9342 Federal Register / Vol. 66, No. 26 / Wednesday, February 7, 2001 / Notices

the order terminates, and at other times

as the Commission may require.

The parties will also be subject to an

‘‘Order to Maintain Assets,’’ to be issued

by the Commission. Under the Order to

Maintain Assets, between the date the

Respondents sign the Agreement

Containing Consent Orders and the date

of divestiture of the applicable asset, the

Respondents must maintain the assets to

be divested in substantially the same

condition as existing on the date the

Respondents signed the Agreement

Containing Consent Orders; use their

best efforts to keep available the services

of current personnel relating to the

assets to be divested and to maintain the

relations and good will of those entities

which have business relationships with

the assets to be divested; and preserve

the assets to be divested intact as an

ongoing business. Under the Order to

Maintain Assets, the Respondents must

also provide the acquirers of the assets

to be divested an opportunity to transfer

employment relationships from the

Respondents to the acquirers. In

addition, the Order to Maintain Assets

imposes several obligations on the

Respondents which are also imposed by

he proposed Order and which are

mentioned earlier in this notice.

Further, Dominion Resources, which

already owns 16% of the Iroquois

pipeline, has been made a party to the

proposed Order for the purposes of

requiring it to provide the Commission

with advance written notification before

increasing its interest in the Iroquois

pipeline.

Finally, under the terms of the

proposed Order, in the event that El

Paso does not divest the assets required

to be divested under the terms and time

constraints of the proposed Order, the

Commission may appoint a trustee to

divest those assets, expeditiously, and at

no minimum price. The proposed Order

also authorizes the Commission to

appoint a Monitor Trustee to oversee the

Development Fund by ensuring that

those funds are used in a manner

consistent with the terms of the

proposed Order.

V. Opportunity for Public Comment

The proposed Order has been placed

on the public record for 30 days for

receipt of comments by interested

persons. Comments received during this

period will become part of the public

record. After 30 days, the Commission

will again review the proposed Order

and the comments received and will

decide whether it should withdraw from

the proposed Order or make it final. By

accepting the proposed Order subject to

final approval, the Commission

anticipates that the competitive

problems alleged in the Complaint will

be resolved. The purpose of this

analysis is to invite public comment on

the proposed Order, including the

proposed divestitures, to aid the

Commission in its determination of

whether to make the proposed Order

final. This Analysis is not intended to

constitute an official interpretation of

the proposed Order, nor is it intended

to modify the terms of the proposed

Order in any way.

By direction of the Commission.

Donald S. Clark,

Secretary.

[FR Doc. 01–3190 Filed 2–06–01; 8:45 am]

BILLING CODE 6750–01–M

FEDERAL TRADE COMMISSION

[File No. 001–0172]

Entergy Corporation, et al., Analysis to

Aid Public Comment

AGENCY: Federal Trade Commission

ACTION: Proposed Consent Agreement.

SUMMARY: The consent agreement in this

matter settles alleged violations of

federal law prohibiting unfair or

deceptive acts or practices or unfair

methods of competition. The attached

Analysis to Aid Public Comment

describes both the allegations in the

complaint that accompanies the consent

agreement and the terms of the consent

order—embodied in the consent

agreement—that would settle these

allegations.

DATES: Comments must be received on

or before March 2, 2001.

ADDRESSES: Comments should be

directed to: FTC/Office of the Secretary,

Room 159, 600 Pennsylvania Ave., NW.,

Washington, DC 20580.

FOR FURTHER INFORMATION CONTACT:

William Vigdor, Frank Lipson or Anne

Schenof, FTC/S–2105, 600 Pennsylvania

Ave., NW., Washington, DC 20580. (202)

326–3177, 326–2617 or 326–2031.

SUPPLEMENTARY INFORMATION: Pursuant

to section 6(f) of the Federal Trade

Commission Act, 38 Stat. 721, 15 U.S.C.

46 and § 2.34 of the Commission’s rules

of practice (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 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

January 31, 2001), on the World Wide

Web, at ‘‘http://www.ftc.gov/os/2001/

01/index.htm.’’ A paper copy can be

obtained from the FTC Public Reference

Room, Room H–130, 600 Pennsylvania

Avenue, NW., Washington, DC 20580,

either in person or by calling (202) 326–

3627.

Public comment is invited. Comments

should be directed to: FTC/Office of the

Secretary, Room 159, 600 Pennsylvania

Ave., NW., Washington, DC 20580. Two

paper copies of each comment should

be filed, and should be accompanied, if

possible, by a 31⁄2 inch diskette

containing an electronic copy of the

comment. Such comments or views will

be considered by the Commission and

will be available for inspection and

copying at its principal office in

accordance with Section 4.9(b)(6)(ii) of

the Commission’s rules of practice (16

CFR 4.9(b)(6)(ii)).

