House Republicans are targeting the nation’s electricity regulator for tighter oversight as part of a comprehensive energy bill the chamber’s energy committee wants to pass this year.
The House Energy and Commerce Committee’s energy and power subcommittee is holding an unprecedented two-day hearing to review draft legislation targeting the enforcement powers of federal utility regulators as well as a hotly contested Energy Department efficiency program.
The draft bill also takes aim at the Federal Energy Regulatory Commission’s Office of Enforcement and how it conducts investigations into attempts by energy companies to manipulate electricity and gas markets. “Many have raised concerns about the actions of FERC’s Office of Enforcement, particularly regarding fairness, consistency, transparency and due process,” said Ed Whitfield, R-Ky., the subcommittee’s chairman.
The bill would place limits on the commission in conducting its oversight of the markets through investigations, enforcement and leveling penalties for violators.
“Some have even questioned whether FERC enforcement actions are counterproductive and actually impede the proper functioning of electricity markets,” Whitfield added. The draft bill, he said, would establish an Office of Compliance Assistance at the commission, which Democrats and commission officials argued would be duplicative and harm the commission’s work.
The draft bill also includes provisions to improve transparency in the commission’s investigations into market manipulation, which commissioners and Democrats on the committee told Whitfield go too far.
The commission’s enforcement office became a hot-button issue last year when Republicans opposed the nomination of the president’s pick to lead the commission, Norman Bay, because of his record as director of FERC’s enforcement wing.
Bay was criticized for being too hard on the industry in going after cases of market manipulation in the gas and electricity markets.
The hearings will continue Thursday, marking one of the last actions of the committee before it begins cobbling together legislation into what Michigan’s Fred Upton, the chairman of the House Energy and Commerce Committee, calls his “Architecture of Abundance.”
But Democrats are warning the GOP not to “rush” the process, as the draft bills immediately drew challenges from Democrats at the hearing.
Rep. Frank Pallone of New Jersey, the committee’s ranking Democrat, argued that the draft measure would hobble the Federal Energy Regulatory Commission’s ability to go after bad actors in the energy markets.
Pallone said the “Accountability” draft bill handicaps the commission by saying major investment banks such as “JPMorgan Chase is a victim,” as opposed to the consumers who companies such as JPMorgan sought to harm through manipulation of the energy markets.
Pallone also said that the parts of the bill that address competition in the regional markets that the commission oversees go too far and need to be dialed back. He also voiced “opposition” to measures addressing the Energy Department’s energy-efficiency program.
He feared that the GOP’s changes to how the agency promulgates standards for appliances could drive up energy use and make the nation less efficient.
“I don’t understand the majority’s rationale” in proposing many of these measures, Pallone said, but nevertheless was willing to work with the GOP to discuss a compromise. He also warned against rushing to meet some pre-designated deadline to pass a bill, but said the draft measures warrant more oversight and hearings.
Whitfield pulled out a exhaustive list of dozens of efficiency standards under development, and asked Obama administration witnesses if the uptick in the number of the standards was due to the president’s climate change agenda, and not to help Americans save money by lowering their energy costs.
“We don’t want consumers hurt for [the] very small efficiency” advantages that would come from these efficiency rules, he said.
