FERC Commissioner Looks at Cost and Reliability.(Interview)

Curt Hebert predicts too much caution could impede reliability

The Federal Energy Regulatory Commission's lone Republican member, Curt Hebert, says that he often finds himself in opposition to other commission members, Washington bureaucrats, and federal energy policy makers. The market can and will provide energy reliability, he says, especially if existing price caps are removed, allowing the market to send clear signals to potential investors. In this June 2000 interview with EUN, Commissioner Hebert made a number of predictions about the performance of the U.S. energy system. The passage of time will allow us to judge the accuracy of those predictions.

EUN: First, what is FERC and what is your role in FERC?

Hebert: FERC is the Federal Energy Regulatory Commission, as you know. We handle the wholesale side of the business.

When you look at electric and gas, the only generation that we tend to look at is hydropower, when it comes to the licensing of those facilities. But the Federal Energy Regulatory Commission is the old Federal Power Commission, FPC. And we regulate the interstate grids on pipes and electric, and not only the service, but also the cost. Primarily we are an economic agency.

I am one of five commissioners. I am a Republican appointee. I was originally asked to come here by Senator Trent Lott, the majority leader. He and I are both from Pascagoula and good friends. I was at the state commission in Mississippi prior to that.

With the administration being Democrat, the Republican appointees to FERC are decided upon by the Republicans in the Senate, and then the president agrees to it. Obviously, then, he appoints me and then I go through Senate confirmation. I was originally appointed for a year-and-a-half, the end of one term, then reappointed last year, and reconfirmed for a five-year term to expire in 2004.

Political Stargazing

EUN: Your colleagues are...?

Hebert: All Democrats right now.

EUN: Is that unusual?

Hebert: I did have a Republican colleague, Vicky Bailey, who left in December to run PSI Energy. She is their new president. Her seat is still vacant. The chairman's seat held by Jim Hoecker is to expire June 30th. And so, it looks like there will be two vacant seats next year, which will hopefully give then-President Bush an opportunity to make two good appointments, which will give us a quick majority.

But if in fact we do get a Gore administration, I think it will be quite the opposite, a continuation of what we've seen over the last eight years. If you look at the current situation, high oil and gas prices, with even the secretary of energy going around talking about questionable reliability, it makes you understand the importance of a Bush administration, in my eyes.

Other Players

EUN: There are other agencies and groups that EUN readers know about. Would you provide a brief primer on the role of these organizations? I'm thinking particularly about ISOs, RTOs, and NERC.

Hebert: NERC has been one of the primary players when it comes to reliability, and what we do on a national scale to ensure reliability. There is a debate out there as to whether or not more needs to be done on reliability.

My position has been that we certainly have the tools before us. FERC is an economic agency. If I tie your earnings to your …