As FERC Chair, Wood Says Oversight, Enforcement a Priority
Preparations quietly got underway last week at the Federal Energy Regulatory Commission for an orderly changing of the guard at the end of the month, as the White House named Commissioner Pat Wood III to succeed current Chairman Curt Hebert Jr., who is resigning to join New Orleans, LA-based Entergy Corp. as executive vice president of external affairs.
The White House announcement last Tuesday was anticlimactic, given that it has been rumored in the energy industry for months that Wood, once installed as commissioner, would replace Hebert as chairman. The rumors persistently dogged Hebert throughout his seven-month stint at the helm of the Commission, although he repeatedly dismissed them.
Wood, a Republican with close ties to President Bush, will take the helm of the Commission on Sept. 1. "I was hard at work planning ahead" when the White House called last Tuesday, said Wood, who added that he had been notified of the appointment the week prior and anticipated it.
As chairman, Wood said he plans to make market oversight and enforcement of the natural gas and electricity markets a key priority. In fact, he indicated the Commission may explore hiring corporate executives to help it more effectively monitor energy markets for evidence of price manipulation.
Wood, 39, stopped short of saying that previous Commissions were lax in their oversight of energy markets. "I'll hold [off] judgment on that," he told NGI.
The soon-to-be chairman faces a number of high-profile market manipulation cases as he takes over at the Commission, including allegations that major power suppliers overcharged California customers for power during the state's electricity crisis, and that El Paso Corp. merchant power affiliates engaged in illegal practices to drive up prices for natural gas delivered to southern California. Also pending at FERC are charges that El Paso Natural Gas tilted the scales so that its merchant power affiliates would beat out non-affiliates when bidding on capacity on its pipeline system.
Wood played a major role in getting the case against the El Paso pipeline re-opened this summer after the Commission had dismissed the affiliate-abuse allegations last March.
He declined last week to specifically lay out his agenda for natural gas and power as chairman. "I want to consult with my colleagues first about this. It will be a team effort, not just a Pat Wood effort," he said, adding that the Commission "will adopt a strategic plan" outlining its agenda at its first meeting in September.
Aside from greater emphasis on oversight/enforcement, Wood said that he doesn't anticipate that he will "vary broadly" from the priorities set by Hebert. "I think Curt has done a lot to set a good agenda" for the agency.
A former Texas regulator, Wood is considered one of the new kids on the block at the agency, having sat on the Commission for less than three months. He was confirmed by the Senate in late May.
Many in the energy industry still don't know what to make of Wood because he is so new to FERC. A few things have become clear about the man just from observing him at the regular Commission meetings: he likes to get into the nitty-gritty details of issues; he prefers to discuss the cases openly at the FERC meetings rather than behind closed doors, as has been the accepted way of past Commissions; and he doesn't rest on formality. He prefers to be called "Pat" rather than "Commissioner Wood" or "Chairman Wood."
Because his style is so different from his predecessors, the Commission meetings, which in the past have averaged about an hour, likely will be much longer.
Wood was appointed by then-Gov. George W. Bush in 1995 to the Texas Public Utility Commission, where he served as chairman and spearheaded the restructuring of the Lone Star State's electricity market. He also was a member of the Bush energy transition team. Wood and his wife, Kathleen, have two sons, ages 2 and 10 months, and now live in northern Arlington, VA.
Hebert will join Entergy on Sept. 1. As executive vice president of external affairs, he will be responsible for the company's system and federal governmental affairs, system regulatory affairs, communications and corporate contribution functions, according to Entergy. He will succeed Horace Webb, who will become president and chief executive of the Entergy Charitable Foundation.
Hebert will work out of Entergy's main office in New Orleans, said a spokesman, adding that the company's Washington, DC, office will report directly to him. His job will require him to travel "fairly often" to Washington, he noted.
Entergy is ranked among the top utility companies in the United States, with assets of $25.5 billion and revenues of $10 billion in 2000. It owns, manages and invests in 30,000 MW of power generation capacity in the U.S. and worldwide. Entergy serves as the utility for 2.6 million customers in parts of Arkansas, Louisiana, Mississippi and Texas.
Hebert, who has been on the Commission since 1997, was appointed chairman just days after President Bush assumed office last January. But he immediately faced rumors that the president intended to replace him later with Wood.
Any hope that Hebert had of staying on as FERC chairman seemed to have vanished when his long-time friend, Sen. Trent Lott (R-MS), lost his position as Senate Majority Leader in early June. Lott had been Hebert's biggest supporter on Capitol Hill and at the White House.
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