Two Democratic senators have urged FERC to set up a consumer advocate position at the Commission to watch over the electric industry and take action when there is a possibility that wholesale market manipulation has resulted in unjust and unreasonable power prices.

Sen. Jeff Bingaman (D-NM), chairman of the Senate Energy and Natural Resources Committee, and committee member Sen. Ron Wyden (D-OR) said in a letter earlier this month to FERC Chairman Pat Wood that the Federal Energy Regulatory Commission (FERC) should create the new position because state regulators are ill-prepared to police independent power marketers. The senators warned that an increase in interstate power brokering by independent, unregulated marketers leaves consumers unprotected from market manipulation and price spikes.

“When wholesale power marketers raise their rates, consumer power prices go up with them,” Wyden said. “State public utility commissioners have no jurisdiction to find out what’s behind the wholesale price increase and whether retail customers are being charged reasonable rates. Consumers need better protection.”

For that reason, the senators are encouraging Wood to consider a federal advocate, among other possibilities, to look out for consumer interests. While state advocates can work on consumers’ behalf locally, a federal advocate could examine interstate commerce transactions as well, they said.

During the West Coast energy crisis, state regulators and consumer advocates had no jurisdiction to investigate allegations of price gouging by Enron Corp. and other power marketers, the senators told Wood. Enron also owns Portland General Electric (PGE), which obtained approval in September to raise consumer rates by 30%. PGE attributed most of the need for an increase to higher prices in the wholesale power market. However, because the Oregon Public Utility Commission has no jurisdiction over independent marketers or over wholesale interstate power sales, they had no way to confirm whether Enron’s higher wholesale prices were justified.

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