FERC lacks data to oversee US power market , says Federal General Accounting Office

WASHINGTON - July 30, 2003 - The investigative arm of Congress said on Wednesday that the Federal Energy Regulatory Commission is hampered in overseeing U.S. electricity markets because it lacks jurisdiction over municipal utilities and big public generators such as Bonneville Power Administration.

The General Accounting Office said in a report that FERC does not have access to information from about 27 percent of the U.S. electric transmission system to help it regulate markets.

"Price and transaction information, as well as operational information, is important in order for FERC to be able to detect changes in the market, determine the legitimacy of market outcomes, and if needed, take corrective action," the GAO said.

Under federal law, FERC does not have authority over municipal utilities, cooperative utilities or federal power administrations. FERC also cannot obtain the detailed and sensitive market information submitted by utilities to the North American Electric Reliability Council.

"Consequently, FERC is currently missing some of these key pieces of information or is relying on third parties such as energy news services for related information to assist in meeting its market monitoring and oversight responsibilities," the report said.

Congress may need to decide whether FERC should have the ability to collect more market data, it added.

FERC Chairman Pat Wood said in a letter to the GAO that the agency was conducting its own internal analysis to determine what additional information it needs to monitor markets.

"FERC's authority to collect information has not kept pace with the changing electricity market," Wood wrote. In addition to data about physical trades, he said the agency also needs to watch the billion-dollar energy derivatives market.

"Ambiguity and limitations in our jurisdiction over electricity-based financial products retards our ability to oversee electric markets," Wood said.

The GAO report said that in the future, FERC hopes to obtain extensive data from regional transmission organizations created to run transmission grids and real-time power trading. However, it is unclear whether the new regional market monitors will be able to collect information on FERC's behalf, it said.

The U.S. Energy Information Administration, the statistical arm of the Energy Department, collects electricity information on a monthly and annual basis. Its data includes financial statistics, physical system operations and ownership.

The Energy Department's fossil energy office is responsible for gathering information about electricity imports from Mexico and Canada, while the Environmental Protection Agency collects electricity plant emission data.

A copy of the GAO report was posted on the Web at (http://www.gao.gov/new.items/d03586.pdf).