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26 Energy L.J. 1 (2005)
Market Manipulation, Market Power, and the Authority of the Federal Energy Regulatory Commission

handle is hein.journals/energy26 and id is 11 raw text is: ENERGY LAW JOURNAL Volume 26, No. 1 2005 MARKET MANIPULATION, MARKET POWER, AND THE AUTHORITY OF THE FEDERAL ENERGY REGULATORY COMMISSION Hon. Joseph T. Kelliher Of the Commission's primary task there is no doubt, however, and that is to guard the consumer from exploitation by non-competitive electric power companies.' Give us the tools and we will finish the job.2 I. INTRODUCTION For years, the Federal Energy Regulatory Commission (Commission) has promoted competition in wholesale power markets subject to its jurisdiction. It has done so in response to dramatic changes that occurred in the electricity industry over the past twenty-five years. Those changes greatly expanded competition in wholesale power markets, and the Commission made a policy decision to rely increasingly on competition to lower wholesale power prices. Although the Commission's policy has evolved in response to changes in electricity markets, the goal of Agency policy has remained constant: assuring just and reasonable rates. The Commission has certain legal duties under the Federal Power Act, perhaps the most important of which is assuring that wholesale power rates are just and reasonable. However, the Commission has discretion on what policies it can pursue to assure such rates. The Agency has chosen to rely on competition to achieve that end. 7 The courts have upheld that approach, in large part, because the Commission has not relied solely on market forces. In fact, the Commission's policies have relied on both competition and regulation to assure just and reasonable rates. The Commission has struggled to find the right balance between competition and regulation. As the industry has changed, the Commission's role has evolved from setting rates for individual sellers to setting rules of general application that govern electricity markets. Among the most important market rules are those that prevent market manipulation. This article reviews the Commission's Commissioner, Federal Energy Regulatory Commission; B.S.F.S., School of Foreign Service, Georgetown University; J.D., Magna Cum Laude, Washington College of Law, American University. This article represents the views of the author, and not necessarily the views of the Federal Energy Regulatory Commission or the United States Government. 1. NAACP v. FPC, 520 F-2d 432, 438 (D.C. Cir. 1975). 2. Sir Winston Churchill (BBC Radio Broadcast Feb. 9, 1941).

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