[Federal Register Volume 84, Number 190 (Tuesday, October 1, 2019)]
[Notices]
[Pages 52106-52108]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-21316]


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FEDERAL TRADE COMMISSION

[File No. 191 0068]


DTE Energy Company; Analysis of Agreement Containing Consent 
Orders To Aid Public Comment

AGENCY: Federal Trade Commission.

ACTION: Proposed consent agreement; request for comment.

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SUMMARY: The consent agreement in this matter settles alleged 
violations of federal law prohibiting unfair methods of competition. 
The attached Analysis of Agreement Containing Consent Orders to Aid 
Public Comment describes both the allegations in the complaint and the 
terms of the consent orders--embodied in the consent agreement--that 
would settle these allegations.

DATES: Comments must be received on or before October 31, 2019.

ADDRESSES: Interested parties may file comments online or on paper, by 
following the instructions in the Request for Comment part of the 
SUPPLEMENTARY INFORMATION section below. Write: ``DTE Energy Company; 
File No. 191 0068'' on your comment, and file your comment online at 
https://www.regulations.gov by following the instructions on the web-
based form. If you prefer to file your comment on paper, mail your 
comment to the following address: Federal Trade Commission, Office of 
the Secretary, 600 Pennsylvania Avenue NW, Suite CC-5610 (Annex D), 
Washington, DC 20580, or deliver your comment to the following address: 
Federal Trade Commission, Office of the Secretary, Constitution Center, 
400 7th Street SW, 5th Floor, Suite 5610 (Annex D), Washington, DC 
20024.

FOR FURTHER INFORMATION CONTACT: Michael Blaisdell (202-326-3220), 
Bureau of Competition, Federal Trade Commission, 600 Pennsylvania 
Avenue NW, Washington, DC 20580.

SUPPLEMENTARY INFORMATION: Pursuant to Section 6(f) of the Federal 
Trade Commission Act, 15 U.S.C. 46(f), and FTC Rule 2.34, 16 CFR 2.34, 
notice is hereby given that the above-captioned consent agreement 
containing a consent order to cease and desist, having been filed with 
and accepted, subject to final approval, by the Commission, has been 
placed on the public record for a period of thirty (30) days. The 
following Analysis to Aid Public Comment describes the terms of the 
consent agreement and the allegations in the complaint. An electronic 
copy of the full text of the consent agreement package can be obtained 
from the FTC Home Page (for September 13, 2019), on

[[Page 52107]]

the World Wide Web, at https://www.ftc.gov/news-events/commission-actions.
    You can file a comment online or on paper. For the Commission to 
consider your comment, we must receive it on or before October 31, 
2019. Write ``DTE Energy Company; File No. 191 0068'' on your comment. 
Your comment--including your name and your state--will be placed on the 
public record of this proceeding, including, to the extent practicable, 
on the https://www.regulations.gov website.
    Postal mail addressed to the Commission is subject to delay due to 
heightened security screening. As a result, we encourage you to submit 
your comments online through the https://www.regulations.gov website.
    If you prefer to file your comment on paper, write ``DTE Energy 
Company; File No. 191 0068'' on your comment and on the envelope, and 
mail your comment to the following address: Federal Trade Commission, 
Office of the Secretary, 600 Pennsylvania Avenue NW, Suite CC-5610 
(Annex D), Washington, DC 20580; or deliver your comment to the 
following address: Federal Trade Commission, Office of the Secretary, 
Constitution Center, 400 7th Street SW, 5th Floor, Suite 5610 (Annex 
D), Washington, DC 20024. If possible, submit your paper comment to the 
Commission by courier or overnight service.
    Because your comment will be placed on the publicly accessible 
website at https://www.regulations.gov, you are solely responsible for 
making sure that your comment does not include any sensitive or 
confidential information. In particular, your comment should not 
include any sensitive personal information, such as your or anyone 
else's Social Security number; date of birth; driver's license number 
or other state identification number, or foreign country equivalent; 
passport number; financial account number; or credit or debit card 
number. You are also solely responsible for making sure that your 
comment does not include any sensitive health information, such as 
medical records or other individually identifiable health information. 
In addition, your comment should not include any ``trade secret or any 
commercial or financial information which . . . is privileged or 
confidential''--as provided by Section 6(f) of the FTC Act, 15 U.S.C. 
46(f), and FTC Rule 4.10(a)(2), 16 CFR 4.10(a)(2)--including in 
particular competitively sensitive information such as costs, sales 
statistics, inventories, formulas, patterns, devices, manufacturing 
processes, or customer names.
    Comments containing material for which confidential treatment is 
requested must be filed in paper form, must be clearly labeled 
``Confidential,'' and must comply with FTC Rule 4.9(c). In particular, 
the written request for confidential treatment that accompanies the 
comment must include the factual and legal basis for the request, and 
must identify the specific portions of the comment to be withheld from 
the public record. See FTC Rule 4.9(c). Your comment will be kept 
confidential only if the General Counsel grants your request in 
accordance with the law and the public interest. Once your comment has 
been posted on the public FTC website--as legally required by FTC Rule 
4.9(b)--we cannot redact or remove your comment from the FTC website, 
unless you submit a confidentiality request that meets the requirements 
for such treatment under FTC Rule 4.9(c), and the General Counsel 
grants that request.
    Visit the FTC website at http://www.ftc.gov to read this Notice and 
the news release describing it. The FTC Act and other laws that the 
Commission administers permit the collection of public comments to 
consider and use in this proceeding, as appropriate. The Commission 
will consider all timely and responsive public comments that it 
receives on or before October 31, 2019. For information on the 
Commission's privacy policy, including routine uses permitted by the 
Privacy Act, see https://www.ftc.gov/site-information/privacy-policy.

