Critics Say FERC Isn't Aggressive, Favors Companies : LUSENET : Grassroots Information Coordination Center (GICC) : One Thread

Critics Say FERC Isn't Aggressive, Favors Companies (AP) -- Critics say the federal agency that oversees California's electricity market needs to add resources and become more aggressive in watching for energy price gouging, issuing subpoenas for company documents if necessary.

The Federal Energy Regulatory Commission has been accused of backing off investigations after energy generators have resisted, prompting some FERC officials to say their own system is flawed.

Former FERC engineer Judy Cardell said senior staff members stopped agency requests for data from companies at least three times.

"A number of people in FERC did not want to overburden the utilities or the people in the industry with these reports," Cardell told the San Jose Mercury News.

The FERC has a legal obligation to ensure "just and reasonable" prices, and is meant to operate as an oversight agency, similar to the federal Securities and Exchange Commission that oversees Wall Street.

The last time FERC subpoenaed data in a nonjudicial investigation was 1985. The SEC subpoenas so many documents from financial markets that no one tracks the number.

"I was basically told that it's a weapon that we keep in reserve, but that generally speaking we've got to deal with all these market participants on an ongoing basis," said William L. Massey, who become a commissioner in 1993. "We'd rather persuade them to give us this information."

While FERC's chairman Curtis Hebert Jr. insists the agency is doing all it can with what resources it has, former FERC chairman James Hoecker says the agency needs more power.

"It can't be in a situation where it is begging the industry for information," Hoecker said.

And FERC officials point out they only oversee wholesale energy prices, while state officials are responsible for the local utilities and other retailers selling power to customers.

Outside experts also say FERC needs more resources to do its job correctly.

"The FERC staff is very well-intentioned and they work hard. But I think they are understaffed in the way of economic analysis," said Paul Joscow, a Massachusetts Institute of Technology economics professor who is an expert in deregulation.

Over the past few months, FERC has ordered a dozen companies to justify their high prices or pay $124.5 million to California utilities for January and February. Williams Cos. of Tulsa, Okla., also settled for $8 million after being accused of shutting down power plants last spring to spike prices.

-- PHO (, June 05, 2001

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