Republican members of the House Energy and Commerce Committee fought off Democratic efforts Wednesday to significantly expand FERC’s powers to punish “bad actors” who commit fraud and manipulation in the natural gas and electricity markets.

By 29 to 20, the panel shot down a broad amendment sponsored by Rep. John Dingell (D-MI) that, among other things, would have expressly banned fraudulent and manipulative practices in the sale and transmission of gas and power, required companies to keep records of all their sales and transmission of gas and power, and would have required publishers of energy price indexes to make available information on transactions and prices.

In defending his proposal, Dingell argued it would prevent the “joyful robbing of the citizenry” by giving FERC the tools to tackle “serious wrongdoing of every kind.” The veteran lawmaker offered his measure as a substitute to the existing electricity title in the House comprehensive energy legislation, which was in its second day of markup by the panel. The committee was expected to complete markup of the bill late Wednesday, a House spokesman said.

The panel also soundly defeated a follow-up proposal offered by Rep. Edward Markey (D-MA), which focused on the narrower issue of FERC’s fraud authority and the need to establish an electronic audit trail.

Committee Democrats, particularly those from California, complained that the GOP-crafted electricity title fell far short of giving the Federal Energy Regulatory Commission sufficient enforcement bite. They noted the current title banned only “round-trip” trading by energy companies, but neglected to address other types of questionable behavior — such as Ricocheting, Get Shorty and “churning.”

Democrat lawmakers are “absolutely right…we need to increase some enforcement areas” and go after the “bad actors,” said Rep. Joe Barton (R-TX), but he cautioned lawmakers not to “legislate by exception.”

“The state of California did it wrong” and now some lawmakers are trying to change federal laws, which would affect energy markets in all states, as a result, Barton said. “Let’s don’t overreact,” especially since the principal culprit, Enron Corp.,”for all intents and purposes is out of business.”

Rep. Henry Waxman (D-CA) countered that California’s bad restructuring rule and constrained energy infrastructure didn’t justify the questionable behavior of energy companies in the state and elsewhere in the West.

Rep. Ted Strickland (D-OH) said there seems to be a “tendency to want to blame the victim here.”

Barton argued that Dingell’s proposal “[was] not a substitute for a comprehensive electricity title” because it didn’t address critical reliability and transmission issues, as well as reform of the Public Utility Holding Company Act and the Public Utility Regulatory Policies Act (PURPA). “We need an electricity title [that is] based on market realities.”

Committee Chairman W.J. “Billy” Tauzin (R-LA) also opposed Dingell’s effort to strike the bill’s electricity title. He said the title gives FERC exactly what it asked for: greater civil and criminal penalty authority, stronger investigative tools and the authority to conduct more market discovery.

Tauzin flatly objected to Dingell’s proposal involving energy price indexes. “I don’t think FERC ought to have [the] authority to regulate publications” that compile energy indexes. He noted that the Republican-authored bill “carefully avoids that.”

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