Notice2021-21808
Petition of Respondent DTE Energy Company To Reopen and Modify Decision and Order
Primary source
Metadata and text below are from the Federal Register, a public-domain U.S. government work. Always verify the official published version before relying on it for any legal matter.
Published
October 6, 2021
Issuing agencies
Federal Trade Commission
Abstract
DTE Energy Company ("DTE" or "the company") has requested that the Federal Trade Commission ("FTC" or "Commission") reopen and modify the Commission's Decision and Order entered on November 21, 2019 (the "Order"), concerning the purchase of a natural gas pipeline and related assets. DTE requests that the Commission relieve the company of all continuing obligations under the Order because DTE has exited the relevant market addressed by the Order and its successor remains under the Order. Publication of the petition from DTE is not intended to affect the legal status of the petition or its final disposition.
Full Text
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<title>Federal Register, Volume 86 Issue 191 (Wednesday, October 6, 2021)</title>
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[Federal Register Volume 86, Number 191 (Wednesday, October 6, 2021)]
[Notices]
[Pages 55611-55614]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2021-21808]
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FEDERAL TRADE COMMISSION
[File No. 191 0068/Docket No. C-4691]
Petition of Respondent DTE Energy Company To Reopen and Modify
Decision and Order
AGENCY: Federal Trade Commission.
ACTION: Announcement of Petition; Request for Comment.
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SUMMARY: DTE Energy Company (``DTE'' or ``the company'') has requested
that the Federal Trade Commission (``FTC'' or ``Commission'') reopen
and modify the Commission's Decision and Order entered on November 21,
2019 (the ``Order''), concerning the purchase of a natural gas pipeline
and related assets. DTE requests that the Commission relieve the
company of all continuing obligations under the Order because DTE has
exited the relevant market addressed by the Order and its successor
remains under the Order. Publication of the petition from DTE is not
intended to affect the legal status of the petition or its final
disposition.
DATES: Comments must be received on or before November 5, 2021.
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. Please write: ``DTE Petition
to Reopen and Modify; Docket No. C-4691'' on your comment, and file
your comment online at <a href="http://www.regulations.gov">www.regulations.gov</a> by following the
instructions on the web-based form. If you prefer to file your comment
on paper, please 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: Aylin M. Skroejer (202-326-2459),
Bureau of Competition, Federal Trade Commission, 600 Pennsylvania
Avenue NW, Washington, DC 20580.
SUPPLEMENTARY INFORMATION: Pursuant to Section 6(g) of the Federal
Trade
[[Page 55612]]
Commission Act, 15 U.S.C. 46(g), and FTC Rule 2.51, 16 CFR 2.51, notice
is hereby given that the above-captioned petition has been filed with
the Secretary of the Commission and is being placed on the public
record for a period of thirty (30) days. After the period for public
comments has expired and no later than one hundred and twenty (120)
days after the date of the filing of the request, the Commission shall
determine whether to reopen the proceeding and modify the Order as
requested. In making its determination, the Commission will consider,
among other information, all timely and responsive comments submitted
in connection with this notice.
The full text of petition is provided below. An electronic copy of
the full text of the petition and the exhibits attached to it can be
obtained from the FTC website at this web address: <a href="https://www.ftc.gov/enforcement/cases-proceedings/191-0068/dte-energy-company-matter">https://www.ftc.gov/enforcement/cases-proceedings/191-0068/dte-energy-company-matter</a>.
You can file a comment online or on paper. For the Commission to
consider your comment, we must receive it on or before November 5,
2021. Write ``DTE Petition to Reopen and Modify; Docket No. C-4691'' 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 <a href="http://www.regulations.gov">www.regulations.gov</a> website.
Due to protective actions in response to the COVID-19 pandemic and
the agency's heightened security screening, postal mail addressed to
the Commission will be subject to delay. We strongly encourage you to
submit your comments online through the <a href="http://www.regulations.gov">www.regulations.gov</a> website.
If you prefer to file your comment on paper, write ``DTE Petition
to Reopen and Modify; Docket No. C-4691'' 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 <a href="http://www.regulations.gov">www.regulations.gov</a>, 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 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 <a href="http://www.regulations.gov">www.regulations.gov</a>--as legally required by FTC Rule
4.9(b)--we cannot redact or remove your comment from that 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 <a href="http://www.ftc.gov">http://www.ftc.gov</a> to read this document
and the news release describing this matter. 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 November 5, 2021. For information on the
Commission's privacy policy, including routine uses permitted by the
Privacy Act, see <a href="https://www.ftc.gov/site-information/privacy-policy">https://www.ftc.gov/site-information/privacy-policy</a>.