Analysis of the Complaint and Consent

Order To Aid Public Comment

I. Introduction

The Federal Trade Commission has

accepted for public comment an

Agreement Containing Consent Order

(‘‘Consent Agreement’’) with Entergy

Corporation and Entergy-Koch, LP

(‘‘EKLP’’), a limited partnership owned

equally by Entergy and Koch Industries,

Inc., and has issued a Complaint and the

Decision and Order (‘‘Order’’) contained

in the Consent Agreement. The Order

seeks to remedy the anticompetitive

effects of EKLP’s acquisition from Koch

of the Gulf South Pipeline Company, LP

(formerly the Koch Gateway Pipeline

Company and referred to herein as

‘‘Gulf South’’). As a result of this

acquisition, Entergy will own 50 percent

of the Gulf South pipeline, a major

natural gas pipeline serving Entergy’s

regulated utilities in Louisiana and

Mississippi. The Order requires Entergy

to adopt an open-solicitation process for

its purchase of natural gas and gas

transportation. Adoption of these

measures will avoid affiliate bias in

Entergy’s purchase of gas supplies and

the resulting higher energy prices.

II. Description of the Parties and the

Proposed Joint Venture

Entergy, a Delaware corporation, is

engaged in the generation, transmission,

and distribution of electricity. Entergy

provides retail electric service to

customers in portions of Arkansas,

Louisiana, Mississippi, and Texas.

Entergy also owns the local natural gas

distribution utility in New Orleans and

Baton Rouge, Louisiana. In 1999,

Federal Register / Vol. 66, No. 26 / Wednesday, February 7, 2001 / Notices 9343

Entergy had revenues of approximately

$8.77 billion and net income of

approximately $595 million.

Koch is a privately held corporation

headquartered in Wichita, Kansas.

Through its subsidiaries and affiliates,

Koch markets natural gas, natural gas

transportation, chemicals, petroleum

products, minerals, and financial

services. Koch conducts its natural gas

business through Koch Entergy Trading

and Gulf South. Koch Entergy Trading

markets natural gas, electric power, and

weather derivatives. Gulf South owns

and operates the Gulf South pipeline

(formerly known as the Koch Gateway

pipeline). The Gulf South pipeline

consists of about 10,000 miles of natural

gas pipeline serving parts of the states

of Texas, Louisiana, Mississippi,

Alabama and Florida.

On May 26, 2000, Entergy and Koch

entered into an agreement to form EKLP.

Pursuant to that agreement, EKLP will

acquire, among other things, Entergy

Power Marketing Corporation (Entergy’s

subsidiary that markets electricity and

gas in the United States) and Gulf South

and Koch Entergy Trading from Koch.

As a result of the joint venture

agreement, Entergy will own 50 percent

of Gulf South and Koch Entergy

Trading.

III. The Complaint

The Complaint alleges that

consummation of the joint venture

agreement would violate Section 5 of

the Federal Trade Commission Act, as

amended, 15 U.S.C. 45, and Section 7 of

the Clayton Act, as amended, 15 U.S.C.

18. The Complaint alleges two markets

in which the proposed joint venture is

likely to lessen competitive discipline

on prices substantially: the sale of

electricity to consumers in areas of

Louisiana and western Mississippi

where Entergy subsidiaries are the

regulated electric utilities (Count I); and

the distribution of natural gas to

consumers in New Orleans and Baton

Rouge, where Entergy subsidiaries are

the regulated natural gas distribution

utilities (Count II). The Complaint

alleges that prices in these relevant

markets are ‘‘likely to rise as a result of

Entergy passing on inflated costs for

natural gas transportation to consumers

and the difficulties that regulators will

have in reviewing and challenging

Entergy’s purchase of natural gas

transportation.’’

According to the Complaint, Entergy,

through its regulated subsidiaries, has

the exclusive right to sell retail

electricity in parts of Louisiana and

Mississippi. Entergy subsidiaries also

have the exclusive right to distribute

natural gas in New Orleans and Baton

Rouge, Louisiana. Entergy purchases

substantial quantities of natural gas

transportation for its regulated

subsidiaries.

Under the current regulatory

framework of the States of Louisiana

and Mississippi and the City of New

Orleans, Entergy is permitted, subject to

review, to recover 100 percent of the

cost of natural gas transportation

purchased for its natural gas and electric

utilities by passing on this cost directly

to consumers. The Complaint alleges

that, once Entergy shares in the profits

of Gulf South, it will have the incentive

and ability, and is therefore likely, to

pay higher prices for the transportation

of Gulf South, and purchase a level of

transportation service from Gulf South

above what is necessary for effective

operation of Entergy’s utilities.

