales, marketing and pricing information associated with electricity 
generating facilities will be kept separate and apart from that of 
Defendant's other businesses.
    B. Defendant shall use all reasonable efforts to maintain and 
increase sales of electricity by the Divestiture Assets, and Defendant 
shall use reasonable efforts to maintain and increase promotional, 
advertising, sales, marketing, and merchandising support for wholesale 
electricity sold in California.
    C. Defendant shall take all steps necessary to ensure that the 
Divestiture Assets are fully maintained in operable condition and shall 
maintain and adhere to normal maintenance schedules for the Divestiture 
Assets.
    D. Defendant shall provide and maintain sufficient lines of sources 
of credit to maintain the Divestiture Assets as viable, ongoing 
businesses.
    E. Defendant shall provide and maintain sufficient working capital 
to maintain the Divestiture Assets as viable ongoing businesses.
    F. Defendant shall not, except as part of a divestiture approved by 
the United States, remove, sell, or transfer any of the Divestiture 
Assets, other than sales in the ordinary course of business.
    G. Unless it has obtained the prior approval of the United States, 
Defendant shall not terminate or reduce the current employment, salary, 
or benefit arrangements for any personnel employed by Defendant who 
work at, or have managerial responsibility for, electricity generating 
facilities, except in the ordinary course of business.
    H. Defendant shall continue all efforts in progress to obtain or 
maintain all permits necessary for operating their electricity 
generating capacity.
    I. Defendant shall take no action that would jeopardize its ability 
to divest the Divestiture Assets as viable, ongoing businesses.
    J. Defendant shall appoint a person or persons to oversee the 
Divestiture Assets, and who will responsible for Defendant's compliance 
with Section X of this Final Judgment.
    K. Prior to the sale of Divestiture Assets, Enova shall not 
transfer any of the Divestiture Assets to any affiliate not regulated 
as a public utility by the CPUC.

XI. Compliance Inspection

    Only for the purposes of determining or securing compliance with 
the Final Judgment and subject to any legally recognized privilege, 
from time to time:
    A. Duly authorized representatives of the Plaintiff, including 
consultants and other persons retained by the United

[[Page 33402]]

States, upon written request of the Assistant Attorney General in 
charge of the Antitrust Division, and on reasonable notice to Defendant 
made to their principal offices, shall be permitted:
    1. Access during office hours of Defendant to inspect and copy all 
books, ledgers, accounts, correspondence, memoranda, and other records 
and documents in the possession or under the control of Defendant, who 
may have counsel present, relating to enforcement of this Final 
Judgment; and
    2. Subject to the reasonable convenience of Defendant and without 
restraint or interference from it, to interview, either informally or 
on the record, its officers, employees, and agents, who may have 
counsel present, regarding any such matters.
    B. Upon the written request of the Assistant Attorney General in 
charge of the Antitrust Division made to Defendant's principal offices, 
Defendant shall submit such written reports, under oath if requested, 
with respect to any matter contained in the Final Judgment.
    C. No information or documents obtained by the means provided in 
Section VIII or Section XI of this Final Judgment shall be divulged by 
a representative of the Plaintiff to any person other than a duly 
authorized representative of the Executive Branch of the United States, 
except in the course of legal proceedings to which the Plaintiff is a 
party, including grant jury proceedings, or for the purpose of securing 
compliance with this Final Judgment, or as otherwise required by law.
    D. If at the time information or documents are furnished by 
Defendant to Plaintiff, Defendant represents and identifies in writing 
the material in any such information or documents to which a claim of 
protection may be asserted under Rule 26(c)(7) of the Federal Rules of 
Civil Procedure, and Defendant marks each pertinent page of such 
material, ``Subject to claim of protection under Rules 26(c)(7) of the 
Federal Rules of Civil Procedure,'' then ten calendar days notice shall 
be given by Plaintiff to Defendant prior to divulging such material in 
any legal proceeding, other than a grant jury proceeding.

XII. Retention of Jurisdiction

    Jurisdiction is retained by this Court for the purpose of enabling 
any of the parties to this Final Judgment to apply to this Court at any 
time for such further orders and direction as may be necessary or 
appropriate for the construction or carrying out of this Final 
Judgment, for the modification of any of the provisions hereof, for the 
enforcement of compliance herewith, and for the punishment of any 
violations hereof.

XIII. Termination and Modification

    A. This Final Judgment will expire on the tenth anniversary of the 
date of its entry unless the Final Judgment is terminated pursuant to 
Section XIII(B); provided, however, the Final Judgment will terminate 
when the United States notifies Enova and the Court that Enova has 
provided to the United States documentation sufficient to prove (1) 
that the merger between Enova and Pacific identified in the Complaint 
has been terminated; or (2) that an Independent System Operator has 
assumed control of Pacific's gas pipelines within California in a 
manner satisfactory to the United States. The United States shall, in 
its sole discretion, determine whether the documentation proffered by 
Enova is sufficient.
    B. After five years from the date it is entered, this Final 
Judgment shall terminate if Defendant demonstrates to the Court that 
(1) it no longer owns any of its existing nuclear assets, or (2) such 
assets are no long in operation, or (3) the output of those nuclear 
assets is required by law or regulation to be sold at a fixed price.
    C. Enova's obligation to divest an asset shall terminate if any 
governmental authority permanently revokes any license or permit 
necessary for the operation of such asset, properly exercises power or 
eminent domain with respect to such asset, or enters into settlement 
agreement with Enova regarding he disposition of such asset to a third 
party.
    D. Modification of Section V.
    1. In the event that Defendant divests all of its existing nuclear 
generation assets, the total ownership capacity limit in Section 
V(B)(1) of this Final Judgment will increase to 800 MW; however, in no 
event shall the total ownership capacity limit in Section V(B)(1) 
exceed the greater of 500 MW or 10% of Defendant's total electricity 
retail sales.
    2. In the event that Defendant's total retail electricity sales at 
any point exceed 8,000 MW capacity, the total capacity ownership limit 
in Section V(B)(1) of this Final Judgment will be increased up to 10% 
of such retail electricity sales.

