In a daring move, a staff member of the Federal EnergyRegulatory Commission’s new office that monitors the energy marketshas accused the Commission of being powerless to pinpoint andcorrect abuses in the electricity industry due to an absence ofappropriate market data.

Via an internal memorandum on June 2, Ron Rattey, a staff memberin the fledgling Office of Markets, Tariffs and Rates (OMTR),assailed the Commission for failing to gather the necessary data toshield power market participants from market-power abuses.

FERC is “impotent in our ability to monitor, foster and ensurecompetitive electric power markets,” he boldly wrote in an e-mail,which was widely circulated among FERC staff. Rattey said theCommission was collecting a “bucket” of data from industry thatwasn’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 nearlyimpossible for the Commission to spot market abuses in thetransmission market. Daniel Larcamp, head of OMTR, countered thatthe concerns cited by Rattey were “legitimate,” but he said Ratteyshould have vented them through more appropriate channels.

Rattey allegedly sent the 30-page memo earlier this month byinternal e-mail to everyone at the Commission, including thesecurity staff. FERC sources said Rattey’s supervisor ordered himto retrieve it that same day, which he did from everyone who hadn’talready opened it.

Rattey’s defenders described the long-time FERC staffer asextremely knowledgeable on “these issues” and a “bulldog” forgetting things done. They said he tried to draw attention to theproblems through regular channels, but he was unsuccessful and sentthe memo out of frustration that FERC “just doesn’t have theintestinal fortitude or will to push this enough to get somethinguseful.”

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 meatlocker” in the Commission’s basement, joked the Commissioner aidewho read Rattey’s memo. He added that he didn’t agree with Rattey’s”impotent” remark, and was “shocked that it [a disagreement overdata collection] actually bubbled up in that way.”

The memo said FERC has been repeatedly rebuffed by variousindependent system operators (ISOs), regional transmissionorganizations (RTOs) and The North American Electric ReliabilityCouncil (NERC) in its attempt to obtain pricing and power tradinginformation, and each time the agency backed down. Many times theCommission has either been given unusable data or has been told thedata is proprietary.

Sources contend the type of transactional data FERC needs inorder to make the switch from a regulator of companies to a monitorof markets is not provided in the utilities’ traditional Form 1 andForm 2 submissions. So far, the Commission has not officiallyproposed any new forms requiring market participants to submit thenecessary data, sources said.

“Right now we’re still collecting the same stuff that we’vealways collected” from the power market, even though FERC’s role isundergoing a dramatic change, noted the aide to a Commissioner.”Our data needs…..are sort of undergoing an assessment. We’retrying 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 theCommission hasn’t made substantial changes to the type of marketdata it collects, he told NGI.

Part of the problem lies with the downsizing of the agency andshortage of staff, sources said, and the failure of those higher upto make it a priority. A change in information requirements likelywould require a FERC rule and a vote, as well as a favorable reviewby the White House Office of Management and Budget. The lattercould be particularly difficult to achieve during an election year.

Ellen Beswick, Susan Parker

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