The Complaint alleges that after EKLP

acquires the Gulf South pipeline it

would be difficult for state and local

regulators to determine whether Entergy

improperly incurred inflation costs of

natural gas transportation than before

the transaction. Entergy’s natural gas

transportation purchasing decisions

involve the consideration of multiple

factors; the process by which Entergy

purchases gas transportation is not

transparent; and existing market

benchmarks are inadequate to assist

regulators in determining whether the

cost was prudently incurred. Entergy’s

ownership of EKLP and the Gulf South

pipeline increases Entergy’s incentive to

evade regulation and therefore, it is

more likely that regulators will need to

address such evasion.

IV. Terms of the Order

The Order issued by the Commission

remedies the alleged anticompetitive

effects of the proposed joint venture by

establishing a transparent process that

will increase the potential for

competition and provide a benchmark

that will make it easier for regulators to

detect possible rate evasion. The Order

affects how Entergy purchases its gas

supply, whether it purchases pipeline

transportation to deliver natural gas to

facilities operated by its regulated

utilities or it purchases delivered

natural gas.

The Order recognizes Entergy’s

requirement to purchase a flexible,

reliable, and economical gas supply. For

this reason, this Order provisions are

tailored to reflect the duration of

Entergy’s contracts. Paragraph II. B. of

the Order applies to long-term (over

three months) and short-term purchases

(longer than one day but less than or

equal to three months) and requires

Entergy to prepare a written plan before

requesting proposals for gas supply.

This plan must include, among other

things, a statement explaining the goals

Entergy is attempting to achieve (e.g.,

reliable supply of gas at certain plants).

These planning documents will allow

state and local regulators to compare

actual purchases with Entergy’s

forecasted gas supply requirements.

The Order also requires Entergy to

post information about its gas supply

requirements on its website. The

information posted and the timing of the

post are based on the duration of the

contract terms and the pace of the

market activity. For long-term purchases

(Paragraph II.C.1.), Entergy must post a

request for proposal (‘‘RFP’’) where each

RFP must contain, among other things,

the criteria that suppliers must satisfy to

be eligible for consideration and the

types of services, the amount of gas, and

the duration of the contract. Entergy

must post this RFP at least 30 days

before any purchase under a contract

whose term is one year or more, and at

least 14 days in advance of any

purchase under a contract whose term is

between three months and one year.

These time frames provide suppliers

with adequate time to prepare their

bids, without causing unnecessary

delay. Further, the Order requires

Entergy to provide requests for

proposals to any potential supplier

upon its request, and to consider any

proposal for any potential supplier.

The process is similar for short-term

purchases (Paragraph II.C.2.). Entergy

must post this information at least 72

hours before considering any proposal

for a term of at least one month. As with

long-term purchases, the Order requires

EKLP to ensure that Gulf South posts

each announcement on its electronic

bulletin board before submitting a

proposal to Entergy, and requires

Entergy to consider all proposals from

any potential supplier. The order

requires Entergy to create a log for all

short-term purchases documenting the

date, time, seller, and terms of all offers

received, and indicating the selected

proposals(s).

For daily purchases, (Paragraph

II.C.3), the Order requires Entergy to

publish on its website its intention to

purchase gas supplies at various receipt

and delivery points. The information

contained in this notice is more limited

than the requests that Entergy must

publish for short-term and long-term

purchases. The Order requires Entergy

to provide potential suppliers, upon

request, with the specific terms and

conditions for which it seeks to

purchase gas supplies. Entergy must

maintain a log containing the same

information that is required for shortterm purchases. The Order does not

9344 Federal Register / Vol. 66, No. 26 / Wednesday, February 7, 2001 / Notices

1 If the respondents do not agree to such

modifications, the Commission may (1) initiate a

proceeding to reopen and modify the Order in

accordance with Rule 3.72(b), 16 CFR 3.72(b), or (2)

commence a new administrative proceeding by

issuing an administrative complaint in accordance

with Rule 3.11, 16 CFR 3.11. See 16 CFR 2.34(e)(2).

require Entergy to develop a planning

document for its daily purchases, which

is required for the other types of

purchases.

These procedures will create a

competitive, transparent process that

will make it easier for regulators to

detect whether Entergy purchased gas

supplies at inflated costs. The planning

document will provide regulators with

Entergy’s operational requirements for

gas and gas transportation. The opensolicitation process will create

competition to supply Entergy and

establish a market price for gas supplies.

Regulators will then be able to compare

Entergy’s operational requirements,

Entergy’s purchases and the market

prices to identify whether Entergy

purchased gas supplies from EKLP at

inflated prices or a level of service that

is above that necessary for effective

operation.

The Order also designates Stephen P.

Reynolds as Implementation Trustee.

Mr. Reynolds has the expertise to

determine the precise information that

should be included in an RFP or other

solicitation package, or information to

be contained in a gas purchasing

planning document. EKLP must bear all

of the trustee’s costs and expenses. The

Implementation Trustee will serve until

the earlier of one year or the date on

which he certifies to the Commission

that the parties have put in place

adequate procedures with the Order and

the Commission accepts such

certification.