XIV. Effect of Regulatory Approvals

    The approvals by the United States required by his Final Judgment 
for sale of Divestiture Assets are in addition to the necessary 
approvals by the CPUC or any other governmental authorities for the 
sale of such assets.

XV. Public Interest

    Entry of this Final Judgment is in the public interest.

Dated:-----------------------------------------------------------------

----------------------------------------------------------------------
United States District Judge

Competitive Impact Statement

    The United States, pursuant to Section 2(b) of the Antitrust 
Procedures and Penalties Act (``APPA''), 15 U.S.C. Sec. 16 (b)-(h), 
files this Competitive Impact Statement relating to the proposed Final 
Judgment submitted for entry in this civil antitrust proceeding.

I. Nature and Purpose of the Proceeding

    The United States filed a civil antitrust Complaint on March 9, 
1998, alleging that the proposed merger of Pacific Enterprises 
(``Pacific'') and Enova Corporation (``Enova'') would violate Section 7 
of the Clayton Act, 15 U.S.C. Sec. 18. The Complaint alleges that 
Pacific is a California gas utility company and Enova is a California 
electric utility company, and that this transaction would give the 
combined company (``PE/Enova'') both the incentive and the ability to 
lessen competition in the market for electricity in California. In 
particular, this acquisition would give PE/Enova the incentive and 
ability to limit the supply of natural gas to California electric power 
plants, raising their costs and the price California consumers pay for 
electricity. The acquisition is thus likely to lessen competition 
substantially among providers of electricity, and so violate Section 7 
of the Clayton Act. The prayer for relief in the Complaint seeks (1) a 
judgment that the proposed acquisition would violate Section 7 of the 
Clayton Act; (2) a preliminary and permanent injunction preventing 
consummation of the proposed merger; (3) an award to the United States 
of the costs of this action; and (4) such other relief as is proper.
    At the same time the Complaint was filed, the United States also 
filed a proposed settlement that would permit Pacific Enova to merge, 
but requires a divestiture that would preserve competition in the 
market for electricity in California. This settlement consists of a 
Stipulation and Order (``Stipulation'') and a proposed Final Judgment 
(``Final Judgment'').
    The proposed Final Judgment orders Enova to sell all of its rights, 
titles, and interests in Encina and South Bay electricity generation 
facilities located at Carlsbad and Chula Vista, California (the 
``Divestiture Assets''), to a

[[Page 33403]]

purchaser or purchasers acceptable to the United States in its sole 
discretion.\1\ Enova must submit required applications to divest the 
assets no later than ninety days after entry of the Final Judgment, and 
complete the divestiture as soon as practicable after receipt of all 
necessary government approvals, in accordance with the procedures 
specified in the proposed Final Judgment. The Stipulation and Final 
Judgment also require Enova to ensure that until the divestiture 
mandated by the Final Judgment has been accomplished, the management of 
any electricity generating facilities will be kept separate and apart 
from the management of Enova's other businesses.
---------------------------------------------------------------------------

    \1\ The Final Judgment provides that the approvals by the United 
States required by this Final Judgment for sale of these assets are 
in addition to the necessary approvals by the California Public 
Utilities Commission (``CPUC'') or any other governmental 
authorities for the sale of such assets.
---------------------------------------------------------------------------

    The United States and Enova have stipulated that the proposed Final 
Judgment may be entered after compliance with the APPA. Entry of the 
proposed Final Judgment would terminate this action, except that the 
Court would retain jurisdiction to construe, modify, or enforce the 
provisions of the proposed Final Judgment and to punish violations of 
it.

II. Description of the Events Giving Rise to the Alleged Violation

A. Enova, Pacific, and the Proposed Transaction
    Enova, a California corporation headquartered in San Diego, 
California, owns San Diego Gas & Electric Co. (``SDG&E''), which is an 
electric utility that serves the San Diego area. Through SDG&E, Enova 
is a major provider of electricity in southern California, with 
approximately $1.6 billion in annual electricity sales. It sells 
electricity generated by plants that use coal, gas, nuclear power, and 
hydropower for fuel.
    Pacific, through its wholly owned subsidiary Southern California 
Gas Company, is virtually the sole provider of natural gas 
transportation services to plants in southern California that use 
natural gas to produce electricity (``gas-fired generators'' or ``gas-
fired plants''). Pacific is also the sole provider of natural gas 
storage services throughout all of California.
    Under an Agreement and Plan of Merger and Reorganization dated 
October 12, 1996, Enova and Pacific will each become wholly owned 
subsidiaries of a common holding company parent as soon as all state 
and federal regulatory approvals have been obtained.
B. Trade and Commerce
    The Complaint alleges that the effect of the merger of Pacific and 
Enova would be to lessen competition substantially in the provision of 
electricity in California during high demand periods.
    California's electricity industry is dominated by Enova and two 
other regulated, investor-owned utilities. Electricity services are 
also provided by California public power providers such as 
municipalities, water districts, irrigation districts and the state of 
California. As a result of a legislatively mandated restructuring, the 
California electric power market will experience significant changes in 
1998. As of March 31, 1998, most electricity generated in California is 
bought and sold through the California Power Exchange (``the pool''), a 
central, computerized bidding system that matches electricity supply 
and demand during every half-hour period during the day. State 
regulations require regulated utilities to buy and sell all their 
electricity through the pool during a four-year transition period.\2\
---------------------------------------------------------------------------

