How will the commission answer Congress’ call for energy market transparency?
Michel Marcoux is a partner in Bruder, Gentile & Marcoux LLP, a law firm in Washington, D.C. Contact him at email@example.com.
With the Energy Policy Act of 2005 (EPACT), Congress gives a big boost to Federal Energy Regulatory Commission (FERC) efforts to encourage greater transparency of price formation and restore confidence in wholesale energy markets.1
Determined to forestall repeats of the 2001 crises in the California and Midwest energy markets, FERC already had been encouraging market participants to improve wholesale price formation transparency, accuracy, and reliability. FERC considered both guidance on desirable price index minimum characteristics and standard terms for industry players to report prices to index developers.2
Following the EPACT promulgation of rigorous criminal and civil penalties, FERC has acted to promote price transparency, among other statutory objectives, by issuing a market manipulation notice of proposed rulemaking and an enforcement policy statement.
In addition, of the more than dozen EPACT-provided rulemakings, two would enable FERC to prescribe wholesale price transparency rules for the country’s interstate natural gas and electricity industries.
Given EPACT’s plain emphasis on improving gas and electric price transparency in an effort to restore market confidence, implemention of the transparency rules should not be delayed.