Authority: 15 U.S.C. 46, 5 U.S.C. 552.
April J. Tabor,
Secretary.
Text of Petition of Respondent DTE Energy Company To Reopen and Modify
Decision and Order
Pursuant to Section 5(b) of the Federal Trade Commission Act, 15
U.S.C. 45(b), and Section 2.51 of the Federal Trade Commission Rules of
Practice, 16 CFR 2.51, Respondent DTE Energy Company (``DTE'')
respectfully requests that the Commission reopen and modify the
Commission's Decision and Order entered on November 21, 2019, in Docket
No. C-4691 (the ``Order'') (attached as Exhibit 1). Specifically,
because DTE has exited the relevant market addressed by the Order and
because DTE's successor remains under the Order, DTE seeks to vacate
the Order as it applies to DTE or otherwise to relieve DTE of any
continuing obligations under the Order.
The Commission entered the Order to address the alleged
anticompetitive effect from the acquisition of Generation Pipeline LLC
(``Generation'') by NEXUS Gas Transmission, LLC (``NEXUS''), at the
time, a 50/50 joint venture between DTE and Enbridge Inc. Under the
Order, Respondents NEXUS, DTE, and Enbridge were required, among other
things, to remove a non-compete provision in the Purchase and Sale
Agreement governing NEXUS's acquisition of Generation. At all times
since the entry of the Order, DTE has complied with the Order in all
respects.
In November 2020, DTE notified the Commission that it intended to
spin off its DTE Midstream business, which included DTE's non-utility
natural gas pipeline, storage, and gathering business, to a separate
corporate entity now known as DT Midstream, Inc. (the ``Spin-off'). The
Spin-off was completed on July 1, 2021. As a result, DTE no longer
holds, directly or indirectly, an interest in NEXUS, Generation, or any
other natural gas pipeline, storage, or gathering assets or business in
the Relevant Area.\1\ DT Midstream has succeeded to DTE's obligations
under the Order, while NEXUS and Enbridge remain Respondents under the
Order. Those three entities are the appropriate Respondents under the
Order.
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\1\ Capitalized terms not otherwise defined herein have the
meanings ascribed to them in the Order.
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In light of these changed conditions of fact, DTE hereby petitions
the Commission to reopen and modify the Order to relieve DTE of all
continuing obligations under the Order. Such relief is in the public
interest.
[[Page 55613]]
I. Background
A. Initial Transaction
The acquisition of Generation by NEXUS was subject to review under
the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended,
15 U.S.C. 18a (the ``HSR Act''). In the course of the HSR Act review,
Commission staff raised concerns regarding the non-compete provision in
the Purchase and Sale Agreement, which would have prevented North Coast
Gas Transmission LLC, the previous owner of Generation, from competing
to provide natural gas transportation within a restricted area
encompassing parts of Lucas, Ottawa, and Wood counties in Ohio for a
period of three years. As a means of resolving such concerns, DTE and
the other Respondents executed an agreement containing the Order in
August 2019. On September 13, 2019, the Commission accepted the
agreement containing the Order and published it for public comment.
B. The Order
On November 21, 2019, the Commission, pursuant to procedures
described in Section 2.34 of its Rules, 16 CFR 2.34, entered the Order.
To address the concern that the non-compete provision would result in
harm to competition in the natural gas pipeline transportation market
in the Relevant Area (i.e., Lucas, Ottawa, and Wood counties in
northwest Ohio), Paragraph II.A of the Order required the removal of
the non-compete provision from the Purchase and Sale Agreement. On
September 13, 2019, prior to the closing of the Generation acquisition,
DTE and the other parties to the transaction amended the Purchase and
Sale Agreement to eliminate the non-compete provision.
Other provisions of the Order impose certain prior approval,
notification, and reporting requirements on DTE and the other
Respondents, including the requirement to obtain prior Commission
approval before entering certain agreements restricting competition for
natural gas pipeline transportation in the Relevant Area (] II.B), to
provide prior notice before acquiring an interest in any natural gas
transportation pipeline in the Relevant Area (] III), to report
annually on compliance (] IV), and to notify the Commission regarding
changes in any Respondent that may affect compliance (] V).
C. DTE's Compliance With the Order
At all times since the entry of the Order, DTE has been in
compliance with the Order. DTE filed its first annual compliance report
in November 2020. In response, Commission staff issued a letter stating
that no compliance action is necessary. In addition, DTE previously had
filed several initial and interim compliance reports, including initial
compliance reports on October 15, 2019 and November 13, 2019, each
under Paragraph 7 of the agreement containing the Order, and an interim
compliance report on December 20, 2019, under Paragraph IV.A.I of the
Order.
