Cantwell Co-Leads Bicameral Legislation to Protect Consumers and Prevent Energy Market Manipulation
WASHINGTON, D.C. – Today, U.S. Senators Maria Cantwell (D-WA) and Catherine Cortez Masto (D-NV) introduced bicameral legislation to provide the Federal Energy Regulatory Commission (FERC) with additional authority to protect consumers from the harm caused by traders that repeatedly manipulate electricity and natural gas markets. The Energy Consumer Protection Act is also being introduced in the House of Representatives by Representative Jan Schakowsky (D-IL-09).
“This legislation will add a key consumer protection arrow to FERC’s quiver by blocking market manipulators from repeating their crimes and harming energy consumers,” said Senator Cantwell. “The burden of today’s elevated energy prices makes the quick passage of this bill more important than ever.”
“We need an all-of-the-above strategy to make sure that energy prices are affordable for Nevadans,” said Senator Cortez Masto, “and that includes my legislation to create new tools to prevent bad actors from manipulating energy markets and hiking up prices for consumers and businesses alike. I’m going to continue working to bring down costs for businesses and families in the Silver State.”
Current law bans market manipulation, but FERC’s current enforcement mechanisms aren’t sufficient for deterring traders from violating the law. This legislation would give FERC additional tools to enforce existing law. The Energy Consumer Protection Act would allow FERC to temporarily or permanently ban traders from trading in certain energy markets if they 1) violate the Federal Power Act or Natural Gas Act by manipulating the electricity or natural gas markets or 2) file false information regarding those markets.
Full bill text is available HERE.
Senator Cantwell has long sought to protect consumers from unjustified energy prices. In the aftermath of Enron’s energy trading schemes, Cantwell authored an amendment to the Energy Policy Act of 2005 that strengthened the Federal Energy Regulatory Commission’s (FERC) authority to investigate and punish market manipulation in the electricity and natural gas markets.
Since then, FERC has built a permanent cadre of internal energy experts that continually monitor and investigate anomalous market trends and suspicious behavior. These policemen on the beat have uncovered numerous exploitive schemes, to date approving 127 settlement agreements, assessing over $790 million in civil penalties and disgorging over $521 million in illegal profits.
In the wake of the 2008 Financial Crisis, Cantwell authored legislation that gave the Commodities Futures Trading Commission (CFTC) similar anti-market manipulation authority and responsibilities in financially-settled energy commodity derivatives markets. Over the last decade, the Commission has used their anti-fraud and anti-market manipulation authority to prosecute more than 50 actions which have collectively imposed more than $4.5 billion in monetary relief.
A Cantwell addition to the 2007 Energy Bill gave the FTC virtually identical anti-market manipulation authority and responsibility to the Federal Trade Commission to oversee wholesale crude oil and petroleum markets. However, unlike FERC and the CFTC, the FTC has only used their authority sparingly.
Most recently, Sen. Cantwell introduced S.4217, the Transportation Fuel Market Transparency Act, which would significantly enhance the 2007 authority and establish a new unit within the FTC dedicated to overseeing transportation fuel markets, as well as direct the Energy Information Administration to collect the market data necessary to effectively monitor and police markets. The bill will protect consumers at the pump by increasing transparency, uncovering possible manipulation, and penalizing cheaters up to $2 million per day.
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