This White Paper, Implementation of the Federal Energy Regulatory Commission’s (FERC) Enforcement Authority, expresses the collective views of a broad brange of energy trade associations regarding current enforcement policy and activities of the Federal Energy Regulatory Commission (FERC or the Commission). The White Paper supports for the spirit of FERC’s enforcement actions, but calls on FERC for greater clarity in its policies, rules, and processes. The white paper offers a constructive analysis to support the Commission’s use of its enforcement authority to foster a culture of compliance by market participants. The Commission must deter those who might be inclined to choose a different path, facilitate self-reporting, ensure that the assessment of civil penalties fits the violation, and avoid cilling legitimate market behavior.
The energy trade coalition represents both the electric and gas industries and is comprised of the American Gas Association (AGA), Edison Electric Institute (EEI), Electric Power Supply Association (EPSA), Independent Petroleum Association of America (IPAA), Interstate Natural Gas Association of America (INGAA), Natural Gas Supply Association (NGSA), and the Process Gas Consumers Group (PGC).
The coalition provides a number of recommended steps that FERC can take immediately to promote compliance by market participants, which are discussed in detail in the white paper. Highlights of the recommendations include:
· Clarifying, simplifying, and codifying certain Commission policies and rules to reduce regulatory uncertainty
· Measuring the success of the Commission’s enforcement program not by the number and amount of penalties, but by the degree to which the clarity of its rules and transparency of its policies facilitate compliance
· Providing timely responses to informal and formal requests for assistance in interpreting regulations
Bill Massey and Bob Fleishman of Covington & Burling LLP prepared this white paper on behalf of the seven electricity and natural gas industry trade associations.