FERC is usually known around Washington as an agency with a super-boring docket - it oversees power rate regulation, with specialties in hydro, pipelines, and natural gas, and also polices interstate electricity sales. It is famous for clogging the docket of the DC Circuit, and very often losing there. And for true governance afficiandoes, it is a purportedly independent agency that is part of the Department of Energy. Which is like making the SEC a unit of the Department of the Treasury. Is it independent? Politically accountable? It all brings to mind the vagaries of the PCAOB case, which we looked at here.
So the news that the post-Enron powers given to the agency to supervise energy trading are being used for huge fines and lots of investigations - and also occasioning serious pushback from the finance industry - is pretty interesting. Here are some reasons to fear FERC:
- Like the Fed, but unlike the SEC, it is self-funding, and so insulated from "starvation from the Hill"-style supervision.
- Like the SEC, but less like the Fed, it's quite a lawyered up agency - and the ability to get a former GC of the FBI to serve as deputy there is a serious notice of intent (though it is one of those GCs who has spent the entirety of their career in government service, which makes it only shocking, instead of totally implausible).
- Its statutory powers means it can seek real fines like the $435 million it wants from Barclay's for manipulating California energy sales. Peter Henning discusses how that's not chicken feed, at least given everything else that Barclay's has going on, here.
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