[Congressional Record Volume 154, Number 153 (Thursday, September 25, 2008)]
[Senate]
[Pages S9467-S9468]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                                  FERC

  Mr. CORNYN. Madam President, I note that the distinguished ranking 
member of the Committee on Energy and Natural Resources is on the 
floor. I wonder if I might address a question to my good friend from 
New Mexico. Many are alleging that one of the root causes of our 
current financial distress stems from insufficient regulatory oversight 
of financial markets. That is a criticism which some allege to be 
applicable to our Nation's energy markets--the theory apparently being 
that lax oversight has allowed speculators and manipulators to 
artificially increase prices for oil and gas. Given that you were 
Chairman of the Energy Committee at the time of passage of the Energy 
Policy Act of 2005 I wonder if you might want to comment on the 
regulatory authorities that were addressed in that act. As I recall, 
EPACT significantly increased the Federal Energy Regulatory 
Commission's ability to not only oversee markets but to punish 
manipulation within those markets.
  Mr DOMENICI. The Senator is absolutely correct. We enhanced FERC's 
authority to police and prevent market manipulation and we increased 
the Commission's authority to levy fines to $1 million per day. It was 
our thinking that the potential for fines of this magnitude would serve 
as a meaningful deterrent to market manipulation. While I am a long 
time supporter of markets, I agreed to the grant of enhanced penalty 
authority to the FERC as a step to ensure that those markets were 
conducted fairly, openly, and without the exercise of market power by 
any of the participants.
  Mr. CORNYN. Madam President, I appreciate the comments of my 
colleague, and I share his sentiment both toward the desirability of 
markets and the need to ensure that those markets operate fairly and 
efficiently. My specific inquiry relates to the standard of review 
which attaches to any enforcement proceedings under these enhanced 
authorities. While I agree with the need for greater oversight in the 
operation of these markets, it seems to me that along with its enhanced 
oversight authority the FERC has an obligation

[[Page S9468]]

to protect the due process rights for those against whom it might bring 
causes of action. Did EPACT bring about any change in the standards of 
review which would attach to enforcement proceedings under these new 
authorities?
  Mr. DOMENICI. I think the Senator's question is well informed, and I 
can assure him that there was no intent to change the standard of 
review which would attach to any enforcement proceeding. The 
longstanding practice has been for the accused party to have rights to 
a de novo review of the charges in Federal court. Such rights are 
necessary to ensure that the agency does not act as both prosecutor and 
judge in any enforcement proceeding. That right is clear, not just in 
the case law but in other statutes administered by the FERC, including 
the Federal Power Act and the Natural Gas Policy Act. There is no 
suggestion and there can be no inference that we intended to change 
that standard with our enhanced market oversight provisions in the 
Natural Gas Act.
  Mr. CORNYN. I thank my good friend for that clarification and for the 
wisdom he has brought to Federal energy policy.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from North Carolina.
  Mrs. DOLE. Madam President, let me say, first, following one of my 
dearest friends in the Senate, I cannot tell you how much I admire and 
respect this great man and how much he will be missed in the Senate.
  Mr. DOMENICI. Madam President, I say to the Senator, thank you very 
much, Senator Dole.

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