CFTC Expects to Finish Energy Pricing Probe in ’04
The Commodity Futures Trading Commission probably will wrap up its probe of price manipulation in the Western U.S. energy markets by the middle of 2004, Chairman James Newsome said Wednesday.
“In general, with the companies that are cooperating with us, I would hope that we can finish those investigations by the end of this year. Those who are not cooperating, it may take through the end of next spring,” Newsome said.
The CFTC launched investigations last year into allegations that companies had sought to bump up natural gas prices by reporting fake trades during the Western states’ energy crisis in 2000-01.
So far only two companies, Dynegy Inc. and Xcel Energy Inc.’s NRG Energy, have paid fines to settle the charges.
Former natural gas traders from Dynegy and El Paso Corp. are facing fraud charges for allegedly reporting fake prices to industry publications.
Newsome declined to comment on the number of subpoenas the CFTC had issued to companies suspected of illegal behavior, but said the duration of the investigation depended on the cooperation of those companies.
“Those who have not [cooperated], we’re going to continue to be aggressive and we’re going to find out the information, and it just may take a little longer,” he said.
Earlier, Newsome met with about 40 industry representatives at a forum hosted by the University of Houston’s Global Energy Management Institute to discuss efforts to develop reliable electricity and natural gas indexes.
Newsome said he remained reluctant to back an industry proposal that would formalize a “safe harbor” limited-liability rule for companies reporting prices used to compile those indexes.
“I think the reality is that honest mistakes are not a violation on the Commodity Exchange Act, and that the commission has not and will not bring enforcement action against honest mistakes,” he said.
Newsome also said he would meet with Federal Energy Regulatory Commission Chairman Patrick H. Wood III on Wednesday to discuss that and other issues.