    \2\ Under these state regulations, the utility companies 
continue to own California's electricity transmission grid. The 
transmission grid, however, is under the operational control of an 
Independent Systems Operator (``ISO''), and distribution continues 
to be regulated by the CPUC.
---------------------------------------------------------------------------

    With the pool, all sellers of electricity send in bids for every 
half hour in which they want to sell electricity. Similarly, all buyers 
of electricity send in bids for every half hour in which they wish to 
buy. The pool allocates power until all demand is met. The price per 
unit of electricity for any given half hour is determined by the most 
expensive unit sold that half hour with all sellers receiving that 
price, regardless of their costs or their bids. Nuclear-powered 
generators, however, will continue to receive regulated rates for at 
least four years after the California pool began operation.
    Currently, regulated electric utilities sell over 80% of all retail 
electricity in California. Because these utilities must buy all of 
their electricity from the pool, the pool prices--the price the 
utilities pay for the electricity they distribute--will directly affect 
the price most consumers in California pay for electricity.
    Electricity sold in California is generated from power plants using 
one of four fuels--gas, coal, hydropower, and nuclear--and the costs of 
generating electricity from these plants differ significantly. Although 
certain gas-fired plants are more efficient than others, gas-fired 
plants are in general the most costly to operate. Because they cost the 
most to operate, the gas-fired plants will bid the highest prices into 
the pool and are the last ones to be turned on to meet consumer demand 
for electricity. They operate about 30% to 50% of the time, primarily 
during periods of high electricity demand, such as the summer when 
consumer use of air conditioning and other electric-powered appliances 
increases and less expensive hydroelectric power is unavailable. During 
these periods, the gas-fired plants, as the most costly to operate and 
thus the highest bidders into the pool, are able to set the price for 
all electricity sold through the pool.
    Gas-fired power plants cannot and do not switch to other fuels in 
response to price increases in natural gas transportation or storage 
services, and in California Pacific controls almost all gas-fired 
generators' access to gas supply because the state of California has 
granted Pacific a monopoly on transportation of natural gas within 
southern California. Consequently, 96% of gas-fired generators in 
southern California buy gas transportation services from it. Pacific 
also has a monopoly on all natural gas storage services throughout 
California. Although regulated by the California Public Utilities 
Commission (``CPUC''), Pacific has the ability to restrict the 
availability of gas transportation and storage to consumers, including 
gas-fired generators, by limiting their supply or cutting them off 
entirely. Limiting or cutting off gas supply raises the price gas-fired 
plants pay for delivered natural gas and in turn raises the cost of the 
electricity they produce.
C. The Relevant Market
    The Complaint alleges that the provision of electricity in 
California during high demand periods constitutes a relevant market for 
antitrust purposes--that is, in the language of the Clayton Act, it is 
a ``line of commerce'' and is in a ``section of the country.''
    Consumers of electricity in California cannot and do not switch to 
other products in response to an increase in the price of electricity. 
Thus, a small but significant and nontransitory increase in prices for 
electricity would not cause a significant number of electricity 
consumers to substitute other energy sources for electricity, and 
electricity is a relevant product for antitrust purposes.
    During periods of high demand, California consumers can only obtain 
electricity from local power plants. There is very limited electricity 
transmission capacity into California,

[[Page 33404]]

with only two major transmission lines leading into the state, one from 
the hydroelectric and coal-rich northwestern United States, and one 
from several coal and nuclear plants in Arizona. During peak hours, the 
two major transmission lines are filled to capacity, and generation 
located within the state must supply the remaining electricity required 
by California consumers. Thus, in periods of high demand, consumers are 
unable to turn sources of electricity generated outside of California, 
and California is therefore a relevant geographic market for antitrust 
purposes.
D. Anticompetitive Consequences of the Acquisition
    The Complaint alleges that, if the proposed transaction would have 
the following effects, among others, unless it is restrained:
    1. Competition in the market for electricity in California during 
high demand periods may be substantially lessened; and
    2. Prices for electricity to consumers in California during high 
demand periods are likely to increase.
    By virtue of its monopoly over natural gas transportation and 
storage, Pacific currently has the ability to increase the price of 
electricity, when during high demand periods, electricity from 
California gas-fired generators is needed to supplement less costly 
electricity. Pacific can restrict gas-fired generators' access to gas, 
which has the effect of raising the cost of gas-fired generators in 
general. Alternatively, Pacific can cut off or impede the more 
efficient gas generators' access to gas, leaving higher-cost generators 
to meet consumer demand for electricity. In either case, Pacific is 
able to increase the cost of electricity from gas-fired plants, thereby 
increasing the prices they bid into the pool and ultimately the price 
of electricity sold through the pool. But Pacific currently owns no 
electricity generation plants that would benefit from an increase in 
the pool price for electricity.
    Enova, on the other hand, controls over 2600 MW of electricity, 
some of which comes from lower cost plants that run most of the time, 
and as a consequence, would benefit from an increase of the price of 
electricity sold through the pool. However, Enova currently has no 
ability to increase the price of electricity by raising the costs of 
competing electric utilities because it does not control any input, 
such as gas.
    Once Pacific's control of gas is combined with Enova's low-cost 
electricity generation facilities, the merged firm, PE/Enova, would 
have the ability to raise electricity prices by limiting gas supply to 
competing gas-fired generators, as well as the incentive to do so. PE/
Enova's ownership of lower-cost generation would enable it to profit 
substantially from any increase in the price of electricity sold 
through the pool, and these profits would more than offset any losses 
from reducing its gas transportation and storage sales to competing 
gas-fired plants. The merged firm, PE/Enova, would thus have the 
incentive and ability to lessen competition in the market for 
electricity in California. As a result, consumers would likely pay 
higher prices for electricity.
E. Entry
    Successful entry or expansion in either the market for electricity 
generation or the market for intrastate natural gas transportation and 
storage in California would not be timely, likely, or sufficient to 
prevent any harm to competition. Entry or expansion would be difficult, 
time consuming, and costly, as well as extremely unlikely. Entry into 
electricity generation could counteract a post-merger price increase 
only if the entrants provided significant generation capacity and were 
not dependent on natural gas to generate electricity. Entry by building 
new hydro-powered, coal-fired, or nuclear-powered generators is highly 
unlikely, however. Each of these face substantial safety, 
environmental, and other regulatory barriers that would make entry 
costly, time consuming, and uncertain. Similarly, entry by building new 
lines to transmit electricity from outside California requires myriad 
environmental, safety, and zoning approvals, which would be difficult, 
costly, an time consuming to obtain. Finally, California's present 
regulatory scheme makes it economically impossible for alternative 
suppliers of natural gas transportation to enter the California market. 
California's pipeline certification process discourages entry by 
intrastate firms, while its restrictions on access to intrastate gas 
transportation markets discourages entry by interstate pipelines.\3\
---------------------------------------------------------------------------

