Curt Hebert, former chairman of FERC and now an executive with Entergy Corp., on Friday predicted that the Commission will extend price caps on wholesale power prices in California that are due to expire later this year in response to what he characterized as “political pressure.”
Hebert’s predecessor as FERC chairman, Pat Wood, along with the rest of the Commission, are now being urged by the California Independent System Operator (Cal-ISO) and California Gov. Gray Davis to extend the caps beyond their current expiration date.
Hebert, who serves as executive vice-president for external affairs at Entergy, on Friday prognosticated on what he thinks his former agency will do once Sept. 30 rolls around. “The jury’s still out on that, but I would guess that FERC probably extends that because of political pressure,” he said at an analyst meeting sponsored by the electric utility.
Meanwhile, Hebert offered his thoughts on how FERC should proceed with investigations of the country’s energy markets. “What I would hope is that they would continue any formal investigations that are worthy of continuing,” he said. “It would be my hope if there are informal investigations, where they’re trying to get more information, or adequate information, to come up with some rulemaking or other authority, it would be my hope that they would keep it silent until they’re at least in a situation or position to have a formal investigation,” he added.
“What you see regulators do, and what we see politicians do, is they like to come out sometimes and make a statement and it’s rather flamboyant and we see, sometimes, billions of dollars of market capital lost,” Hebert said. “And then they re-think it and then they say ‘You know, maybe that’s not how it is and maybe not all these are illegal or maybe they aren’t what they seemed at the time I said it,'” Hebert added. “But you know what? The investors don’t come back and renew that market cap. You lost it and it’s gone, so I think you’ve got to be careful.
“Our position is be reasonable, be thoughtful,” he said. “Ferret out the wrongdoers, but understand that this is a market that works.”
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