NCPA - National Center for Policy Analysis

Energy Regulators Don't Adjust to Competitive Environment

June 18, 2002

Energy bureaucrats may still be working off the old command-and-control playbook, rather than responding to the new competitive environment. So suggests a new report from the General Accounting Office. The report accuses the Federal Energy Regulatory Commission of being hobbled by antiquated procedures and legislation.

  • FERC has been unable to transform itself to operate in the new environment of competitive energy markets -- partly because of leadership changes and high staff turnover created by higher salaries in private business, the report says.
  • Without stronger enforcement power, the agency will not be able to deter anticompetitive behavior or outright violations of market rules.
  • Agency officials are asking Congress for more power to enable them to "stabilize" energy prices.

California Democratic politicians also criticize FERC for its role in last year's state power crisis. The office of Sen. Diane Feinstein charged that it was FERC's "inability and unwillingness to regulate the California energy market in the first place that led to the severe energy crisis."

Source: David Stout, "Study Faults U.S. Regulators in Aftermath of Power Crisis," New York Times, June 18, 2002.

For GAO report (when available)


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