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EPAct Transforming FERC Into Enforcer, Says Spitzer

FERC is being transformed by the 2005 federal Energy Policy Act (EPAct) to more of an enforcement agency rather than an accounting-focused government agency, according to Commissioner Marc Spitzer, who spoke Tuesday at the Western Power Supply Forum II in Burlingame, CA. This is a transition that began at the state regulatory commission level, from which Spitzer just emerged in Arizona to his role as a new federal regulator.

For the Federal Energy Regulatory Commission (FERC), the issues driving its greatly revised professional staff deal with enforcement -- "reliability, market manipulation prevention, and ensuring fair/open access to the transmission grid, along with policy/market monitoring," said Spitzer, a former head of the elected Arizona Corporation Commission (ACC) and before that, an Arizona state senator. "I don't believe it is going to be dominated anymore by the accounting issues of the past.

"That is very similar to the 'referee' role that is being adopted by state commissioners, and one that calls for a very different orientation [for commissioners and staff]."

This new role requires more than ever that the FERC commissioners and staff get around to the different regions and more closely understand and appreciate the differences among and between states, said Spitzer, a former tax attorney in Phoenix, who cited the real differences "culturally and politically" among three Southwest states often lumped together -- Arizona, Nevada and New Mexico.

Spitzer noted that he was expressing his own views and not those of the Commission and said FERC's evolving role calls for a lot more "judgment and discretion" on the federal commission's part. "I'm very confident about the quality and caliber of the people we have that they will ultimately do an excellent job.

"But the higher goal now is to send signals to the marketplace about conduct that will be permitted and that conduct that is simply unacceptable [under law and a consensus interpretation by regulators]."

Spitzer said he thinks there is a good working relationship among the FERC commissioners.

"The issue that has debate, discussion, dissent and divergence of views is on the Mobil-Sierra issue and the sanctity of contracts. A legal colleague of mine went to the Ukraine trying to help its post-Soviet Union government form, and he was struck by the fact that absent the rule of law to enforce contracts, you have chaos and anarchy, and you can't feed the people," he said. "The degree of differences among the FERC commissioners [on the contract sanctity issue] is not that great, and the degree of collegiality is very good."

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