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Pa. ALJs Deny Motion to Strike Direct Energy Auction Proposal from FirstEnergy-Allegheny Merger Case

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September 30, 2010

Two Pennsylvania ALJs have denied West Penn Power and FirstEnergy Corp.'s joint motion in limine to exclude from the record in their merger proceeding before the PUC certain expert testimony filed on behalf of Direct Energy Services.

FirstEnergy and Allegheny sought to strike Direct's testimony proposing changes to the default service structure at the combined FirstEnergy and Allegheny Pennsylvania utilities as a condition of the merger.  In general terms, Direct proposed to remove the utilities from the default service role, and to auction customers to competitive suppliers (see full analysis in 8/18/10 issue).

FirstEnergy and Allegheny had argued that Direct's proposal is outside the scope of the merger proceeding and that the PUC does not have the authority to order the relief suggested by Direct Energy's witnesses in the context of the merger proceeding.

"It goes without saying that evidence is admissible into the record if it is relevant to the resolution of the issues raised in an action, and is not cumulative, unduly prejudicial, and confusing or would cause undue delay or waste time.  A motion in limine should only be granted where the evidence which the moving party seeks to exclude is clearly irrelevant.  Moreover, it is not appropriate to use a motion in limine as a thinly disguised motion for summary judgment," the ALJs noted.

"Although we do not believe that it is appropriate to revisit the wisdom of the Commission's approach to default service in the context of a merger proceeding, it does seem that the testimony offered by Direct Energy is relevant to the issue of whether the merger is 'likely to result in anticompetitive or discriminatory conduct . . . . which will prevent retail electricity customers in this Commonwealth from obtaining the benefits of a properly functioning and workable competitive retail electricity market," which is a standard to be considered in merger proceedings, the ALJs confirmed.

"We also observe, however, that the issues raised by the Joint Applicants [Allegheny-FirstEnergy] in their Motion are important ones.  Our ruling on the Motion in Limine should not be construed to accord any particular weight to the testimony offered by Direct Energy," the ALJs said.

The proceeding is Docket A-2010-2176520 et. al.

   
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