    \3\ Entry into gas storage requires access to appropriate 
geologic formations, such as drained aquifers and abandoned gas 
fields and sale mines of a particular size and porosity, which, in 
California, are all owned by Pacific.
---------------------------------------------------------------------------

III. Explanation of the Proposed Final Judgment

    The proposed Final Judgment would preserve the competition that 
would have been lost in California's emerging competitive market for 
electricity had the PE/Enova merger gone forward as originally 
structured. Within eighteen months after filing the proposed Final 
Judgment, Defendant must sell all of Enova's rights, titles, and 
interests in the Divestiture Assets. The assets and interests will be 
sold to a purchaser or purchasers acceptable to the United States in 
its sole discretion. In addition, the Final Judgment limits the ability 
of the merged company to reacquire or control any similar assets, or to 
enter into contracts to manage generating plants in California.
A. Divestiture
    The Final Judgment requires Defendant to sell all generation assets 
that would likely give PE/Enova the incentive to raise electricity 
prices.\4\ To that end, the Final Judgment requires Defendant to divest 
all of its low-cost gas generators--1644 MW of generation assets in 
total. In particular, Defendant is required to divest South Bay plant 
(951 MW) in Chula Vista, California, and the Encina plant (693 MW) in 
Carlsbad, California. Because these generators operate in almost all 
hours of the year and are relatively low-cost, if PE/Enova were to own 
them, it could earn substantial profits (revenues exceeding its costs) 
by restricting the supply of natural gas which, as explained above, 
would increase the overall price for electricity in the pool and thus 
the price PE/Enova would receive for electricity.
---------------------------------------------------------------------------

    \4\ The relief in the proposed Final Judgment is intended to 
remedy only those anticompetitive effects stemming from the PE/Enova 
merge. Nothing in the Proposed Final Judgment is intended to limit 
the United States' ability to investigate or to bring actions, where 
appropriate, challenging other past or future activities of Pacific 
or Enova.
---------------------------------------------------------------------------

    Under the Final Judgment, Enova is required to use its best efforts 
to sell the Divestiture Assets under auction procedures approved by the 
CPUC. Enova has already requested that the CPUC begin an auction of all 
of the Divestiture Assets.\5\ Under the Final Judgment, bid proposals 
will be submitted to the United States for review to determine whether 
the divestiture to that bidder would be acceptable.
---------------------------------------------------------------------------

    \5\ The CPUC proceeding contemplates 18 months for completion of 
the divestitures. See Application of San Diego Gas & Electric 
Company (U 902-E) for Authority to Sell Electrical Generation 
Facilities and Power Contracts before the CPUC (Dec. 19, 1997).
---------------------------------------------------------------------------

    Defendant will have eighteen months after entry of the Final 
Judgment to auction the Divestiture Assets.\6\ The United States may 
extend this eighteen-month period, and both parties may jointly agree 
to extend the auction

[[Page 33405]]

period further. If any part of the Divestiture Assets are not sold 
within the eighteen months or any extension, Defendant must withdraw 
those assets from the California auction process and allow them to be 
sold by a trustee, under specific procedures designed to ensure 
expeditious sales.
---------------------------------------------------------------------------

    \6\ The divestiture period, which is longer than the usual 
period permitted by the Division, avoids unnecessary conflict with 
the ongoing state regulatory process for divestiture.
---------------------------------------------------------------------------

    Enova is not required to divest certain generation assets that are 
not likely to provide an incentive to raise pool prices. These are 
combustion turbine assets (``CTAs''), nuclear assets, cogeneration 
assets presently under contract (``Cogeneration Assets''), and a long-
term contract with Public Service Company of New Mexico (``New Mexico 
Contract'').\7\
---------------------------------------------------------------------------

    \7\ Although the Final Judgment does not place any additional 
obligation on the Defendant to sell any assets beyond South Bay and 
Enicina, the Defendant has applied to the CPUC to sell all its 
generation assets, including the nuclear assets, the CTAs, and the 
Cogeneration Assets, in the CPUC auction. See Application of San 
Diego Gas & Electric Company (U 902-E) for Authority to Sell 
Electrical Generation Facilities and Power Contracts before the CPUC 
(Dec. 19, 1997).
---------------------------------------------------------------------------

