Feinstein Charges Undue Industry Influence on FERC

Sen. Dianne Feinstein (D-CA) has asked the Senate Committee on Governmental Affairs to investigate the possibility of an improper relationship between the energy industry and the Federal Energy Regulatory Commission based on an exchange between FERC Chairman Curtis Hebert and Enron Chairman Ken Lay as reported recently in The New York Times.

The Times last month quoted Hebert as saying Lay told him he would support him in his job at FERC if Hebert backed a national push for retail competition and a faster pace in opening up access to the electricity transmission grid to companies like Enron. Lay recalled a different version of the conversation, according to Enron spokesman Mark Palmer. "Hebert called us asking for support," Palmer said. Lay responded that the decision was up to the White House. Palmer said the two differed on the interpretation of FERC's jurisdiction over transmission access. Lay maintains FERC currently has the same authority to order non-discriminatory, open access transmission across the power grid that it has used to open the national natural gas transportation network. Hebert's position is that the authority over the transmission network needs to be authorized by Congress.

Feinstein labeled the exchange an example of industry influence which, she said, is behind FERC's refusal "to fulfill its legally mandated function under the Federal Power Act to restore just and reasonable rates" in California. Her remarks came in a letter to Sen. Joseph Lieberman (D-CT), who will be chair of the Governmental Affairs Committee when the Democrats take over the Senate early this month.

"FERC is a $175 million a year agency charged with regulating the energy industry, and it would be unconscionable if any of the nation's electricity traders or generators were in a position to be able to determine who chairs or becomes a member of the Commission," Feinstein said.

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