Rep. Tom Allen Questions FERC Chairman on Fuel Price Gouging

Rep. Tom Allen Questions FERC Chairman on Fuel Price Gouging
Seeks assurance that FERC will enforce rules protecting against price manipulation this winter

Washington, D.C.---U.S. Representative Tom Allen last week quizzed Federal Energy Regulatory Commission (FERC) Chairman Joe Kelliher about FERC's ability and willingness to investigate and punish price manipulation in the energy marketplace this winter. The exchange occurred on November 2, 2005, when Chairman Kelliher appeared before the House Energy and Commerce Committee's Subcommittee on Energy and Air Quality.

"Chairman Kelliher, I am sure you share my concern that, as commodity supplies tighten this winter, the potential for market manipulation increases," Representative Allen said. "Could you give more detail about the market manipulation rules your Commission has proposed? Specifically, when will they be implemented, and will they be in place to prevent market manipulation, on a real-time basis, in the natural gas and electricity markets this winter, should it occur?"

In response, Chairman Kelliher assured the Subcommittee that he was aware that there is a potential for a tight natural gas market this winter. He also promised that FERC would have its market manipulation rules in place by the end of the year, and that FERC stands ready to prevent market manipulation should it occur.

Representative Allen asked Chairman Kelliher about market manipulation in the natural gas marketplace specifically because of reports from ISO New England, operators of the region's electrical grid, and Kurt Adams, Chairman of the Maine Public Utilities Commission, that there may not be sufficient supplies of natural gas to generate electricity in the event the weather becomes very cold this winter.

"Maine families and Maine businesses are struggling to pay fuel bills that are 30 percent or more higher than last year," Representative Allen said. "While I understand that Hurricanes Katrina and Rita have certainly had an impact on the natural gas supply and distribution network, which may lead to higher prices and tight supply this winter, we must remain on guard to make sure that there is no unscrupulous or anti-competitive behavior manipulating prices, further tightening supplies or raising prices. I intend to hold Chairman Kelliher to his word that FERC will quickly investigate and immediately halt any manipulation or anti-competitive behavior that may occur as a result of shortages in the natural gas marketplace this winter."

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