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Top U.S. Regulator of Energy Quitting

FERC chairman faced confirmation trouble in Senate

Washington -- Patrick Wood, the nation's top energy regulator who advanced President Bush's free-market policies during a tumultuous period in energy markets, announced Wednesday he would resign his position later this spring.

Wood, the chairman of the Federal Energy Regulatory Commission, became a household name in California when he joined the agency in the spring of 2001 and immediately voted to order price caps, easing the energy crisis that had spawned rolling blackouts and sky-rocketing power prices across the state.

But the 42-year-old Texan, who was heralded as a tougher watchdog over energy markets than his predecessor, saw his relations with California officials sour, as the agency declined to order the full refund the state claimed it was owed after paying prices inflated by market manipulation.

He lost support even among some Republicans in Congress after pushing aggressively to boost competition in regional energy markets -- infuriating some utilities that hold near-monopoly power in certain markets, especially in the South. Analysts said he would have had a tough time being confirmed by the Senate to a second four-year term.

Wood sent his letter of resignation to the president Tuesday, saying he was ready to return with his family to Texas, where he was born and raised, and where he served as an appointee of then-Governor George Bush as the state's top energy and telecommunications regulator.

"It has been a joy and an honor to be your point man on industry restructuring and oversight," Wood wrote.

His resignation is effective June 30, the end of his four-year term. Commissioner Joseph Kelliher, a Republican lawyer who worked on Vice President Dick Cheney's energy task force and was a top aide to former Energy Secretary Spencer Abraham, is seen as a likely successor.

Wood, a Harvard-trained lawyer, said Wednesday that recent family news made his decision for him: His wife found out she is pregnant, and the couple want a more settled life in Austin or Houston.

"It was decided by a higher power," Wood joked. "The child is due in September. I needed to get on with my life."

He said he had not landed a new job, but he suggested he was more likely to move into the private sector than jump into politics. Some have suggested he had his eye on a statewide office in Texas.

"Every little boy dreams of being governor of Texas," Wood said, "but this little boy grew up, and he doesn't like to raise money for anything other than the March of Dimes."

Wood still has a passion for energy policy, he said, but realizes it is time for a new commission chair to lead the restructuring of energy markets.

"He had to have known that he was going to have a really hard time making it through the Senate," for a second term, said Chris Newkumet, chief editor of Inside FERC, a publication devoted to covering the agency. "It only takes one senator to hold up an appointment. Pat probably had 20 senators who would want to hold him up."

Wood was confirmed as a commissioner in May 2001, but he didn't take over as chairman until September 2001. But it was his appointment, along with the addition of Commissioner Nora Mead Brownell, that led to a landmark vote to order price caps in June 2001, which calmed energy markets and signaled a new direction at the agency. Within months, then-Chairman Curt Hebert stepped down.

Wood's reputation as an independent regulator was sometimes questioned by critics because of his association with former Enron Chairman Ken Lay, who had recommended his appointment to the president. After Enron's collapse, he was asked at a hearing by former Sen. Ernest "Fritz" Hollings, D-S.C., whether he was "Kenny Boy's boy" -- a reference to Bush's nickname for the Enron executive.

Woods replied: "I was Gov. Bush's man."

While Wood shared the same pro-deregulation bent as the president, he was widely credited with transforming the agency into a tougher market watchdog. He created a new office of market monitoring and oversight to watch for any hints of misbehavior.

He also pushed the commission to speed domestic energy projects, approving 4,154 miles of new interstate natural gas pipelines as well as 128 billion cubic feet of new natural gas storage to help avoid the type of supply shortages that plagued California.

But West Coast lawmakers were angered by decisions by Wood and the commission that limited the size of the refunds California consumers could receive for an alleged overcharges by energy firms. Four years after the energy crisis, the case is in still in litigation.

Wood also clashed with state officials over the siting of liquefied natural gas terminals on the West Coast as well as his crusade to push California and other states into regional transmission organizations to foster competition in wholesale power markets. California and many other states have opposed relinquishing their authority over state utilities to regional or federal regulators.

"He said what he was going to do, and he did it -- and that ruffled some feathers," Newkumet said.

Zachary Coile