President George W. Bush on Monday targeted additional funding for energy infrastructure and oversight activities in his $199.4 million budget request for the Federal Energy Regulatory Commission for fiscal 2004.

The proposed FERC budget, which seeks a 3.9% increase from $192 million in the current fiscal year, was part of the $2.23 trillion federal budget that Bush sent to Congress Monday. Of the $199.4 million requested for the agency, approximately $73.48 million would be designated for the Commission to process electric power cases, $71.89 million for natural gas and oil pipeline cases, and $54 million for hydropower.

Reflecting the priorities of Chairman Pat Wood, more than half of the agency’s proposed budget ($103.2 million) is expected to be earmarked for processing cases that are devoted to the development of new energy infrastructure. An estimated $31.3 million is to be set aside for FERC’s market oversight activities in fiscal 2004, up by more than $2 million over the current funding level and by $8 million since fiscal 2002.

The funding, if approved by Capitol Hill lawmakers, would allow FERC to maintain its current full-time employee level of 1,250 for fiscal 2004, with the bulk of the workers devoted to electric and pipeline cases. The federal budget for fiscal 2004 would take effect next Oct. 1.

“While much remains to be done, including identifying and remedying abuses by companies like Enron, the most pressing need is to restore confidence in energy markets so that necessary additions to infrastructure can be financed at reasonable prices,” according to the FERC budget request.

“We responded to allegations of market manipulation by Enron and others by undertaking a large-scale investigation, not only of Enron but also of all other market participants in the West. The investigation clearly showed ways in which Enron and others could and did attempt to manipulate the markets,” the Commission said, adding that it was continuing to probe specific company practices.

The Bush administration proposed a budget of $88.4 million for the Commodity Futures Trading Commission (CFTC) for fiscal 2004, up from the $79.9 million sought to fund the agency in the current fiscal year.

The CFTC, which regulates the U.S. futures and options markets, subpoenaed the trading records of a number of energy companies during 2002 as part of investigations it was conducting into irregular trading practices. According to the White House Office of Management and Budget (OMB), the agency opened more than 100 investigations in 2002 against suspected violators of commodity laws.

A CFTC spokesman, however, was unable to confirm the agency’s caseload was that high.

During 2002, the CFTC entered into settlements with: a former Avista power futures trader who was charged with manipulating electricity futures settlement prices on the New York Mercantile Exchange (Nymex) ; Dynegy Marketing and Trade and an affiliate to pay a $5 million fine to resolve charges they colluded to manipulate natural gas prices for more than two years; and two former Coastal Corp. futures traders who agreed to pay fines totaling $70,000 and were banned permanently from trading futures on Nymex for engaging in fraudulent conduct.

The CFTC also cooperated with federal prosecutors in an investigation that led to an ex-Enron trader, Timothy N. Belden, being charged last October with manipulating energy prices in California in 2000 and 2001 (See Daily GPI, Oct. 18, 2002).

And, no federal budget would be complete without some mention of the Arctic National Wildlife Refuge (ANWR). The fiscal 2004 budget request “assumes” a large lease sale will occur in ANWR in 2005, and will generate bonus bids of $2.4 billion.

Half of the funds would go to Alaska, while the other $1.2 billion would be dedicated to Department of Energy research and development projects on alternate energy sources, the budget said.

The Bush administration estimates that between 5.7 and 16 billion barrels of oil are recoverable from the 1002 area of ANWR, and that drilling would disturb about one-tenth of 1% of the 1002 land region.

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