FERC Monday asked Congress to approve a $210 million budget for the agency in fiscal year 2005 to help fund efforts to bolster the reliability of the electric transmission and natural gas pipeline networks.

The Federal Energy Regulatory Commission proposes to earmark 60% of its fiscal 2005 funding — an estimated $126.3 million — for programs aimed at building up the nation’s energy infrastructure, the agency said in its budget request submitted to Capitol Hill. The remainder of the funds would be spent on promoting competitive markets ($46.7 million) and on market oversight activities ($36.9 million), the agency said.

The Commission is one of the few federal agencies that funds itself through the recovery of charges and filing fees from the energy companies it regulates. Nevertheless, it still must receive congressional approval for its annual budget, which would got into effect next October.

“Confidence in our nation’s energy markets has been affected by the problems in western energy markets that occurred in 2000 and 2001, and, more recently, by high prices for natural gas and the Aug. 14, 2003 blackout experienced in large areas of the Midwest, the Northeast and Canada,” the Commission told congressional budget lawmakers.

“In the wake of the blackout, electric reliability is at the top of the Commission’s agenda for 2004,” FERC said. “While the Commission hopes Congress will pass reliability legislation early in 2004, [it] cannot wait to move forward on reliability issues. The Commission’s goal is to set up a viable mechanism for reliability standards by next summer.”

It already is “starting to work with industry and market participants on such issues as determining what types of reliability standards might be appropriate, what measures might be used for auditing, how training of control room operators might be improved, and how reliability might be better enforced,” FERC said.

With $5 million of additional funding that the agency received for the current fiscal year, Chairman Pat Wood plans to establish a new reliability division within the Commission, staffed with 30 engineers and other staff.

In addition, “a robust natural gas pipeline infrastructure is critical for the reliability of the nation’s energy supply and for competitive market development,” the agency noted. FERC “must respond quickly to the need to expand and construct pipelines and related facilities,” as well as instill rate policies that “give investors confidence that they will have an opportunity to recover their investments.”

Imported liquefied natural gas (LNG) will be critical to meet the “growing need” for natural gas as well, FERC said. It noted that the agency made significant headway on this front last year — authorizing the resumption of LNG imports at the Dominion Cove Point terminal in Maryland, and certificating the Hackberry LNG import terminal in Louisiana.

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