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Platts Energy Podium: FERC Chief Says More Companies Self-Report Trader Concerns

July 31, 2012

WASHINGTON, July 31, 2012 /PRNewswire/ — More companies are self-reporting possible inappropriate behavior by traders to the U.S. Federal Energy Regulatory Commission (FERC) because of the agency’s increased focus on preventing manipulation of the electricity and natural gas markets, FERC Chairman Jon Wellinghoff said Tuesday at a Platts Energy Podium.

Speaking to reporters at the Washington, D.C., event, Wellinghoff said the activities of FERC’s new analytics and surveillance division are a “huge deterrent” to market manipulation.

“We are starting to get something that we’ve never gotten before, that’s self reports,” he said.

In more than one instance, Wellinghoff said, a senior company executive has told FERC, “We found a trader doing something that we thought you may view as inappropriate.”

The trend “tells me our enforcement efforts are very effective,” he added.

FERC’s enforcement staff is examining any attempts to manipulate electricity and gas markets.

“I’ve told the office to go in those areas that are the most productive,” Wellinghoff said.

Wellinghoff also offered his views on gas-electricity coordination, a topic that pipeline companies, generators, grid operators and other experts will discuss at a series of FERC technical conferences in August.

The commission is “taking in ideas,” which include changes in gas tariffs, scheduling and nominations, Wellinghoff said, noting that he was “still open to regulatory solutions” if they are needed to prevent power outages due to inadequate supplies of the fuel.

Any rule or policy changes by FERC would need to recognize key local differences, such as the fact that New England “is a peninsula in the pipeline system,” he said. Other regions are served by more than one network of gas pipelines, the chairman said.

Turning to transmission, Wellinghoff said staff and commissioners are starting to float proposals internally for changing FERC’s policy for awarding developers of interstate lines incentives such as higher base rates of return on equity.

While FERC has no regulatory role in responding to the massive power outage in India, the chairman said the commission is studying the event closely for any lessons for the stability of the U.S. grid.

“I think we have a good handle on reliability, but we’re certainly looking at India to see if there is something larger we can learn,” Wellinghoff said.

A Democrat, Wellinghoff was first appointed as a commissioner in 2006 by President George W. Bush and was named chairman in 2009 by President Barack Obama. Prior to joining FERC, he was in private practice, focusing on regulatory, consumer and commercial law.

A recording of the Jon Wellinghoff session is available via podcast at this link: : http://plts.co/PEP0731

Sponsored by Platts, a leading global energy, petrochemicals and metals information provider, Platts Energy Podium provides an ongoing forum for prominent newsmakers and the press to address important energy and environmental issues.

For more information on energy and energy policy, visit the Platts website at www.platts.com.

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