FERC: Back in fashion
In a nondescript brick building a few blocks behind Washington's Union Station, the Federal Energy Regulatory Commission quietly oversees the nation's energy industries, which account for an impressive 5 percent of the gross domestic product. Ever since the energy crisis of the 1970s, the five-member commission has toiled in near obscurity. Until now.
These days, Curt L. Hebert Jr., whom President Bush named as commission chairman in January, pops up on television news shows and on the front pages of the nation's largest newspapers. Hebert's newfound fame comes in part from California's festering electricity supply problems. FERC does, after all, have authority over electricity transmission and wholesale prices. The commission also governs hydroelectric dam operations, and shipments of oil and natural gas throughout the nation.
But it's also clear that Hebert enjoys the limelight. "He's more obviously political than I was," noted Elizabeth Moler, who was FERC chairman during President Clinton's first term and is now a lawyer at Exelon Corp., a Chicago-based electricity firm.
Hebert is an outspoken supporter of supply-side economics, and he has opposed California's pleas for federal help in resolving its energy problems, which stem from the state's efforts to restructure its electricity industry. "He follows the line that what can be competitive should be competitive," said Branko Terzic, a former FERC commissioner who is now director of energy and utilities services for the business-services firm Deloitte & Touche. "He believes in the discipline of market forces -- the negative discipline if you make mistakes and the positive incentives if you do well." Electricity is likely to remain Hebert's main challenge. "The industry is going through major changes because of the electricity restructuring experiments taking place throughout the country," Moler said. "Change attracts attention."
But Hebert's profile will also rise as the White House and Congress develop proposals to increase the nation's domestic energy production and to ease the cross-country transit of electricity, natural gas, and oil. "The role of FERC could be stronger and greater than ever as they go toward a comprehensive energy strategy," said Walker Nolan, an energy lawyer at Oldaker and Harris and a former lobbyist for Edison Electric Institute. "The commission has gone from being a routine regulatory institute to tackling some of the most difficult issues the nation is facing."
As chairman, Hebert's success could depend on his ability to work with other members of the commission. Bush has yet to fill the agency's two open commissioner slots. Insiders say that Hebert also needs to harness the commission's 1,217 employees and $175 million annual budget. So far, he has gotten high marks for naming Kevin Madden, who has served in a variety of posts at FERC, to be general counsel. "Madden is an insider who is well respected at the agency," Moler said.
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