FERC issued an order Friday giving itself more time to review the proposed $6.3 billion purchase of Energy Harbor by Vistra, saying it will now rule on the application by April 11, 2024 (EC23-74).

Commissioner James Danly said he would file a dissent on the order “tolling time for action” at a later date.

FERC issued a deficiency notice on the initial application in August.

The application had faced opposition from the Office of the Ohio Consumers’ Counsel, who argued it would impact the retail market in the state. PJM’s Independent Market Monitor and the U.S. Department of Justice urged FERC to ensure it did not lead to market power issues in the RTO. (See Vistra’s Deal for Energy Harbor Runs into Opposition at FERC.)

Vistra owns 9,200 MW of fossil fuel generation in PJM’s territory, including in Ohio and Pennsylvania, the two states where Energy Harbor’s 4,000 MW (largely three nuclear plants) are located.

In comments filed in August, the Justice Department said FERC should focus on the interaction of Vistra’s Richland plant, a 369-MW gas-fired combustion turbine in Ohio, with Energy Harbor’s three nuclear plants. The plant runs 10 to 15% of the time, and Vistra often offers it near the clearing price, it said. Combined with the nuclear assets, which run all the time and are price takers, the Richland plant gives Vistra the ability and incentive to withhold power to raise the prices that the much larger nuclear plants get, the department said.

Both DOJ and the Monitor have argued FERC must look at smaller geographic markets because the nuclear plants and some of Vistra’s existing generation are not able to sell to the entire PJM footprint because of transmission constraints.

Vistra has said that no local market power concerns exist because there are no frequently binding transmission constraints that would limit its ability to sell power from the plants far and wide in PJM.

DOJ wants FERC to use a supply curve analysis in its review of the application, which is something the department argued for when the commission issued a Notice of Inquiry on its merger reviews in 2016. That NOI was never acted upon by FERC, and Vistra argued it would be unfair and lead to regulatory uncertainty to change the rules for its specific merger case.

In comments filed earlier last week, the IMM said that FERC’s own deficiency notice recognized that the local market power issues “cannot be ignored.”

Vistra has proposed selling off the Richland plant and a much smaller Stryker plant (a 16-MW oil-fired plant) to ease market power concerns, but the IMM said last week that the divestitures — even to a firm that owns no capacity in PJM — would do little to quell them. The sales would cut market power in some local markets created by transmission constraints, but the combined firm would still fail the three-pivotal-supplier (TPS) test too often.

“But the reduction in the number of hours that Vistra fails the TPS test is not large enough to conclude that the proposed divestiture of the Richland and Stryker units would resolve the market power concerns,” the Monitor said. “Even with the divestiture, Vistra would have market power with respect to local constraints in the PJM market. Exercise of that market power to raise prices would raise energy market revenues for the Energy Harbor nuclear units.”

Vistra also argued that its ownership of the three nuclear plants will put them in a better financial position, ensuring their continued operation and the local jobs and tax benefits they bring. Ohio Senate Majority Leader Rob McColley (R) wrote FERC a letter early this month extolling those economic benefits.

“All of Ohio will benefit from the operations and preservation of these plants by a capable and responsible owner like Vistra, which successfully operates other electric generation plants, including nuclear, across Ohio and the country,” McColley wrote.