V. Effective Date of Order and

Opportunity for Public Comments

The Commission issued the

Complaint and the Decision and Order,

and served them upon the respondents;

at the same time it accepted the Consent

Agreement for public comment. As a

result of this action, the Order has

already become effective. The

Commission, in August 1999, adopted

procedures to allow for immediate

effectiveness of an Order prior to a

public comment period. The

Commission announced that it

‘‘contemplates doing so only in

exceptional cases where, for example, it

believes that the allegedly unlawful

conduct to be prohibited threatens

substantial and imminent public harm.’’

65 FR 46267 (1999).

This case is an appropriate one in

which to issue a final order before

receiving public comment because it

preserves an effective remedy for the

Commission by subjecting the

respondents to civil penalties for failing

to comply with the Order. This ensures

that the safeguards embodied in the

Order will be implemented on schedule.

The Order has also been placed on the

public record for 30 days for receipt of

comments by interested persons, and

comments received during this period

will become part of the public record.

Thereafter, the Commission will review

the Order, and may determine, on the

basis of the comments or otherwise, that

the Order should be modified.1

The Commission anticipates that the

Order, as issued, will resolve the

competitive problems alleged in the

Complaint. The purpose of this analysis

is to invite public comment on the

Order to aid the Commission in

determing whether to modify the Order

in any respect. This analysis is not

intended to constitute an official

interpretation of the Order, nor is it

intended to modify the terms of the

Order in any way.

By direction of the Commission.

Donald S. Clark,

Secretary.

[FR Doc. 01–3191 Filed 2–6–01; 8:45 am]

BILLING CODE 6750–01–M

FEDERAL TRADE COMMISSION

[File No. 002 3015]

Indigo Investment Systems, Inc., et al.;

Analysis to Aid Public Comment

AGENCY: Federal Trade Commission.

ACTION: Proposed Consent Agreement.

SUMMARY: The consent agreement in this

matter settles alleged violations of

federal law prohibiting unfair or

deceptive acts or practices or unfair

methods of competition. The attached

Analysis to Aid Public Comment

describes both the allegations in the

draft complaint that accompanies the

consent agreement and the terms of the

consent order—embodied in the consent

agreement—that would settle these

allegations.

DATES: Comments must be received on

or before February 26, 2001.

ADDRESSES: Comments should be

directed to: FTC/Office of the Secretary,

Room 159, 600 Pennsylvania Ave., NW.,

Washington, DC 20580.

FOR FURTHER INFORMATION CONTACT:

Janet Evans, FTC/S–4002, 600

Pennsylvania Ave., NW., Washington,

DC 20580. (202) 326–2125.

SUPPLEMENTARY INFORMATION: Pursuant

to section 6(f) of the Federal Trade

Commission Act, 38 Stat. 721, 15 U.S.C.

46 and § 2.34 of the Commission’s rules

of practice (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 January 25, 2001), on

the World Wide Web, at ‘‘http://

www.ftc.gov/os/2001/01/index.htm.’’ A

paper copy can be obtained from the

FTC Public Reference Room, Room H–

130, 600 Pennsylvania Avenue, NW.,

Washington, DC 20580, either in person

or by calling (202) 326–3627.

Public comment is invited. Comments

should be directed to: FTC/Office of the

Secretary, Room 159, 600 Pennsylvania.

Ave., NW, Washington, DC 20580. Two

paper copies of each comment should

be filed, and should be accompanied, if

possible, by a 31⁄2 inch diskette

containing an electronic copy of the

comment. Such comments or views will

be considered by the Commission and

will be available for inspection and

copying at its principal office in

accordance with § 4.9(b)(6)(ii) of the

Commission’s rules of practice (16 CFR

4.9(b)(6)(ii)).

Analysis of Proposed Consent Order To

Aid Public Comment

The Federal Trade Commission has

accepted, subject to final approval, an

agreement containing a consent order

from Indigo Investment Systems, Inc., a

corporation, and Frank Alfonso, its CEO

(together, ‘‘respondents’’) settling

charges that they engaged in a deceptive

advertising campaign for Indigo, a stock

trading program.

The proposed consent order has been

placed on the public record for thirty

(30) days for receipt of comments by

interested persons. Comments received

during this period will become part of

the public record. After thirty (30) days,

the Commission will again review the

agreement and the comments received,

and will decide whether it should

withdraw from the agreement or make

final the agreement’s proposed order.

Respondents sold Indigo through ads

in various media, including investment

magazines, Internet banner ads, and

three websites: www.microstarreserach.com, www.msindigo.com, and

www.indigoinvestor.com. According to

the FTC complaint, respondents’