Analysis of Agreement Containing Consent Orders To Aid Public Comment

I. Introduction

    The Federal Trade Commission (``Commission'') has accepted for 
public comment, subject to final approval, an Agreement Containing 
Consent Orders (``Consent Agreement'') from DTE Energy Company 
(``DTE''), Enbridge Inc. (``Enbridge''), and NEXUS Gas Transmission, 
LLC (``Nexus'') (collectively, the ``Respondents''). Nexus is a 50/50 
joint venture between DTE and Enbridge. The Consent Agreement would 
remedy the anticompetitive effects stemming from a January 2019 
transaction (the ``Transaction'') in which Nexus intends to purchase 
Generation Pipeline LLC (``Generation'') from a group of sellers 
including North Coast Gas Transmission LLC (``NCGT'').
    Generation's primary asset is a 23-mile intrastate natural gas 
pipeline serving the Toledo, Ohio area. NCGT also owns another natural 
gas transportation pipeline in Ohio (the ``North Coast System''), which 
includes a spur running slightly east of Toledo, and which Nexus is not 
acquiring. The Transaction's sale agreement prohibited NCGT from 
competing to provide natural gas pipeline transportation within a 
restricted area encompassing parts of Lucas, Ottawa, and Wood counties 
in Ohio (the ``Restricted Area'') for a period of three years post-
closing (the ``Non-Compete''). Under the terms of the proposed Consent 
Agreement, and to maintain competition in the affected market post-
merger, Respondents are required to strike the Non-Compete from the 
purchase agreement and are prohibited from entering similarly 
anticompetitive agreements with their pipeline competitors in this 
market.
    At the time of the Transaction, Generation and NCGT were two of a 
small number of natural gas pipeline transportation options capable of 
serving customers in the Restricted Area. The Commission's Complaint 
alleges that the Transaction violated Section 7 of the Clayton Act, as 
amended, 15 U.S.C. 18, and Section 5 of the Federal Trade Commission 
Act, as amended, 15 U.S.C. 45, by eliminating actual and potential 
competition between NCGT and any other pipeline competitor in a market 
no broader than the pipeline transportation of natural gas to Lucas, 
Ottawa, and Wood counties in Ohio.
    The Commission has placed the proposed Consent Agreement on the 
public record for 30 days to solicit comments from interested persons. 
Comments received during this period will become part of the public 
record. After 30 days, the Commission will again review the proposed 
Consent Agreement and any comments received, and will decide whether it 
should withdraw from the Consent Agreement, modify it, or make it 
final.

II. The Respondents

    Respondent DTE Energy Company is a corporation organized, existing, 
and doing business under, and by virtue of, the laws of the State of 
Michigan with its executive offices and principal place of business 
located at One Energy Plaza, Detroit, Michigan 48226.
    Respondent Enbridge Inc. is a corporation organized, existing, and 
doing business under, and by virtue of, the laws of Canada with its 
executive offices and principal place of business located at 200 Fifth 
Avenue Place, Calgary, Alberta, T2P 3L8.
    Respondent NEXUS Gas Transmission LLC is a limited liability 
company organized, existing, and doing business under, and by virtue 
of, the laws of the

[[Page 52108]]

State of Delaware with its executive offices and principal place of 
business located at 5400 Westheimer Court, Houston, Texas 77056. Nexus 
is a 50/50 joint venture between DTE and Enbridge.

