The Department of Energy’s (DOE) inspector general has agreed to conduct a “preliminary inquiry” into allegations that FERC Chairman Pat Wood and Commissioner Nora M. Brownell gave advance notice to Wall Street analysts of how they intended to vote in pending high-profile cases involving manipulation of western energy markets, according to Sens. Joseph Lieberman (D-CT) and Maria Cantwell (D-WA).

The two senators, who called for the probe last week, said they were informed of the inquiry in a fax from the DOE’s IG office last Tuesday. “We are initiating a preliminary inquiry into this matter and will advise you upon the completion of our effort,” it read.

Lieberman, ranking Democrat on the Governmental Affairs Committee, and Cantwell sought the investigation in response to a March 28 Wall Street Journal article, which reported that Wood and Brownell “held a password-protected conference call with a select group of Wall Street analysts” on or about March 26.

“According to this [WSJ] report, the conference call included a discussion of several cases pending before the Commission involving the abrogation of long-term power supply contracts signed during the California energy crisis; the report further suggests that, in the course of the call, the Commissioners indicated how they expected to vote on these pending matters,” Lieberman and Cantwell wrote in their April 22 letter to DOE IG Gregory H. Friedman requesting a probe.

While FERC has confirmed that Wood and Brownell participated in a conference call with analysts on March 26, it has strongly denied allegations that the regulators’ comments amounted to prohibited off-the-record communications, or that they had “prejudged” the issues in the cases. According to FERC, the conference call was held at about 4:08 p.m. on March 26 — a few hours after the regular meeting during which the agency issued several major rulings related to energy supplier activities in western markets.

FERC said the conference call was not taped by the agency or any of the invited Wall Street analysts. The agency, however, has made a written summary of the call available on its web site [EL02-28].

Both Lieberman and Cantwell allege the conference call could be a violation of FERC rules that bar Commissioners from engaging in off-the-record communications about contested proceedings with anyone outside of the agency.

©Copyright 2003 Intelligence Press Inc. Allrights reserved. The preceding news report may not be republishedor redistributed, in whole or in part, in any form, without priorwritten consent of Intelligence Press, Inc.