As industry replies to FERC’s data requests on the June pricespikes in the power market began to pour in yesterday, critics insome electricity circles said that the questions posed by theCommission were too little, too late to elicit any meaningfulinformation into the causes for the price run-up earlier thissummer in the Midwest.

The data requests, which were sent out by FERC in late August,”aren’t worth the paper they’re written on because all they ask foris pricing information. And while they’ll let you know what peoplepaid and sold things [power] for, they won’t tell you why anythinghappened,” said a utility industry observer, who requestedanonymity. “And it’s unclear to even pretty experienced analystshow you would take that information and go back [and determine]what happened.”

He further chided the Commission for limiting its inquiry aboutpotential market manipulation and wrongdoing to a single sentencein the data request. “This has been going on for two months andthey finally come out with a one-sentence question – if you knowanything [about wrongdoing in the market], please tell us. Itapproaches an embarrassment,” the utility source said. “If you’retrying to find out if there’s manipulation, I don’t know how youwould do it but presumably there’s things you could do besidesasking the question – ‘Does anyone know anything?’ Can you imagineif the attorney general of the United States or the FBI was doingan investigation and all they said was ‘Does anyone knowanything?'” The Commission declined to respond to the criticism.

Upon receiving authority from the Office of Management andBudget, FERC sent out the data requests to about 80 “utilities,power marketers and other entities” that traded electricity in theMidwest market during the week of June 22, when prices began toratchet up from an average of $30 per MWh to as high as $7,000 perMWh. Specifically, the questions focused on the amount of powerthat participants purchased and sold between June 22 and June 26 inboth the daily and hourly markets; whether they had transactionsinterrupted by transmission line relief (TLR) actions and/orgeneration emergencies, and, if so, the amount of capacityinterrupted, and the price they paid for any replacement capacity;and whether they knew of specific attempts by others to manipulatethe market during that timeframe. Industry responses, which werevoluntary, were due at FERC on Thursday. They were not available tothe public.

At a hearing last month on the price spikes, Roy Thilly, CEO ofWisconsin Public Power, urged the Commission to conduct a “detailedinvestigation,” and to get tough with abusers. “Frankly, a slap onthe wrist is more than worth it in this situation. If theCommission fails to get tough with abusers, violations will becomeprevalent.”

The data requests are part of an ongoing FERC investigation intothe circumstances that led to the power price spikes in June. Priorto this, its probe was limited to informal data collection andon-site visits. The Commission said the information it receivesfrom the data requests will be the basis for a report to beunveiled during hearings before the Senate Energy and NaturalResources Committee later this month.

John Anderson, executive director of the Electricity ConsumersResource Council (ELCON), was less critical of FERC and itsinvestigation. “Sure I would have liked to have seen a moreresponsive, more timely movement with more detail. At the sametime, FERC hasn’t had any experiences like this in the past withelectricity, and they are doing something.” All in all, he said ELCON, which represents large industrial electricity users, was”extremely pleased” with the Commission’s handling of theinvestigation, particularly with the fact that it has notoverreacted.

The Edison Electric Institute (EEI), too, gave the Commissionhigh marks for carrying out a “really careful and thoughtfulinvestigation,” but a number of its utility members have commentedthat “a lot of the data requested in this most recent [effort] hasalready been given to FERC people who did on-site investigations inthe first round,” said spokesman Jim Owen.

ELCON’s Anderson and others said they adamantly disagreed withCommissioner Vicky Bailey’s statement that FERC would not belooking for a “smoking gun” in its investigation. “Our very strongfeeling is that they should be looking for smoking guns. And wehope that the data request that they’ve sent out is precisely alongthese lines.”

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