D. DTE's Spin-Off Transaction
First publicly announced in October 2020, the Spin-off provides
benefits to both DTE and DT Midstream, as well as each company's
employees and shareholders. See October 27, 2020 DTE Press Release
(attached as Exhibit 2). Among other things, the Spin-off
``[t]ransforms DTE [ ] into a high growth, predominately pure-play,
regulated Michigan-based utility'' and ``[p]ositions [DT] Midstream as
a premier independent, natural gas midstream company with assets in
premium basins connected to major demand markets.'' Id. The Spin-off
will ``[e]nable[ ] each business to pursue separate and distinct
strategies led by proven boards and management teams who have skillsets
and experience directly linked to each company's unique strategic and
financial objectives.'' Id.
The Spin-off was completed on July 1, 2021. On that day, DT
Midstream, which formerly included DTE's non-utility natural gas
pipeline, storage, and gathering business, became a publicly traded,
standalone company. See July 1, 2021 DTE Press Release (attached as
Exhibit 3). DT Midstream common stock trades on the New York Stock
Exchange under the symbol DTM. Although DTE and DT Midstream have one
common board member, this complies with Clayton Act Section 8. Under
the Spin-off, DTE's SO-percent ownership interest in NEXUS was
transferred to DT Midstream. See Declaration of JoAnn Chavez of DTE
Energy Co. (attached as Exhibit 4), at 4. In addition, DT Midstream has
certified to the Commission that it has succeeded to DTE's obligations
under the Order and will comply therewith. See Letter from Wendy Ellis
of DT Midstream (attached as Exhibit 5).
The Spin-off thus leaves DTE with:
(1) No interest (direct or indirect) in NEXUS;
(2) no interest (direct or indirect) in Generation; and
(3) no interest (direct or indirect) in any other natural gas
pipeline, storage, or gathering assets or business in the Relevant
Area.
DTE has no plans or present intention to acquire any direct or
indirect interest in DT Midstream, NEXUS, or Generation, or otherwise
to enter the market for natural gas pipeline ransportation in the
Relevant Area. See Declaration of JoAnn Ch[aacute]vez of DTE Energy
Co., at ] 6.
II. Changed Conditions of Fact and the Public Interest Require
Modification of the Order To Remove DTE as a Respondent
A. Changed Conditions of Fact
Section 5(b) of the FTC Act, 15 U.S.C. 45(b), and Section 2.51(b)
of the Commission's Rules of Practice, 16 CFR 2.51(b), provide that the
Commission may reopen and modify an order if the respondent makes a
satisfactory showing that changed conditions of law or fact require the
order to be altered, modified, or set aside, or that the public
interest so requires. The Commission has stated that ``[a] satisfactory
showing sufficient to require reopening is made when a request
identifies significant changes in circumstances and shows that the
changes eliminate the need for the order or make continued application
of it inequitable or harmful to competition.'' Eli Lilly & Co., Dkt.
No. C-3594, Order Reopening and Setting Aside Order, at 2 (May 13,
1999). Further, if the Commission determines that the respondent has
made the necessary showing, the Commission must reopen the order to
consider whether modification is required and, if so, the nature and
extent of the modification. See Stop and Shop Cos., Inc., Dkt. No. C-
3649, Order Reopening and Modifying Order, at 5 (June 20, 1997).
As the Commission has determined in numerous cases, the exit of a
respondent from the relevant market eliminates the continuing need for
the Order's remaining requirements to apply to that respondent and thus
is a changed circumstance sufficient to support the setting aside of
the Order as to the respondent. See, e.g., AEA Investors 2006 Fund
L.P., Dkt. No. C-4297, Order Reopening and Modifying Final Order (Apr.
30, 2013) (order set aside for respondent that no longer held interest
in businesses covered by the order); Duke Energy Corp., Dkt. No. C-
3932, Order Reopening and Modifying Order (Sept. 26, 2007) (order set
aside for respondent that had spun off midstream natural gas business
covered by the order); Koninklijke Ahold, NV., Dkt. No. C-4027, Order
Reopening and Modifying Order (July 10, 2007) (order set aside for
respondent that no longer operated supermarkets in relevant areas
[[Page 55614]]
covered by the order) and Order Reopening and Modifying Order (July 21,
2006) (same); Entergy Corp., Dkt. No. C-3998, Order Reopening and
Setting Aside Order (July 1, 2005) (order set aside for respondent that
had sold the business covered by the order); Union Carbide Corp., 108
F.T.C. 184 (1986) (order set aside for respondent that had exited
business covered by the order).
