Staffer: FERC 'Impotent' to Detect Market Abuse
In a daring move, a staff member of the Federal Energy
Regulatory Commission's new office that monitors the energy markets
has accused the Commission of being powerless to pinpoint and
correct abuses in the electricity industry due to an absence of
appropriate market data.
Via an internal memorandum on June 2, Ron Rattey, a staff member
in the fledgling Office of Markets, Tariffs and Rates (OMTR),
assailed the Commission for failing to gather the necessary data to
shield power market participants from market-power abuses.
FERC is "impotent in our ability to monitor, foster and ensure
competitive electric power markets," he boldly wrote in an e-mail,
which was widely circulated among FERC staff. Rattey said the
Commission was collecting a "bucket" of data from industry that
wasn't very helpful in detecting market-power abuses.
He further wrote the Open Access Same-Time Information System
(OASIS) was plagued with severe problems, making it nearly
impossible for the Commission to spot market abuses in the
transmission market. Daniel Larcamp, head of OMTR, countered that
the concerns cited by Rattey were "legitimate," but he said Rattey
should have vented them through more appropriate channels.
Rattey allegedly sent the 30-page memo earlier this month by
internal e-mail to everyone at the Commission, including the
security staff. FERC sources said Rattey's supervisor ordered him
to retrieve it that same day, which he did from everyone who hadn't
already opened it.
Rattey's defenders described the long-time FERC staffer as
extremely knowledgeable on "these issues" and a "bulldog" for
getting things done. They said he tried to draw attention to the
problems through regular channels, but he was unsuccessful and sent
the memo out of frustration that FERC "just doesn't have the
intestinal fortitude or will to push this enough to get something
Rattey hasn't been dismissed because of the explosive memo.
"He's still here. But I think I did see him tied up in a meat
locker" in the Commission's basement, joked the Commissioner aide
who read Rattey's memo. He added that he didn't agree with Rattey's
"impotent" remark, and was "shocked that it [a disagreement over
data collection] actually bubbled up in that way."
The memo said FERC has been repeatedly rebuffed by various
independent system operators (ISOs), regional transmission
organizations (RTOs) and The North American Electric Reliability
Council (NERC) in its attempt to obtain pricing and power trading
information, and each time the agency backed down. Many times the
Commission has either been given unusable data or has been told the
data is proprietary.
Sources contend the type of transactional data FERC needs in
order to make the switch from a regulator of companies to a monitor
of markets is not provided in the utilities' traditional Form 1 and
Form 2 submissions. So far, the Commission has not officially
proposed any new forms requiring market participants to submit the
necessary data, sources said.
"Right now we're still collecting the same stuff that we've
always collected" from the power market, even though FERC's role is
undergoing a dramatic change, noted the aide to a Commissioner.
"Our data needs.....are sort of undergoing an assessment. We're
trying to figure out how best to carry out our mission."
Calling FERC "impotent" is "unfair" now, the aide said, but
"maybe in six or eight months it might be more fair" if the
Commission hasn't made substantial changes to the type of market
data it collects, he told NGI.
Part of the problem lies with the downsizing of the agency and
shortage of staff, sources said, and the failure of those higher up
to make it a priority. A change in information requirements likely
would require a FERC rule and a vote, as well as a favorable review
by the White House Office of Management and Budget. The latter
could be particularly difficult to achieve during an election year.
Ellen Beswick, Susan Parker