    1. CTAs--The CTAs are seventeen generators scattered throughout 
California, none of which exceed 20 MW capacity. They are fueled 
primarily by natural gas, and in some cases by diesel fuel. They are 
very expensive to run and were built to be used only at times of the 
very highest peak demand. Owning CTAs gives PE/Enova little, if any, 
incentive to raise electricity prices--even with increased electricity 
prices, PE/Enova cannot count either on selling the electricity from 
these generators or obtaining a price that significantly exceed their 
costs. Further, air pollution restrictions may prevent operation of 
certain CTAs during peak summer hours.
    2. Nuclear--Enova holds a 20% (or 430 MW) non-operating interest in 
the San Onofre Nuclear Generating Station (``SONGS'') and its output. 
PE/Enova, however, will not receive the pool price for SONGS 
electricity for at least the next four years, because nuclear plants 
will remain price regulated. If nuclear power prices become deregulated 
after 2001, the Final Judgment provides that (1) SONGS capacity will 
count towards calculation of Defendant's reacquisition cap (see 
discussion of cap, infra); and (2) the Final Judgment will remain in 
effect for ten years instead of five.
    3. Congeneration Assets--The cogeneration assets comprise nine 
contracts of no more than 50 MW each, for a total of 207 MW. Their 
output is more costly than most of the electricity produced in 
California and will be sold at a regulated rate. Retention of these 
assets, therefore, does not provide PE/Enova with the incentive to 
increase the pool price for electricity.
    4. The New Mexico Contract--This contract provides Enova with 100 
MW. Given the other divestitures, the small amount of capacity 
involved, and the fact that the contract expires in less than three 
years, it provides little incentive to raise the pool price.
B. Limitations on Acquisition
    1. Reacquistion. The Final Judgment limits Enova's ability to 
reacquire the same kind of assets that it has been ordered to divest: 
existing, low-cost assets inside California. These assets are referred 
to in the Final Judgment as ``California Generation Facilities.\8\ At 
any time during the Final Judgment, if Defendant owns or controls more 
than 500 MW (total) of California Generating Facilities,\9\ then it 
cannot acquire or gain control of additional California Generation 
Facilities without prior approval of the United States.\10\ Because the 
Divestiture Assets count towards calculation of the 500 MW acquisition 
cap, Enova cannot acquire or gain control of any more California 
Generation Facilities without prior approval by the United States until 
Enova substantially completes the divestiture.
---------------------------------------------------------------------------

    \8\ The Final Judgment specifically defines ``California 
Generation Facilities'' to mean ``(1) electricity generation 
facilities in California in existence on January 1, 1998, excluding 
such facilities that are rebuilt, repowered, or activated out of 
dormancy after January 1, 1998, as long as such rebuilding, 
repowering, or activation out of dormancy project, if done by 
Defendant, begins within one year of purchase; and (2) any contract 
for operation and sale of output from generating assets of the Los 
Angeles Department of Water and Power.''
    \9\ A contract with Portland Gas & Electric for 75 MW, along 
with the same amount of firm transmission capacity, is included in 
the 500 MW cap, because it is a source of low-cost generation that 
can be sold in the pool. The Final Judgment allows Defendant to keep 
the contract, which expires Dec. 31, 2013, but reduces the cap by 75 
MW until the contract is divested.
    \10\ The Final Judgment defines ``acquire'' to include 
``obtaining any interest in any electricity generating facilities or 
capacity,'' and defines ``control'' to mean ``have the ability to 
set the level of output of an electricity generation facility.''
---------------------------------------------------------------------------

    Prior approval of subsequent acquisitions ensures that PR/Enova 
does not circumvent the divestiture ordered by the Final Judgment by 
acquiring or controlling generating facilities that give it the same 
incentive to raise the pool price for electricity as the Divestiture 
Assets did. Because of the California electricity market restructuring 
(which includes CPUS orders requiring major divestiture from regulated 
utilities), unusual and significant amounts of generating capacity will 
be readily available for purchase, lease, or contractual control for 
the next few years.
    2. The Acquisition Cap. The Final Judgment allows the merged 
company to own or control 500 MW of existing California Generation 
Facilities. As a California retail distributor, PE/Enova may operate 
more effectively if it owns or controls some local capacity. This 500 
MW capacity provides PE/Enova a source of back-up electricity for its 
1600 MW retail sales in case of problems with electricity supply bought 
on the open market. At the same time, it does not provide PE/Enova with 
sufficient wholesale electricity sales to give it the incentive to 
raise the pool price for electricity by reducing its gas sales.
    3. Limitation Applicable Only to Existing California Assets. The 
Final Judgment does not impose the prior approval requirement on 
Enova's acquisition of assets outside of California. As noted above, 
Pacific has the ability to raise the price of electricity during high 
demand periods because significant transmission constraints limit 
electricity imports from outside of the state. These import constraints 
mean that PE/Enova cannot count on the sale in the California pool of 
electricity from assets outside California, and thus acquisition of 
such assets would not give it the incentive to raise the pool price.
    In addition, the Final Judgment does not prevent PE/Enova from 
building new capacity in California, or from acquiring capacity built 
in California after January 1, 1998. New capacity will only be built in 
California if the output is inexpensive enough to be sold in many 
hours. By increasing the amount of less expensive power available to 
meet demand, new, low-cost capacity will reduce the number of hours in 
which the most costly gas-fired capacity is needed. This in turn will 
limit PE/Enova's ability to raise the pool price since it is more 
costly and difficult for PE/Enova to restrict gas to more numerous low-
cost plants. For the same reasons, the Final Judgment allows the merged 
company to acquire or gain control of plants that are rebuilt, 
repowered, or activated out of dormancy after January 1, 1998. Output 
from such plants is the equivalent of output from new-build capacity.
    Finally, Enova may own, operate, and control any cogeneration or 
renewable resources and may enter into tolling agreements and reverse 
tolling agreements,\11\ so long as it does not