DTE's Spin-off of DT Midstream constitutes a changed condition of
fact that justifies the Commission to modify the Order to relieve DTE
of its obligations under the Order, because the Spin-off leaves DTE
with no direct or indirect interest in any natural gas pipeline,
storage, or gathering assets or business in the Relevant Area, which
was not the case at the time the Commission issued the Order. This
change eliminates the basis for the Commission's concern with respect
to DTE's presence in natural gas pipeline transportation in the
Relevant Area.
In particular, the Order provision requiring prior notice of any
DTE acquisition of an interest in a natural gas transportation pipeline
in the Relevant Area is no longer necessary. DTE no longer has an
ownership interest in either NEXUS or DT Midstream. As a result, DTE no
longer competes to provide natural gas transportation in the Relevant
Area. If DTE were to enter that market, such entry by DTE would
introduce new competition. Rather than create a need for coverage under
the Order, such entry would be procompetitive. In contrast, DT
Midstream, which does compete to provide natural gas transportation in
the Relevant Area, will continue to be subject to the Order, including
this prior notice provision.
Similarly, the Order provision requiring DTE to obtain prior
Commission approval before entering agreements concerning natural gas
pipeline transportation in the Relevant Area is no longer necessary.
The purpose of that provision is to provide the Commission with an
opportunity to review any potentially anticompetitive agreements
``between one or more Respondents and a Pipeline Competitor to provide
natural gas transportation in the Relevant Area.'' Order II.B. As a
result of the Spin-off, DTE no longer provides natural gas
transportation in the Relevant Area. Because DTE is no longer in a
horizontal competitive relationship with any Pipeline Competitor in the
Relevant Area, there is no longer a need for the Commission to review
any agreement DTE may seek to enter with such a firm. In contrast, DT
Midstream, which does provide natural gas transportation in the
Relevant Area, will continue to be subject to the Order, including this
prior approval provision.
Consistent with longstanding FTC precedent, changed conditions of
fact warrant the removal of DTE from the Order.
B. Public Interest
Because changed circumstances warrant reopening and modification
here, the Commission need not consider whether removing DTE from the
Order would serve the public interest. See, e.g., Duke Energy Corp.,
Order Reopening and Modifying Order, at 3 (``In this instance, however,
we do not need to assess the sufficiency of Petitioners' public
interest showing because Petitioners have made the requisite
satisfactory showing that changed conditions of fact require the Order
to be reopened and set aside as to Duke Energy.''); Entergy Corp.,
Order Reopening and Setting Aside Order, at 3 (same). However, should
the Commission deem it necessary to assess the public interest in
setting aside the Order as to DTE, such modification would serve the
public interest.
DTE meets the public interest requirement of Section 2.51(b)
because, among other reasons, ``the order in whole or part is no longer
needed.'' Requests to Reopen, 65 FR 50,636, 50,637 (Aug. 21, 2000)
(amending 16 CFR 2.51(b)). As a result of the Spin-off, DTE no longer
has any natural gas pipeline transportation assets or business in the
Relevant Area. Requiring DTE's continued compliance with the Order's
prior approval, notice, and reporting provisions therefore contributes
nothing to the Commission's interest in protecting competition and is
not needed to protect the public interest.
Further, setting aside the Order as to DTE would eliminate
unnecessary costs and burdens to DTE and the Commission during the
remainder of the term of the Order--another eight years (through
November 21, 2029). At the same time, because DT Midstream has
certified to the Commission that it has succeeded to DTE's obligations
under the Order and will comply with it, removing DTE from the Order
would be the ``more effective or efficient way of achieving the
purposes of the Order.'' Id. Therefore, the public interest requires
the setting aside of the Order as to DTE.
III. Conclusion
For these reasons, Respondent DTE respectfully requests that the
Commission reopen and vacate the Order as it applies to DTE, or to
otherwise modify the Order to relieve DTE of any continuing obligations
thereunder. Such a modification is justified by changed conditions of
fact, and is consistent with the public interest and the underlying
purposes of the Order. The attached Declaration and other accompanying
exhibits set forth and support the specific facts described herein and
demonstrate why the requested modification of the Order is appropriate.
Dated: September 21, 2021
Respectfully submitted,
s/Mike Cowie
Mike Cowie, Greg Luib, Dechert LLP, 1900 K Street NW, Washington, DC
20008, Attorneys for Respondent DTE Energy Company.
[FR Doc. 2021-21808 Filed 10-5-21; 8:45 am]
BILLING CODE 6750-01-P
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This is legal information, not legal advice. Laws vary by jurisdiction and change frequently. Always verify current law with official sources and consult a licensed attorney in your jurisdiction for advice on your specific situation.