Bingaman On FERC and CFTC Response Letters

April 17, 2007
02:02 PM
In February of this year, Chairman Bingaman sent letters to the Chairmen of the Federal Energy Regulatory Commission (FERC) and Commodity Futures Trading Commission (CFTC), detailing concerns about potential anomalies in natural gas markets. These concerns were heightened by the fall 2006 collapse of the Amaranth Advisors LLC hedge fund, and have been echoed by a wide variety of stakeholders. The responses are being released by the agencies today, pursuant to pending Freedom of Information Act requests.
Chairman Bingaman: “I have carefully reviewed the letters from the Chairmen of FERC and the CFTC, and appreciate the timeliness of the Commissions’ respective replies. As Chairman of the Senate Committee with oversight over natural gas markets, I hope to learn more about FERC’s role, beyond what is described in its letter, in ensuring just and reasonable natural gas prices, particularly in an environment where—by the Commission’s own account—physical and financial energy markets have become increasingly interdependent.
“In my view, the collapse last fall of the Amaranth Advisors hedge fund, with its large positions in natural gas markets, suggests Congressional oversight in this area is warranted.  Given the billions of dollars at stake, it’s appropriate for the Committee to ask serious questions about how our regulatory agencies are working together, whether they have the authorities they need to adequately police these markets, and if they are using the authorities they have as Congress intended—to protect American consumers and businesses.
“We are continuing to gather information and hear the perspectives of a variety of stakeholders concerned about the integrity of these markets. Along those lines, I look forward to meeting with Chairman Kelliher in person this week, to find out more about FERC’s market monitoring capabilities, and its specific response to a number of questions that remain unanswered.”
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