[[Page 33406]]

control the plan's output level. None of these arrangements or 
facilities will provide PE/Enova significant additional ability or 
incentive to raise the price for electricity by reducing its gas sales.
---------------------------------------------------------------------------

    \11\ Tolling agreements allow one company to produce electricity 
with its own gas at another company's generator for a set fee. 
Reverse tolling agreements allow a gas supplier to stop providing 
natural gas to a generator at the supplier's discretion. The Final 
Judgment provides that Defendant may enter into tolling and reverse 
tolling agreements with any electricity generation facilities in 
California, provided Defendant does not control such facilities; 
provided further, that all such tolling and reverse tolling 
agreements include the following provision: ``In accordance with the 
Final Judgment in United States v. Enova Corporation, entered on 
[date], Enova's successors and their affiliates shall not have any 
ability to set the level of output of this electricity generation 
facility.''
---------------------------------------------------------------------------

C. Limitations on Management Contracts
    The Final Judgment provides a check on Enova's ability to acquire 
control of California Public Power Provider (``CPPP'') owned assets 
through management contracts.\12\ With the exception of Los Angeles 
Department of Water and Power's (``LADWP'') facilities, the generation 
facilities owned by CPPPs are primarily small, gas- and oil-fired or 
hydroelectric plants. Management contracts enable CPPPs to hire experts 
in generation management to run their plants for them. The current 
investor-owned utilities, including Enova, plan to compete for these 
contracts. Under these contracts, the manager may obtain control of the 
generation facilities and all or most of the profits which, if PE/Enova 
were the manager, could give it the incentive to raise electric prices.
---------------------------------------------------------------------------

    \12\ The Final Judgment defines a specific type of management 
services contract--a ``California Public Power Generation Management 
Services Contract''--to mean ``a bona fide contract for managing the 
operation and sale of output from California Generation Facilities 
owned by a municipality, an irrigation district, other California 
state authority, or their agents on January 1, 1998; provided, 
however, that a contract for managing the operation and sale of 
output from generation assets of LADWP shall not be deemed a 
California Public Power Generation Management Services Contract.''
---------------------------------------------------------------------------

    The Final Judgment directs that Defendant shall provide notice to 
the United States of any management contract that Defendant enters, 
unless such management contract is reportable under the Hart-Scott-
Rodino Antitrust Improvements Act. The notice provision balances the 
efficiencies of competition for CPPP management contracts with the 
possible anticompetitive effect from Defendant controlling CPPP assets. 
It enables the United States to monitor Defendant's level of capacity 
control without removing it as a viable competitor for these contracts.
    If PE/Enova were to enter into a management contract with LADWP, 
however, it would be required to obtain prior approval from the United 
States. LADWP controls 3700 MW of capacity in or directly linked to 
California. A large part of this capacity is low cost. Absent the prior 
approval requirement, the merged company could regain in one 
transaction even more incentive to raise the pool price than it had 
before auctioning the Divestiture Assets. The probable competitive harm 
threatened by Defendant's sudden reacquisition of all or a substantial 
part of LADWP's 3700 MW of generation via management contacts more than 
offsets possible efficiencies gained by Enova bidding on a LADWP 
management contracts.
D. Termination or Modification of the Final Judgment
    The Final Judgment--and its prior approval and notice obligations--
remain in effect until the tenth anniversary of the date of its entry 
unless the Final Judgment is terminated earlier under specific 
conditions. The Final Judgment also provides that the reacquisition 
limitations will be modified under certain conditions.
    1. Termination of the Final Judgment. The Final Judgment provides 
that it shall terminate at any time if the United States determines 
that the merger between Enova and Pacific identified in the Complaint 
has been terminated. It will also terminate if the United States 
determines that an Independent System Operator (``ISO'') has assumed 
control of Pacific's gas pipelines within California. In that event, 
PE/Enova will lose the ability to control access to gas transportation 
and storage. Without these tools, the merged company will not be able 
to raise the price for electricity sold through the pool by reducing 
its gas sales, and the basis for the Final Judgment would be removed.
    In addition, the decree will terminate after five years under 
certain conditions. As noted above, the decree imposes continuing prior 
approval and notice obligations to ensure that PE/Enova does not simply 
reacquire assets similar to those it has divested, which it could 
readily do during the restructuring of California's electricity 
market.\13\ Most of the changes in ownership in electric generation and 
control should occur in the next five years. Hence termination of the 
decree at the end of five years would be reasonable.
---------------------------------------------------------------------------

    \13\ As discussed above in Section III(B)(1), significant 
amounts of generating capacity will be available for purchase, 
lease, or contractual control during the next few years.
---------------------------------------------------------------------------

