“Keep the lights on and keep the people warm. Keep listening to the customer…I think when we have failed to do that on both the power and gas side, industry has suffered and the country has suffered,” departing Chairman Pat Wood said when asked for his advice to commissioners and staff of the Federal Energy Regulatory Commission and the energy industry.
As to whether he saw politics in his own future, Wood said that wasn’t anything he would consider for awhile. “If I come back up here [to Washington, DC], it will be if the voters send me. So I’m not going to say ‘no,’ and I’m not going to say ‘yes.’ I’m kind of a mission guy. If there’s a big ole’ problem, I’ll be up there to help solve it. But to just kind of show up on a ballot because I’ve got an ego to stroke, that’s…not my style. So if there [are] big problems somewhere in the future, I’ll be around.”
Wood said in an interview Wednesday with NGI that he regarded his single biggest achievement on the natural gas front to be revising the agency policies to “make this an LNG friendly country.”
“I have to admit that I didn’t come to town to roll back open access on anything,” he said. But in the landmark “Hackberry” ruling in late 2002, the Federal Energy Regulatory Commission did just that. It granted a significant concession to the industry by agreeing to lift the open-access regulations for new liquefied natural gas (LNG) terminals.
“It was certainly a concession to the reality that prices are going up and that we’re running out of cheap gas. I think it [Hackberry] was probably the prudent thing to do to give the different business plans an option in the LNG vaporization business to do something other than open-access policies that we’d adopted before.”
It was a “critical move along the way” during his administration, Wood said. “Probably looking back 10 years [from now], we’ll think that was a pretty good thing to do.”
Following a four-year stint as chairman and a commissioner at FERC, which was marked by a tumultuous period in the energy markets, Wood plans to leave Washington Friday for his native state of Texas. His successor, Commissioner Joseph T. Kelliher, officially takes over as head of FERC on Friday at midnight.
The 42-year-old chairman said he has few regrets on natural gas issues. “We left the gas quality, interchangeability issue out there in the end. I’d have to confess that wasn’t one I’d envisioned that we would get done before I was through here… I don’t have too much that I’m worried about” with respect to natural gas certificate and rate cases. Wood noted that the Commission shares his desire to expand gas infrastructure, and would pick up where he left off.
“I leave pretty much…with not much fear that anything that I’ve cared about is going to be either undone or ignored” in the natural gas and power markets.
Wood hopes that he will be remembered for “restoring the morale of the agency, giving a sense of mission and vigor to staff and to ourselves. We were pretty beat down after the California [energy crisis].” He noted that his term in office was anything but boring. It was packed with often chaotic events, including the Sept. 11 terrorists attacks in New York and Washington, the California energy crisis, the 2003 blackout in the Northeast, the collapse of Enron, rising natural gas prices and regional attacks on LNG projects.
During his term, the Commission has learned to “not just react, but to address issues so that some of these issues don’t happen again,” Wood said. The agency has assumed a “more nimble, flexible [and] modernized approach to oversight.”
Wood doesn’t consider himself a hard act to follow, and believes that Kelliher will take over the job with ease. “Quite frankly, I didn’t think he [Kelliher] needed a lot of advice from me.” He said that “the best tribute that [the Commission] could do is have it running so well that they forget how to spell my name in six months.”
As for the California energy market, Wood said “we’re not out of the woods yet,” but he conceded that the state was “certainly” in better shape energy-wise than it was in 2001. He believes, however, that this will be a “tight summer,” particularly in southern California. Wood said he has sent two additional FERC staffers to the California ISO to provide the agency with minute-to-minute communication on the supply-demand situation there.
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