This Note examines the potential application of the Sherman Antitrust Act to alleged market manipulations by wholesale electricity generators during the California electricity crisis. Viewed in light of the national movement toward electricity deregulation, this Note summarizes accusations and reports of possible market power abuse by generators operating in California. This Note then analyzes the application of the Sherman Act to those alleged abuses. It determines that section I of the Sherman Act provides appropriate remedies for past market power abuse and serves as a sufficient deterrent to avoid similar abuse in the future. Due to the particular nature of the California electricity market, however, three antitrust immunities would constrain application of the Sherman Act. The broadest sweeping of the three, the filed rate doctrine, would likely preclude all private civil section I actions against the wholesale electricity generators. While it appears the doctrine's particularly poor fit to the facts of the crisis militates against its application, courts will likely invoke the doctrine, immunizing wholesale electricity generators from section I and leaving enforcement responsibilities solely in the power of the Federal Energy Regulatory Commission. The final section of this Note assesses the abilities of FERC to provide effective enforcement mechanisms to remedy and deter market power abuse in electricity markets. Finding those mechanisms inadequate, this Note concludes by calling upon Congress to overrule the filed rate doctrine.
Robert B. Martin III,
Sherman Shorts Out: The Dimming of Antitrust Enforcement in the California Electricity Crisis,
55 Hastings L.J. 271
Available at: https://repository.uchastings.edu/hastings_law_journal/vol55/iss1/5