By the OGJ Online Staff
HOUSTON, Feb. 8 — Government agencies that oversee various aspects of US energy markets should consider forming an interagency task force to monitor new business trends in the oil, gas, and electric markets, said Federal Energy Regulatory Commissioner Nora Brownell Friday.
“It would be helpful if there were quarterly meetings to look at the market,” she said at a newsmaker breakfast sponsored by the US Energy Association. “We need to see trends.”
Members of the task force could include FERC, the Commodities and Exchange Commission, the Securities and Exchange Commission, the Department of Justice, the Federal Reserve, and others, Brownell suggested.
In the wake of Enron Corp.’s financial collapse, the Bush administration last month directed the Justice Department to start a criminal investigation of whether the company knowingly sought to defraud its investors by hiding important financial information it knew would hurt the company’s stock price.
Justice also oversees an interagency task force on Enron that coordinates efforts with SEC and the Labor Department. Both agencies launched their own probes last winter (OGJ Online, Jan. 10, 2002). FERC and the Department of Energy also contribute but play a smaller role.
Meanwhile, nine congressional committees are in the middle of investigating the reasons for the giant energy marketer’s collapse, and lobbyists expect to see legislation passed this year that expands disclosure requirements and places new controls on how companies can value long-term energy trades (OGJ Online, Feb. 7, 2002).
SEC is calling on accountants to reconfigure their own oversight boards as well.
However, administration officials and lawmakers from energy-producing states are warning Congress that it should study the facts further before making new laws. There is already strong evidence to suggest Enron’s problems likely came from dubious accounting practices, not restructured energy markets, White House officials have said.
Brownell reiterated recent comments by her chairman Pat Wood, who labels Enron’s problems a “human tragedy.” Nevertheless another lesson from the Enron debacle is that regulators need to be more aware of emerging business trends, she said.
“There was a failure of the system to be on top of new business models,” she said. “And the outcome has impacted companies with strong balance sheets. I’m a huge believer in transparency and more information.”