Platts Energy Podium: U.S. FERC Commissioner Marc Spitzer sees need for added authority

Washington - July 15, 2009

The U.S. Federal Energy Regulatory Commission (FERC) could make good use of pending legislation that would give it cease-and-desist authority to quickly intervene in gas and power markets to stop suspected misconduct and to freeze company assets if necessary, FERC Commissioner Marc Spitzer said Wednesday at a Platts Energy Podium in Washington.

The climate-change bill recently passed by the U.S. House of Representatives would give FERC such authority, and an energy package endorsed by the Senate Energy and Natural Resources Committee in June contained similar language. The legislative initiative, backed by FERC from the beginning, has industry groups worried about the potentially sweeping authority the commission would obtain.

"I think that's important for balancing the interests of the ratepayers ... with the due process [rights] of the respondents," Spitzer said of the cease-and-desist authority. "And even in the most aggressive proposals in Congress, regarding cease-and-desist, the due process rights of the respondents ... will be respected." As for those worried about the extent of FERC's authority, the commissioner pointed out that a cease-and-desist order "is simply a legal mechanism to ensure that the assets are not dissipated."

Spitzer also addressed power-transmission issues pending before Congress and at the commission. Congress is considering giving FERC clearer backstop authority to promote the development of multi-state transmission lines, and "we're willing to live with whatever Congress proposes," the commissioner said. "I think the measures proposed in Congress reflect the need for more [energy] infrastructure."

States ought to have the first crack at proposals to build high-voltage power lines, but when "there is some circumstance that creates a reliability issue or an economic issue that is serious, my personal view is there ought to be some FERC backstop authority and I think there's some sympathy for that in Congress," he said.

Shifting gears a bit, Spitzer suggested that sound energy policy would promote the use of natural gas to fuel large commercial vehicles and electricity to power the family car. Shifting reliance from gasoline and diesel "would be a great benefit" to the automotive industry, especially when the country pulls out of the recession, the commissioner told the newsmaker event.

Spitzer's comments to the Platts Energy Podium event are available by podcast.