New technologies—and new expectations—require taking a fresh look at the institutions and practices that have provided reliable electricity for the past century. Collective action is needed to...
Bringing fairness to FERC enforcement.
violations in FERC’s view. The specific violation characteristics concern the risk of loss in eight stages, from a low risk of minor harm ( i.e., no base violation level increase) to a high risk of extreme harm ( i.e., add 16 levels, for a total violation level of 32).
Also, gas or electric industry ch. § 2B1.1 violations involving fraud, market manipulation, anti-competitive conduct, or violations of rules, tariffs, and orders, carry a base violation level of 6, with specific violation characteristics for dollar loss that increase the violation level. The 16 stages for loss range from $5,000 or less ( i.e., no level increase) to more than $400 million ( i.e., add 30 levels). A violation involving greater quantities of gas or electricity will add two, four or six levels to the violation depending on the volume of loss. 6 A violation continuing for more than 10, 50, or 250 days can increase the violation level by two, four or six levels, respectively. A FERC official has explained that the nature of ch. § 2B1.1 violations ( e.g., fraud, market manipulation, etc.) makes it more likely their lower base violation level of 6 readily will increase for those considerations of loss, quantity, or duration. 7 Also, when a total violation level is less than 16 but the violation involved conduct presenting a serious threat to market transparency, the violation level can increase to 16.
Last, ch. § 2C1.1 violations involving misrepresentations and false statements to FERC or its staff have a base violation level of 18. Specific violation characteristics concern substantial interference with the administration of justice ( i.e., add three levels); and destruction, alteration, or fabrication of a substantial number of records, documents, or tangible objects; selection of essential or especially probative records, documents, or tangible objects for destruction or alteration; or a violation otherwise extensive in scope, planning, or preparation ( i.e., add two levels).
Three more steps derive a final penalty fine range:
• When the final violation level is set, then the base penalty is identified, which is the greater of the ch. § 1C2.2(b) violation level penalty table dollar amount (corresponding to the final violation level), or the pecuniary gain to the organization from the violation, or the pecuniary loss from the violation caused by the organization. 8 FERC’s practice of requiring disgorgement of unjust profits is not affected, and FERC can enter disgorgement orders for such gains, plus interest.
• Calculate a ch. § 1C2.3 culpability score. The base culpability score is five, to be adjusted up or down for these six considerations: 1) whether high-level personnel participated in, condoned, or were willfully ignorant of the violation (larger organizations receive greater additions to the base culpability score); 2) whether the organization has a prior history of committing violations. Violations within the last five years add more to the base culpability score than do violations within the last six to 10 years; 3) whether a judicial order or injunction, or one by FERC or another federal or state enforcement