Statement by Senator Dianne Feinstein
- On a New GAO Report on FERC -
June 17, 2002

"A new report by the General Accounting Office (GAO) has concluded that the Federal Energy Regulatory Commission (FERC) does not have the necessary expertise and authority to effectively manage competitive energy markets.

This is precisely the reason FERC should retain the temporary energy cap that was put in place last year for the Western Energy Markets. This cap is now scheduled to expire September 30, and it is critical that it remain in place until there are proper mechanisms to ensure 'just and reasonable' electricity prices.

It was FERC's inability and unwillingness to regulate the California energy market in the first place that led to the severe energy crisis that lasted from May, 2000 to June, 2001.

We know FERC did not perform its statutory authority to regulate during that time period and now the GAO report says that FERC is not capable of executing its full regulatory authority.

While I have been supportive of recent efforts by FERC, under Commission Chairman Pat Wood, to stabilize energy prices, much more needs to be done. And, as the report indicates, even if FERC has the will, it remains unclear that the Commission has the necessary expertise and tools to do its job.

I am exploring legislation to provide FERC with the resources it needs to protect consumers and direct the Commission to ensure all electricity prices remain 'just and reasonable.' Until FERC can demonstrate that it is willing and capable to regulate energy markets, I will oppose additional movements toward market pricing that I believe will only harm consumers."