In a wide-ranging session with reporters yesterday, Commissioner Suedeen Kelly of the U.S. Federal Energy Regulatory Commission (FERC) endorsed commission oversight of renewable energy standards. Addressing a Platts Energy Podium newsmaker event in Washington, the commissioner also maintained that FERC's penalty regime was more complicated than those of other regulatory agencies.

Levying penalties on power companies that flout FERC rules is a far more complicated process than assessing penalties in other parts of the energy sector, including on nuclear power plants and in enforcing environmental rules, Kelly said in response to suggestions at a recent public meeting that the commission might have something to learn from other federal agencies.

The Nuclear Regulatory Commission (NRC) uses a tiered regime to penalize nuclear power plants for bad behavior, and to a lesser extent the Environmental Protection Agency uses a similar method of assessing penalties matched to the severity of a violation. "At the NRC, it's almost like sentencing guidelines, everything is outlined: This is what the infraction is, this is the penalty," Kelly said. "The difficulty we have with adopting that policy is that the rules we implement are voluminous."

Kelly said power tariff regulations for each regulated company require a more subjective evaluation of violations. "Our world of enforcement is bigger than the NRC's world of enforcement," she said. "It is not as precise as the NRC's is for nuclear power plants."

FERC can impose penalties of up to $1 million per day for each violation of regulations and for manipulating energy markets -- an authority Congress granted it in 2005 in the wake of the Enron collapse and the Western energy crisis.

Siding with others on the commission, particularly Chairman Joseph Kelliher, Kelly insisted that FERC was acting well within its purview in high-profile enforcement cases involving Amaranth Advisors and Energy Transfer Partners. She also pronounced herself "surprised" that the Commodity Futures Trading Commission had publicly challenged FERC's enforcement authority.

Kelly also believes the agency would be the logical administrator of any federal renewables portfolio standard (RPS). The commission's jurisdiction over the transmission projects that would bring renewable resources on-line provides the "nexus" for the agency to fill that oversight role, she said.

After several failed attempts, Congress is trying again this year to enact an RPS that would require electric utilities nationwide to supply a fixed portion of their demand with renewable energy by a future date.

Focusing on the need to get more renewable resources into the supply mix, Kelly also said the commission is taking a close look at its interconnection policy. With more than 220 wind projects in Midwest Independent Transmission System Operator's interconnection queue, "you just can't do that one by one by one," she said of the current sequential study process.