The Federal Energy Regulatory Commission ("FERC") Office of Enforcement ("OE") issued its 2017 Report on Enforcement (see also FERC Staff Presentation on Annual Report). The Report includes enforcement priorities for Fiscal Year 2018 and a review of Fiscal Year 2017 activities for each of the OE's divisions.
For Fiscal Year 2018, the OE stated its intention to maintain the same priorities as in previous years, including a focus on (i) fraud and market manipulation, (ii) serious violations of reliability standards, (iii) anticompetitive conduct, and (iv) conduct that threatens market transparency. The OE outlined progress in the following four Divisions:
- The Division of Investigations ("DOI") opened twenty-seven new investigations. Sixteen investigations were closed with no action or through a settlement. Negotiated settlements resulted in the recovery of over $51 million in civil penalties and over $42 million in the disgorgement of alleged profits.
- The Division of Audits and Accounting conducted 11 audits of oil pipelines, electric utilities, and natural gas companies, resulting in 301 recommendations for corrective action, and refunds and recoveries totaling $13.3 million.
- The Division of Energy Market Oversight continued an analysis of market fundamentals and improved capabilities for detecting anticompetitive outcomes and anomalies that may indicate an exercise of market power.
- The Division of Analytics and Surveillance ("DAS") provided the DOI with support on approximately 50 investigations. The DAS regularly screened the wholesale natural gas and electricity markets to detect market anomalies, and referred identified instances of misconduct to the DOI for investigation.
The Report contains additional analyses of enforcement actions and related activities for each of the four divisions.
Commentary / Mark R. Haskell
For the first time, the annual report discusses market surveillance activities by the FERC Division of Analytics and Surveillance that did not result in referral to the FERC Division of Investigations. This is a significant step toward increasing the transparency of the FERC enforcement processes. This new information also can help industry participants to better understand how FERC approaches investigations.
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