Federal Energy Panel Chair Hebert Steps Down

Curtis L. Hebert Jr., a free-market apostle and beleaguered chairman of the Federal Energy Regulatory Commission, announced Monday that he will resign at the end of the month.

The move had been expected, and it is widely believed that President Bush soon will name FERC Commissioner Patrick H. Wood III, a former Texas regulator, to run the agency.

Hebert, 38, a protege of Senate GOP Leader Trent Lott of Mississippi, has served as chairman only since the Republican administration took office in January.

Wood is a longtime Bush confidant whose relationship with the president dates back to Bush’s days as governor of Texas. Since his appointment to the commission, Wood has been widely viewed as the administration’s top choice to head the agency, which has come under increasing scrutiny for its role in the California energy crisis.

Like Hebert, Wood advocates deregulation. But he comes across as more of a pragmatist, saying that government should intervene if dysfunctional markets do not produce benefits for consumers.

FERC, which functions as a kind of national utilities commission, has been criticized for being lax in its oversight of industry and aloof toward the cares of consumers, especially when it came to California’s energy crunch.

During his tenure as head of the agency, Hebert’s penchant for delivering lectures on the virtues of deregulated markets quickly irritated California’s Democratic political establishment, which had been clamoring for federal price caps.

“It can’t be a bad thing for California,” Carl Wood, a member of the state’s Public Utilities Commission, said of Hebert’s resignation. “He didn’t respond to a real crisis except in a very dogmatic way, and that caused the state a great deal of hardship.”

Mike Florio, senior attorney with the Utility Reform Network in San Francisco, had a one-word reaction: “Hallelujah!” However, FERC also had been slow to intervene in California under the Clinton administration. And it was Hebert who earlier this summer acquiesced in the agency’s imposition of price limits on wholesale electricity throughout the West. Though Hebert avoided calling them “price caps,” they are seen as such by many in the industry, and have been credited by independent observers with helping to ease the crisis.

“I came to this job as a strong advocate of free markets, and if anything, my time on the commission has only strengthened this belief,” Hebert said in a statement. “It has been a pleasure and honor to serve this administration and the American people, and to have had the opportunity to serve at the altar of freedom for this country.”

White House spokeswoman Ann Womack discounted suggestions that Hebert had been elbowed aside. “It was a decision that he informed us of.

“The president appreciates his service,” Womack added. “He always balanced the need for just and reasonable rates with the need to ensure an adequate supply of new sources of energy.”

In Sacramento, Hilary McLean, a spokeswoman for California Gov. Gray Davis, said that the governor is “looking forward to President Bush appointing a new FERC chair who will be more responsive to the people of California, who have been overcharged by the greed of out-of-state [power] generators.”

Hebert, who was first appointed to the commission in 1997, did not announce his job plans, although people close to him at FERC say they expect him to go into the business world.

*

Times staff writer Nancy Vogel in Sacramento contributed to this story.