At the urging of U.S. Rep. William J. Pascrell Jr. (D-NJ) and 22 other House lawmakers, the General Accounting Office (GAO) has agreed to carry out another review of the Federal Energy Regulatory Commission to assess how the agency’s deregulation activities and its failure to properly oversee energy companies have directly affected consumers.

The latest examination of the Commission comes on the heels of a recently released Senate-commissioned GAO report, which concluded that FERC lacked the “enforcement bite,” market-savvy employees, budget and monitoring presence to adequately deter anticompetitive behavior and other market violations of energy companies. The 100-page report, which had been requested by Sens. Joseph Lieberman (D-CT) and Jean Carnahan (D-MO), was issued in mid-June (See NGI, June 24).

Referring to FERC’s deregulation activities, “we want to know how did that impact consumers,” said Pascrell spokesman David Filippelli. The congressman’s staff met with GAO last Monday to clarify the objectives of the review, he told NGI, adding that the GAO said it will report on the status of the inquiry after the August congressional recess.

In a letter to the GAO in June, the lawmakers focused on the level of influence exerted by former energy giant, Enron Corp., at the Commission. Chairman Pat Wood “has acknowledged that Enron had 367 meetings with FERC staff between May 2000 and June 2001,” they told Comptroller General David M. Walker.

“This disturbing level of access to FERC’s leadership by a large energy company leads to our concern that deregulation was being pursued, and ushered through by the Commission, not as a means to lower energy prices for consumers but to raise them in the hope of generating profits for a select few…The FERC does important work that affects somewhere between 4-6% of the Gross Domestic Product (GDP). The Commission had made 139 regulatory decisions concerning Enron alone since 1995, and the effect these decisions have had on energy consumers must be closely examined,” the lawmakers noted. In addition, the House lawmakers asked the GAO to review FERC deregulation decisions that were “unrelated” to Enron.

In related action, the lawmakers have called on House Speaker Dennis Hastert (R-IL); Rep. W.J. “Billy” Tauzin (R-LA), chairman of the House Energy and Commerce Committee; and Rep. Dan Burton (R-IN), chairman of the Government Reform Committee, to open a full investigation into the relationship between Enron and FERC. The three House leaders have not responded yet, said Filippelli.

Moreover, Pascrell and House lawmakers repeatedly have urged Wood and Commissioner Nora M. Brownell to recuse themselves from FERC’s investigation into Enron, claiming that their ability to conduct an unbiased inquiry was compromised by former Enron Chairman Kenneth Lay’s reported role in their appointments to the agency. The latest request by the lawmakers was made on June 18, but neither Wood nor Brownell have replied to any of their letters.

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