A new round of press has developed about Powhatan Energy Fund's assertive and very public defense of an on-going FERC market manipulation investigation. This one is particularly entertaining:
Two things that you can say about the Federal Energy Regulatory Commission, as a market regulator, are:
It produces the most incomprehensible prose of any market regulator, and
Its markets have an unusual tendency to be gamed in embarrassing ways.
I suspect these facts are related. I posit that almost nobody, including at the FERC or its various regional power markets, can actually figure out how those markets' rules work. So they work badly. And while you have to be very smart to figure them out -- say, at the level of Blythe Masters, or electrical engineering Ph.D. Alan Chen -- once you have figured them out, they become comically easy to game. FERC builds markets with so many bells and whistles and buttons and valves that some of the buttons end up having no function but to dispense money. If you can find those buttons, what you do is just keep pressing them until the FERC notices and gets mad at you and starts scolding you incomprehensibly.
My friend Scott in Mayberry refers to FERC's secret language as "FERCenese." It's possible that a secret decoder ring can only be earned by selling your soul. Or something.
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