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A Mississippi Business Journal Q&A

Deregulation not a mistake, FERC chairman Hebert says

WASHINGTON — On Jan. 22, President George W. Bush named Mississippi native Curt Hebert Jr. chairman of the Federal Energy Regulatory Commission (FERC). President Clinton initially nominated He-bert, a Republican, on Oct. 23, 1997, to serve on the commission.

The 38-year old attorney from Pasca-goula, who graduated with a bachelor’s degree from the University of Southern Mississippi in 1985, and earned a law degree from the Mississippi College School of Law in 1990, served as commissioner of the Southern District of the Mississippi Public Service Commission, and was commission chairman from 1994 to 1996. A former member of the Mississippi House of Representatives, Hebert served as chairman of the Oil and Gas Committee and chairman of the Ways and Means Severance Subcommittee.

Prior to FERC, Hebert served on the Electricity Committee of the National Association of Regulatory Utility Commissioners and was president of the Southeastern Association of Regulatory Utility Commissioners.

In his new position, Hebert holds the most important “power” position in the U.S. A free market capitalist, his views will greatly affect the future of the power industry. No, the problems in California haven’t caused him to rethink the push for deregulation and yes, new merchant power plants popping up around the Southeast will provide long-term benefits, he said.

Last week, the Mississippi Business Journal discussed the future of nuclear power plants, challenges of deregulation, benefits of the new natural gas pipeline from Pascagoula to Florida and more with Hebert.

Mississippi Business Journal: How will the FERC sustain its encouragement of deregulation?

Curt Hebert: We will give confidence to the market that we won’t interfere every time someone complains. Also, we will revise prices sparingly after the fact. This will encourage new investment to bring down prices.

MBJ: What have we learned from the deregulation problem in California, and how can we stop the same problems from occurring in other parts of the country?

CH: We can’t deregulate halfway. I think the rest of the country will learn from that experience.

MBJ: Large businesses are pleased with the idea of deregulation, but what kind of protection would residential users have from “unnatural” market conditions that cause huge spikes in their cost of power?

CH: We will let the market work. Most of the “unnatural” conditions are man-made by regulators who don’t back up rhetoric with action.

MBJ: Can the idea of deregulation be saved in the residential user’s perception?

CH: Yes. Once we show how a real market works, people will see benefits. For example, in the phone industry, no one would have imagined cell phones and call waiting. None of that would have happened under regulation.

MBJ: How can the commission make the wholesale power markets more competitive?

CH: We can encourage a market through incentive-based, for-profit transmission companies.

MBJ: Now that you and Glenn L. McCullough Jr., former mayor of Tupelo, now director of the Tennessee Valley Authority (TVA), are in national positions, any idea what plans are in store for the TVA?

CH: FERC does not regulate TVA, but I have had great conversations with Glenn. He indicates that he wants TVA to participate in the new competitive market. I expect we will all like what Glenn has in mind.

MBJ: How will the new natural gas pipeline from Pascagoula to South Florida across the Gulf of Mexico affect Mississippi gas users?

CH: It should increase supply for Mississippi users and provide increased access to reasonably priced natural gas. (Whether or not the more populated areas of Florida will take priority in obtaining those stocks) will be addressed by contracts with pipelines.

Contact MBJ contributing writer Lynne Wilbanks Jeter at lwjeter@yahoo.com or (601) 853-3967.


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