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Frontlines

Fortnightly Magazine - April 15 1998

Washington, D.C., attorney Jeffrey Watkiss (Bracewell & Patterson), representing four power marketers: Engage Energy, Enron Power Marketing, Koch Energy Trading, and Vitol Gas & Electric. Washington lawyer Sara Schotland (Cleary, Gottlieb) represented Anderson's Electric Consumers' Resource Council, another CAPT member. (Schotland later wrote that clever memo for ELCON, the one that co-op association lawyer Sue Kelly called "a valentine," which argued how NERC violates antitrust law as an unsupervised but self-regulating industry association.)

There's no denying: CAPT took an ingenious position. It didn't question that operators need information but complained that some control areas were curtailing deals with tags missing (especially in the Southwest Power Pool, where compliance with NERC rules became a condition of membership). Oklahoma Gas & Electric questioned whether it would be "placed in jeopardy" of violating FERC rules to comply with tagging. (See, Coalition Against Private Tariffs, FERC Docket No. el97-58-000 [filed originally in Docket rm95-9-003], including comments filed by some 30 utilities, marketers and industry groups.)

The CAPT filing threw the FERC for a loop. So it stalled. Why not call a meeting? The FERC held a technical conference in February to ask for help, but warned witnesses they could not discuss the CAPT case. As we reported in our last issue, the industry begged the FERC not just to act, but to open a brand-new rulemaking, perhaps bigger than 888 itself. ("Reliability: FERC's New Gig?" April 1, p. 18.)

And it was there, at the conference, that a new opponent emerged: none other than Curt Hébert, the FERC member appointed last fall from his seat on the Mississippi Public Service Commission. Hébert now threatens to step into the role of designated loose cannon.

With Hoecker tied to the political and fence-mending roles demanded of the chair, Hébert is free to think outside the box (em just what Hoecker doesn't need at a time like this. Hébert has become a story himself: questioning Hoecker's agenda from bench, interrupting hearings and meetings; bulldozing the balance Hoecker is trying to maintain.

Back in October, when I attended the Edison Electric Institute's Financial Conference in Disney World, when his FERC appointment was hanging in the balance, EEI put Hébert on the podium to introduce him to the electric industry. An audience member asked, "If you had to campaign for a seat on the FERC, what would your stump speech be?"

Hébert replied: "What I would hope to do at the FERC is do a lot of listening (em to industry, Congress, ratepayers and the financial community."

But at the February conference, led expertly by Commissioner Vicky Bailey, Hébert rejected the very premise of the meeting (em getting the industry together to develop rules.

"I feel," he said, "like I'm at the second day of a two-day meeting and I missed the first day¼ What about giving an incentive to the market to do what it needs to do."

Hébert rejected Hoecker's legalistic approach: "Line loading is a real concern, but why not just ensure enough capacity in the first instance through incentives¼ We've got to have an incentive to build