Sweeping revisions to Order 888 are needed before true wholesale competition can take place.
Richard Stavros is Fortnightly's Executive Editor.
There’s been a lot of talk in the industry about new super powers for market enforcement, conferred by Congress on the Federal Energy Regulatory Commission (FERC) in last year’s energy legislation.
Even FERC Chairman Joseph T. Kelliher, at several conferences, has waxed ecstatic about them, saying, in effect, that FERC is ready to go after the market manipulators wherever they are.
Certainly, the new powers appear impressive. The Energy Policy Act of 2005 (EPACT 2005) expands FERC’s civil and criminal penalties, makes market manipulation unlawful, and allows FERC to initiate investigations (public or private) on its own initiative or after third-party complaint, to name just a few items.
With powers like those, one might expect that FERC by now would have captured scores of energy criminals and masterminds—that the markets of the U.S. energy industry once again are safe for trading.
But this hasn’t been the case entirely. Many believe that FERC still labors at a disadvantage.
Like the kryptonite that rendered Superman powerless, some believe that lack of clarity in the 10-year old Order 888 has rendered FERC powerless to detect wrongdoing in markets governed by the pro forma Open Access Transmission Tariff (OATT).