    There would be a cause for concern, however, if PE/Enova could sell 
SONGS capacity at the unregulated pool price--it would be in essence be 
acquiring 430 MW of output without opportunity for the government to 
challenge. For this reason, the decree will terminate in five years 
only if (1) Enova no longer owns any of its existing nuclear assets; 
(2) its nuclear assets are no longer in operation; or (3) the output of 
those nuclear assets is required by law or regulation to be sold at a 
fixed price.
    Finally, the Final Judgment will partially terminate as to any 
Divestiture Asset if any governmental authority permanently revokes any 
license or permit necessary for the operation of such asset, properly 
exercises power or eminent domain with respect to such asset, or enters 
into a settlement agreement with Enova regarding the disposition of 
such asset to a third party.
    2. Modification of Reacquisition Limits. The Final Judgment 
provides that the 500 MW ownership cap may increase under two 
conditions: (1) If Enova divests all of its existing nuclear generation 
assets, the acquisition cap will increase to 800 MW; and (2) if 
defendant's total retail electricity sales at any point exceed 8,000 MW 
the ownership cap will be increased up to 10% of such retail 
electricity sales. The first condition allows an adjustment of the 
ownership cap in the event the SONGS is sold to replace a portion of 
the SONGS generation. (The 500 MW cap is a cap on acquisitions in 
addition to holding SONGS.) The second condition provides for the 
possibility that SONGS is not sold but that Enova's retail sales exceed 
8,000 MW, and it allows defendant sufficient local generation to back 
up its expended retail sales.
E. Trustee Provisions
    Until the ordered divestiture takes place, Enova must take all 
reasonable steps necessary to accomplish the divestiture, and cooperate 
with any prospective purchaser. If defendant does not accomplish the 
ordered divestiture within the specified time period, the proposed 
Final Judgment provides for procedures by which the Court shall appoint 
a trustee to complete the divestiture. In that case, Defendant must 
cooperate fully with the trustee.
    If a trustee is appointed, the proposed Final Judgment provides 
that Defendant will pay all costs and expenses of the trustee. The 
trustee's compensation will be structured so as to provide an incentive 
for the trustee to obtain the highest price for the assets to be 
divested, and to accomplish the divestiture as quickly as possible. 
After the effective date of his or her appointment, the trustee shall 
serve under such other conditions as the Court may prescribe. After his 
or her

[[Page 33407]]

appointment becomes effective, the trustee will file monthly reports 
with the parties and the Court, setting forth the trustee's efforts to 
accomplish the divestiture. At the end of six months, if the 
divestiture has not been accomplished, the trustee shall file promptly 
with the Court a report that sets forth (1) the trustee's efforts to 
accomplish the divestiture, (2) the reasons, in the trustee's judgment, 
why the divestiture has not been accomplished, and (3) the trustee's 
recommendations. The trustee's report will be furnished to the parties 
and shall be filed in the public docket, except to the extent the 
report contains information the trustee deems confidential. The parties 
each will have the right to make additional recommendations to the 
Court. The Court shall enter such orders as it deems appropriate to 
accomplish the purposes of this Final Judgment.
F. Provisions for Separate Management
    The Stipulation and Final Judgment require Enova to ensure that, 
until the divestiture mandated by the Final Judgment has been 
accomplished, the management of any electricity generating facilities 
shall be kept separate and apart from the management of defendant's 
other businesses, and will not be influenced by defendant. Enova must 
appoint a person or persons to oversee the Divestiture Assets and to be 
responsible for it's compliance with these provisions.

IV. Remedies Available to Potential Private Litigants

    Section 4 of the Clayton Act, 15 U.S.C. Sec. 15, provides that any 
person who has been injured as a result of conduct prohibited by the 
antitrust laws may bring suit in federal court to recover three times 
the damages the person has suffered, as well as costs and reasonable 
attorney's fees. Entry of the proposed Final Judgment will neither 
impair nor assist the bringing of any private antitrust damage action. 
Under the provisions of Section 5(a) of the Clayton Act, 15 U.S.C. 
Sec. 16(a), the proposed Final judgment has no prima facies effect in 
any subsequent private lawsuit that may be brought against Enova.

V. Procedures Available for Modification of the Proposed Final Judgment

    The United States and the defendant have stipulated that the 
proposed Final Judgment may be entered by the Court after compliance 
with the provisions of the APPA, provided that the United States has 
not withdrawn its consent. The APPA conditions entry upon the Court's 
determination that the proposed Final Judgment is in the public 
interest.
    The APPA provides a period of at least sixty days preceding the 
effective date of the proposed Final Judgment within which any person 
may submit to the United States written comments regarding the proposed 
Final Judgment. Any person who wishes to comment should do so within 
sixty days of the date of publication of this Competitive Impact 
Statement in the Federal Register. The United States will evaluate and 
respond to the comments. All comments will be given due consideration 
by the United States, which remains free to withdraw its consent to the 
proposed Final Judgment at any time prior to entry. The comments and 
the responses of the United States will be filed with the Court and 
published in the Federal Register.
    Written comments should be submitted to: Roger W. Fones, Chief, 
Transportation, Energy, & Agriculture Section, Antitrust Division, 
United States Department of Justice, 325 Seventh Street, N.W., Suite 
500, Washington, DC 20530.
    The proposed Final Judgment provides that the Court retains 
jurisdiction over this action, and the parties may apply to the Court 
for any order necessary or appropriate for the modification, 
interpretation, or enforcement of the Final Judgment.

VI. Alternatives to the Proposed Final Judgment

    The United States considered, as an alternative to the proposed 
Final Judgment, a full trial on the merits of its Complaint against 
Defendant. The United States is satisfied, however, that the 
divestiture of the assets and other relief contained in the proposed 
Final Judgment will preserve viable competition in the market for 
electricity in California that otherwise would be affected adversely by 
the acquisition. Thus, the proposed Final Judgment would achieve the 
relief the government would have obtained through litigation, but 
avoids the time, expense, and uncertainty of a full trial on the merits 
of the government's Complaint.

VII. Standard of Review Under the APPA for Proposed Final Judgment

    The APPA requires that proposed consent judgments in antitrust 
cases brought by the United States be subject to a sixty-day comment 
period, after which the Court shall determine whether entry of the 
proposed Final Judgment ``is in the public interest.'' In making that 
determination the Court may consider.

    (1) The competitive impact of such judgment, including 
termination of alleged violations, provisions of enforcement and 
modifications, duration or relief sought, anticipated effects of 
alternative remedies actually considered, and any other 
considerations bearing upon the adequacy of such judgment;
    (2) the impact of entry of such judgment upon the public 
generally and individuals alleging specific injury from the 
violations set forth in the complaint including consideration of the 
public benefit, if any, to be derived from a determination of the 
issues at trial.

