Senator Feinstein Introduces Legislation to Give Federal Regulators New Authority to Police Competitive Energy Markets

Senator Feinstein Introduces Legislation to Give Federal Regulators
New Authority to Police Competitive Energy Markets
July 10, 2002

Washington, DC - U.S. Senator Dianne Feinstein (D-Calif.) introduced legislation today to provide the Federal Energy Regulatory Commission (FERC) with new authority to police competitive energy markets, including the ability to impose meaningful fines and criminal penalties when companies violate the law and cheat consumers.

"A report by the General Accounting Office (GAO) last month concluded that FERC does not have the necessary legal authority to police competitive energy markets," Senator Feinstein said. "This legislation is designed to bolster that authority and allow FERC to levy penalties that will hold market manipulators accountable for violations of the law."

"The efforts by Enron and other energy companies to take advantage of a lack of oversight authority and bilk Californians out of billions of dollars demonstrates the critical importance of having adequate oversight by a federal agency that has the tools, resources and determination to do its job."

Extends Civil Penalty Authority over Power Traders - Grants FERC the authority to use monetary penalties on companies that don't comply with requests for information. (This is similar to the authority of the Securities Exchange Commission).

Provides FERC with New Hiring Authority - Makes it easier for FERC to hire necessary outside help, including accountants, lawyers, and investigators for investigative purposes.

Eliminates OMB Approval Requirements - Eliminates the requirement that FERC receive approval from the Office of Management and Budget before launching an investigation or price discovery of electricity or natural gas markets involving more than 10 companies.

Enhances Criminal Penalty Authority - Increases the penalty amounts from a maximum of $5,000 to $1 million for violations of the Federal Power Act and the Natural Gas Act; and raises the maximum prison sentence from 2 years to 5 years for violations of the statute; and, $25,000 per day instead of the current $500 for violations of rules or orders under the Federal Power Act and the Natural Gas Act.

Broadens Civil Penalty Authority -- Broadens the Commission's authority to impose civil penalties to all sections of Part II of the Federal Power Act and the penalty amount is increased from $10,000 to $50,000 per violation per day.

"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 GAO report indicated, even if FERC has the will, FERC does not have the tools to do its job," Senator Feinstein said.

This legislation will go a long way toward providing FERC with the resources and legal authority it needs to protect consumers and ensure that energy prices are just and reasonable."