By Tom Doggett
WASHINGTON (Reuters) - The chairman of the U.S. Senate's energy committee on Tuesday backed the Federal Energy Regulatory Commission's legal action against defunct hedge fund Amaranth Advisors for market manipulation, saying the agency was carrying out the will of Congress.
A federal court is looking at whether FERC or the Commodity Futures Trading Commission has the authority to punish Amaranth after both agencies filed charges against the fund for allegedly manipulating natural gas futures prices.
Amaranth asked the court to rule that the CFTC, and not FERC, has the sole authority to regulate the gas futures market, where the fund's trading took place, and to strike down the FERC charges.
FERC regulates the buying and selling of natural gas that is transported by pipelines across state lines, while the CFTC regulates commodity exchanges, including the New York Mercantile Exchange (NMX.N: Quote, Profile, Research, Stock Buzz), which lists contracts for the delivery of natural gas in the future at specified prices.
Jeff Bingaman, who heads the Senate Energy and Natural Resources Committee, said FERC is carrying out the broad energy bill Congress passed in 2005 that gave the agency new authority to go after the manipulation of natural gas and electric markets and impose big fines on the wrongdoers.
Bingaman told the Reuters Environment Summit in Washington that Congress intended that "FERC had the authority it needed to go after any price manipulation, any manipulation, that resulted in affecting the price of (energy) commodities that consumers are having to pay."
"If that happens through manipulation of the futures market, then so be it," he said.
However, NYMEX President James Newsome told Congress last week that FERC's action has caused confusion and regulatory uncertainty among market participants. Continued...
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