ghi^markets
Monday March 5 2007

What if Troutman Sanders hires Kelliher's chief of staff?

. . . what about Dan Larcamp?

The Atlanta Journal-Constitution (AJC) confirmed that Dan Larcamp has taken a job with Troutman Sanders, Southern Co's law firm.
        Does it matter?
        The AJC identified a whistle blower, as FERC's Rich Heidorn, who had complained to Rep Henry Waxman, D-Calif, that Larcamp had inserted himself into what the paper called "a sweetheart deal" favoring Southern.
        By that it was meant that he had decided to drop a case against Southern and settle after Chairman Pat Wood had left the commission.
        The Democrats -- especially Waxman -- may want to ask Larcamp about that.
        But the AJC has asked him and Larcamp replied that he can't be questioned for at least a year and faces a lifetime ban on anything he's worked on behind the scenes.
        Troutman Sanders Managing Partner Bob Webb was quoted by the AJC as being delighted to hire Larcamp.
        "He's a lawyer with great experience in the energy area. We represent a lot of energy clients," Webb was quoted as saying.
        What's the FERC view?
        David Ratcliffe, Southern Co CEO was at the last panel as FERC looked into improvements needed in southeastern power markets but he wasn't asked about Larcamp.
        Ratcliffe reminded the agency that Southern Co, "fully supports wholesale competition."
        The firm's goal, he added, is to reliably provide power "to retail and wholesale customers."
        When Southern is able to buy power cheaper than it can self- generate, it buys the power, he added.
        But Ratcliffe believes in more than one model to establish wholesale competitive markets and until one has been shown to be better than another FERC should allow regions to pick the one they like best.
        Critics have complained that Southern doesn't provide opportunities for competition.
        "At least in Southern Co's case the evidence is clear that competitive markets are robust and active.
        "In 2006 for example Southern Co purchased over 4 million mwh of power from third parties worth over $230 million to replace" generation Southern would have had to generate.
        Buying that power saved $23.5 million in 2006, he said.
        It's clear that EPSA CEO John Shelk doesn't see the wholesale market as the old-fashioned, natural monopoly "that justifies exclusive franchises traditional rate regulation.
        He reminded FERC that wholesale competition is the law of the land and that's a settled national policy.
        “Competitive suppliers have invested tens of billions of dollars in generators as Congress intended, but wholesale competition can't exist without access to consumers.
        He cited an interview with Dominion's CFO in the Wall Street Journal where his view was that a utility should not only get a return on capital spent but a profit too where a project fails.

QUOTE OF THE DAY: Wholesale market structures are a means to an end and that end is to provide benefits to end use retail customers... That (EPACT) is the law of the land... Let there be no mistake. NARUC as an organization, all 50 states and several other affiliates are supportive of open-access, non- discriminatory wholesale market structures. We are protective of the jurisdiction that is properly ours but there is no question of our support for functioning competitive wholesale markets.
        James Yancey Kerr, president of NARUC

        BOTTOM LINE: What does Larcamp issue really mean? We’re not attorneys.
        Certainly if Troutman Sanders approved the new job for Chairman Kelliher’s chief of staff it’s cricket.
        Will the move get the chairman in the soup with congressional Democrats? We suspect not.
        FERC may simply be too far down on Democratic radar screens.
        Besides, we can’t imagine anyone in the South standing up to Southern Co and certainly no one at FERC could or would -- especially after what happened to Pat Wood.
        It’s hard to imagine Larcamp not discussing his planned move with Kelliher and we assume that Kelliher gave his OK.
        The chairman then issued a news release praising Larcamp for his distinguished service.
        True, the move doesn’t look good but that’s how Washington works.
        Originally published in Restructuring Today on March 1, 2007