III. Relevant Markets and Market Structure

    The relevant product market at issue is the pipeline transportation 
of natural gas. Even if pipeline transportation rates increased 
slightly, natural gas shippers would continue to use pipelines, as no 
economic or practical alternative exists. Other natural gas delivery 
methods (such as boat, rail, or truck) are far more costly, less 
reliable, and potentially more hazardous than pipeline transportation. 
Moreover, particularly given low natural gas prices, a small increase 
in natural gas pipeline transportation rates would not lead customers 
to switch to other (more costly) fuels.
    A relevant geographic market within which to analyze the effects of 
the Transaction is an area no broader than Lucas, Ottawa, and Wood 
counties in Ohio (the ``Relevant Area''), which contains the closest 
geographic overlaps between the Generation Pipeline and the North Coast 
Pipeline. Although pipeline options may vary by customer delivery 
location, any customer for whom the Generation Pipeline and the North 
Coast pipeline are both competitive options are located within the 
Relevant Area.
    Market concentration in this industry is location-specific and 
depends on the pipeline options available near a given delivery point. 
Many customers connect only to one pipeline and cannot economically 
connect to any other. For large industrial customers looking to 
establish a direct connection to a natural gas pipeline system, 
concentration is a factor of how many suppliers are close enough to 
connect economically, while also meeting the customer's volume and 
service requirements. The Commission's Complaint alleges that the 
Generation pipeline and the NCGT pipeline may be the best alternatives 
for a subset of large non-residential customers in the Toledo area who 
are located reasonably close to both pipelines.

IV. Effects of the Transaction

    The Commission's Complaint alleges that, absent the proposed 
Consent Agreement, the Transaction would result in competitive harm in 
the natural gas pipeline transportation market in the Relevant Area. By 
prohibiting NCGT from competing to provide natural gas transportation 
within the Restricted Area, the Non-Compete would harm customers who 
would otherwise benefit from competition from NCGT. The Non-Compete is 
not reasonably limited in scope to protect a legitimate business 
interest. In this instance, the provision does not protect any 
significant intellectual property, goodwill, or customer relationship 
necessary to protect Nexus' investment. A mere general desire to be 
free from competition following a transaction is not a legitimate 
business interest. Moreover, even if a legitimate interest existed, the 
geographic scope of the Non-Compete would be broader than reasonably 
necessary, because, in part, it prevents NCGT from competing for any 
opportunity in the restricted area, even for opportunities that were 
unforeseen at the time of the Transaction.

V. Entry Conditions

    Entry into the relevant market would not be timely, likely, or 
sufficient to deter or counteract the anticompetitive effects arising 
from the Merger. Entry into the pipeline transportation of natural gas 
is a complicated, expensive, and time-consuming endeavor. In addition 
to completing a lengthy regulatory review and approval process, an 
entrant would need to secure sufficient precedent agreements by 
shippers, obtain rights of way, and overcome environmental or landowner 
hurdles.

VI. The Proposed Consent Agreement

    The proposed consent order (``Order'') effectively resolves the 
competitive concerns raised by the Sale Agreement's Non-Compete. First, 
the Order requires the parties to execute a revised Sale Agreement that 
eliminates the Non-Compete and associated language.
    Next, Section II.B of the Order prohibits Nexus and its parents, 
DTE and Enbridge, (collectively ``Respondents''), from entering into, 
enforcing, or soliciting any written or oral agreement that restricts 
competition between one or more Respondents and a ``Pipeline 
Competitor'' to provide natural gas pipeline transportation to the 
Relevant Area, without prior Commission approval. The Order defines 
``Pipeline Competitor'' as a firm that owns, operates, or markets 
capacity on a natural gas pipeline. This definition would include NCGT 
and other pipeline companies, as well as a situation where a customer 
with long-term capacity rights might resell its capacity and 
effectively act as a competitor.
    In an industry where joint ventures and other competitor 
collaborations frequently occur, some arrangements that the Order might 
capture could advance legitimate purposes. The Order's prior approval 
provision gives Respondents the opportunity to advocate for these 
arrangements and the Commission to evaluate any attendant restrictions 
on a case-by-case basis.
    The Order also requires Respondents to provide prior notice of 
intent to acquire the North Coast System or any other natural gas 
pipeline in the Relevant Area. It also requires Respondents to file 
annual compliance reports with the Commission for 10 years following 
the Order's issuance.
    The sole purpose of this analysis is to facilitate public comment 
on the proposed Consent Agreement. This analysis does not constitute an 
official interpretation of the proposed Consent Agreement or modify its 
terms in any way.

    By direction of the Commission.
April J. Tabor,
Acting Secretary.
[FR Doc. 2019-21316 Filed 9-30-19; 8:45 am]
BILLING CODE 6750-01-P