15 U.S.C. Sec. 16(e). As the United States Court of Appeals for the 
District of Columbia Circuit has held, this statute permits a court to 
consider, among other things, the relationship between the remedy 
secured and the specific allegations set forth in the government's 
complaint, whether the Final Judgment is sufficiently clear, whether 
enforcement mechanisms are sufficient, and whether the Final Judgment 
may positively harm third parties. See United States v. Microsoft, 56 
F.3d 1448, 1461-62 (D.C. Cir. 1995).
    In conducting this inquiry, ``the Court is nowhere compelled to go 
to trial or to engage in extended proceedings which might have the 
effect of vitiating the benefits of prompt and less costly settlement 
through the consent decree process.''\14\ Rather,

    \14\ 119 Cong. Rec. 24598 (1973), See also United States v. 
Gillette Co., 406 F. Supp. 713, 715 (D. Mass. 1975). A ``public 
interest'' determination can be made properly on the basis of the 
Competitive Impact Statement and Response to Comments filed pursuant 
to the APPA. Although the APPA authorizes the use of additional 
procedures, see 15 U.S.C. Sec. 16(f), those procedures are 
discretionary. A court need not invoke any of them unless it 
believes that the comments have raised significant issues and that 
further proceedings would aid the court in resolving those issues. 
See H.R. Rep. 93-1463, 93rd Cong. 2d Sess. 8-9, reprinted in (1974) 
U.S. Code Cong. & Ad. News 6535, 6538.
---------------------------------------------------------------------------

absent a shoring of corrupt failure of the government to discharge 
its duty, the Court, in making its public interest finding, should * 
* * carefully consider the explanations of the government in the 
competitive impact statement and its response to comments in order 
to determine whether those explanations are reasonable under the 
circumstances.

United States v. Mid-America Dairyman. Inc., 1977-1 Trade Cas. para. 
61,508, at 71,980 (W.D. Mo. 1977).
    Accordingly, with respect to the adequacy of the relief secured by 
the decree a court may not ``engage in an unrestricted evaluation of 
what relief would best serve the public.'' United States v. BNS, Inc., 
858 F.2d 456, 462 (9th Cir. 1988), quoting United States v. Bechtel 
Corp., 648 F.2d 660, 666 (9th

[[Page 33408]]

Cir.) cert denied, 454 U.S. 1083 (1981); see also Microsoft, 56 F.3d at 
1460-62. Precedent requires that

the balancing of competing social and political interests affected 
by a proposed antitrust consent decree must be left, in the first 
instance, to the discretion of the Attorney General. The court's 
role in protecting the public interest is one of insuring that the 
government has not breached its duty to the public in consenting to 
the decree. The court is required to determine not whether a 
particular decree is the one that will best serve society, but 
whether the settlement is ``within the reaches of the public 
interest.'' More elaborate requirements might undermine the 
effectiveness of antitrust enforcement by consent decree.

United States v. Bechtel, 648 F.2d at 666 (citations omitted) (emphasis 
added.\15\
---------------------------------------------------------------------------

    \15\ See United States v. BNS, Inc. 858 F.2d at 463; United 
States v. National Broadcasting Co., 449 F. Supp. 1127, 1143 (C.D. 
Cal. 1978); United States v. Gillette Co., 406 F. Supp. at 716. See 
also United States v. American Cyanamid Co., 719 F.2d 558, 565 (2d 
Cir. 1983).
---------------------------------------------------------------------------

    The proposed Final Judgment, therefore, should not be reviewed 
under a standard of whether it is certain to eliminate every 
anticompetition effect of a particular practice or whether it mandates 
certainty of free competition in the future. Court approval of a final 
judgment requires a standard more flexible and less strict than the 
standard required for a finding of liability. ``[A] proposed decree 
must be approved even if it falls short of the remedy the court would 
impose on its own, as long as it falls within the range of 
acceptability or is `within the reaches of the public interest.' '' 
United States v. American Tel. & Tel. Co., 552 F. Supp. 131, 150 
(D.D.C. 1982) (citations omitted) (quoting United States v. Gillette 
Co., 406 F. Supp 713, 716 (D. Mass. 1975)), aff'd sub nom, Maryland v. 
United States, 460 U.S. 10Q1 (1983), United States v. Alcan Aluminum. 
Ltd., 605 F. Supp. 619, 622 (W.D. Ky. 1985).

VIII. Determinative Documents

    There are no determinative materials of documents within the 
meaning of the APPA that were considered by the United States in 
formatting the proposed Final Judgment.

    Dated: June 8, 1998.

        Respectfully submitted,
Jade Alice Eaton*
Andrew K. Rosa
Trial Attorneys.

U.S. Department of Justice, Antitrust Division, Transportation, Energy 
& Agriculture Section, 325 Seventh Street, N.W., Suite 500, Washington, 
DC 20004, (202) 307-6316.
    *Counsel of Record.

Certificate of Service

    I hereby certify that I have caused a copy of the foregoing 
Competitive Impact Statement to be served on counsel for defendant in 
this manner in the manner set forth below:
    By first class mail, postage prepaid:
Steven C. Sunshine,
Shearman & Sterling, 801 Pennsylvania Avenue, N.W., Washington, DC 
20004.
Jade Alice Eaton,
Antitrust Division, U.S. Department of Justice, 325 Seventh Street, 
N.W., Suite 500, Washington, DC 20530, (202) 307-6456, (202) 616-
2441(Fax).

[FR Doc. 98-16218 Filed 6-17-98; 8:45 am]
BILLING CODE 4410-11-M