Mergers by definition move those who make the decisions further away from those who feel the impact of such decisions. Currently there are over 200 investor-owned utilities in the U.S, many still headquartered near their customers. None has more than a 3 percent national market share. But many observers, including FERC Commissioner William Massey, expect that within a decade only a handful or so will remain. Such prognostications are already proving correct.
Consolidation is even more apparent when capacity is aggregated by holding companies.
In 1992, there were 70 electric holding companies owning 78 percent of the IOU-held generation capacity. By the end of 2000, the number of electric holding companies has dwindled to 53, the ten largest of which own fully 50 percent of the total IOU-owned capacity. To date FERC has taken a very lax attitude toward mergers. Indeed, from January 1998 through January 1999 it disapproved only one proposed merger. When Long Island Lighting Company proposed to merge with Brooklyn Union Gas, evidence showed that together they would control 47 percent of the aggregate natural gas pipeline capacity into Long Island.