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FERC's Spitzer: Cease-and-Desist a Key Enforcement Tool

FERC Commissioner Marc Spitzer last Wednesday said he supported the move in Congress to give the agency cease-and-desist authority to intervene in natural gas and power markets to stop suspected misconduct and to freeze company assets.

In enforcement cases, "it's a means of preserving the rights of the plaintiff, or in this case the government," and to "ensure that assets are not dissipated," he said at an Energy Podium event sponsored by Platts in Washington, DC.

"There [are] disputes and disagreements about the degree and scope of cease-and-desist and that's up to Congress [to resolve]...It's not novel and it's consistent" with the existing authority of the Commodity Futures Trading Commission, Spitzer said.

"Even in the most aggressive proposals in Congress, regarding cease-and-desist, the due process rights of the respondents...will be respected," he told reporters.

The climate change bill (HR 2454) passed by the House in late June would give the Federal Energy Regulatory Commission the authority to issue cease-and-desist orders against companies and/or traders that "may be violating, may have violated or may be about to violate any provision" of the laws or regulations governing market behavior (see NGI, June 29). The broad energy bill voted out by the Senate Energy and Natural Resources Committee contains similar language (see NGI, June 22).

Spitzer said FERC is "willing to live with whatever Congress proposes" as far as backstop siting authority over transmission projects. He believes states should have the first crack at proposals for new high-voltage power lines, but when "there is some circumstance that creates a reliability issue or an economic issue that is serious, my personal view is there ought to be some FERC backstop authority and I think there's some sympathy for that in Congress."

The Senate energy bill would expand FERC's backstop authority by giving the agency the jurisdiction to site high-voltage transmission (345-kV or more) facilities when a state fails to act within one year from the filing of an applications, imposes conditions that would "unreasonably interfere" with a project or denies an application.

The Senate bill responds to a decision by the Fourth Circuit Court of Appeals issued in February that rejected FERC's interpretation that its backstop siting authority extended to cases where state regulators denied applications for electric transmission project applications.

"When I was on the Arizona commission, we never failed to site [a] power line," Spitzer said. Overall "states have done a good job siting" transmission facilities.

Spitzer also said he supports the use of natural gas to fuel large commercial vehicles and electricity to power family cars in an effort to reduce the nation's dependence on gasoline and other fuels.

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