Hearings and Business Meetings

SD-366 Energy Committee Hearing Room 10:30 AM

The Honorable Marc Spitzer

Commissioner, Federal Energy Regulatory Commission

TESTIMONY OF MARC SPITZER

NOMINEE TO BE A MEMBER OF THE

FEDERAL ENERGY REGULATORY COMMISSION

BEFORE THE COMMITTEE ON ENERGY AND NATURAL RESOURCES

UNITED STATES SENATE

June 28, 2006

 

Mr. Chairman, Senator Bingaman and members of the Committee, I am greatly honored to appear before you this morning and appreciate your consideration of my nomination to serve on the Federal Energy Regulatory Commission (FERC).  There are many individuals whose support in this endeavor I appreciate, but I must especially acknowledge and thank Senator McCain and Senator Kyl for their support today.  I cannot begin to express my thanks and appreciation for the confidence the President has shown by nominating me to this position and for the wonderful opportunity it provides to serve our Country.  I would also like to acknowledge the loving support of my wife, Jacque.  

 

If confirmed, I pledge to bring a balanced perspective to the FERC, based on my educational and geographical background and professional experience.  After being born and raised in Pennsylvania and attending Dickinson College in the East, I journeyed to the Midwest to attend law school at the University of Michigan.  In 1982, I moved to Arizona to be an attorney at an established Phoenix law firm, where my practice focused on Federal income taxation.  In 1987, I was certified as a Specialist in tax law by the State Bar of Arizona.  I continued to practice law as a partner in that firm until 1997 when I joined a “Big Five” accounting firm as a tax attorney.  I have practiced as a sole practitioner since 2001 and have maintained my credentials as an attorney and tax law specialist while in public service.

 

I have always felt a desire to serve society and contribute meaningfully to my community.  This led me to seek election to the Arizona State Senate in 1992 where I subsequently served as Chairman of the Finance and Judiciary Committees and was ultimately selected by my peers to represent them as Senate Majority Leader.  As an elected legislator, I quickly learned to listen to all of my constituencies and that wise and effective government requires a careful balancing of competing interests.  In my leadership capacities, I was required to manage people and personalities, mediate issues, and always exercise good judgment within the political framework.  Having authored legislation, I am deeply respectful of the legislative process.  During my tenure at the Arizona Senate, I had the experience of working on energy, tax and environmental issues.  Of all the issues I dealt with, I felt these offered the greatest potential benefits to our community. 

 

In 2000, I was elected to the Arizona Corporation Commission.  The Arizona Commission is one of several state regulatory bodies subject to popular election. In addition to exercising limited regulatory power over corporations, it is entrusted by the State Constitution with broad regulatory authority over public utilities.  As Commissioner, I sit in judgment on contested cases and settlement proposals and render decisions by applying the law to the facts in specific cases.  In my capacity as Commissioner, I am called upon to interpret and follow the State Constitution and the intent of the Legislature.  Further, my decisions are based upon a written record that documents evidence presented and established at a contested hearing presided over by an administrative law judge.  During my tenure on the Arizona Corporation Commission, I have made many difficult decisions, including increasing customers’ rates and siting generation and transmission facilities.  I am proud to have the reputation as one who treats all parties equally under the law and pride myself on my ability to listen with an open mind to all sides before rendering a decision.

 

As Chairman of the Arizona Commission from 2003 to 2005, I presided over major proceedings involving electricity, natural gas, water, securities and telecommunications issues.  As a Commissioner, I have been attentive to ratepayer concerns and compassionate in the face of rising utility costs.  As a trained attorney, I deeply respect the law and recognize legal limits on regulatory authority.  If confirmed, I believe my financial and tax background would be an asset to the impressive array of skills which already exist at the FERC. 

 

The Arizona Constitution mandates that the Commission on which I currently serve ensure reliable utility services at just and reasonable rates.  But the Arizona Constitution also requires the Commission to authorize a fair rate of return for the retail utilities.  Meeting these potentially divergent goals has been challenging in an era of rising energy prices.  I believe our Commission has met those challenges by supporting critical infrastructure, including pre-approval of gas pipeline capacity and storage, and siting power plants and transmission lines.  The Arizona Commission has also tackled the difficult task of balancing competing interests in setting retail rates for electricity and natural gas.  While raising rates is never pleasant for a utilities regulator, elected or otherwise, it is imperative and ultimately in the consumers’ best interests that the regulated utilities-- public, private and co-operative -- remain financially viable. 

 

If confirmed, I would welcome the opportunity to bring my experience to bear on the many interesting and challenging issues that are before the Federal Energy Regulatory Commission.  By enacting the Energy Policy Act of 2005 (EPAct 2005), Congress wisely provided a framework for increasing the supply of energy and diversity of energy resources.  EPAct 2005 also builds upon demand side management and energy efficiency strategies.  In Arizona, our Commission simultaneously addressed these issues at the retail level.  Implementation of Congressional intent at the wholesale and national platforms would be a daunting, but exciting task.

 

By enacting EPAct 2005, Congress has given the Commission new authorities and tools that will help ensure just and reasonable prices and guard the reliability of the Nation’s transmission grid.  I commend Chairman Kelliher and the rest of the Commission.  Their efforts and the fine work they have done after EPAct 2005 prove that Congress’ trust was well placed.  I hope that you will give me an opportunity to assist the Commission in carrying out its responsibilities under the law and to ensure that the ratepayers of our Nation receive reliable power at affordable prices.

 

In closing, my broad experience in public service in both the Arizona legislature and the Arizona Corporation Commission provides me with an appreciation of the governmental process and the need for the various public bodies to work together to achieve successful results.  Further, my experiences regulating the energy industry have prepared me well for the great responsibilities with which I would be entrusted, if confirmed.  Being born and raised in the East, educated in the Midwest and practicing law and serving in public office in Arizona have given me a wider perspective than would be the case if I were familiar with only one geographic area of the Country. 

 

I thank you very much for your time and consideration and welcome any questions you may have.