In its March 2005 report to the House Energy and Commerce Committee, the Federal Energy Regulatory Commission (FERC) repeated its request for enhanced civil penalty authority. When Congress passed the Energy Policy Act of 2005 (EPACT), it granted FERC all the authority that it had requested, and more. The new director of FERC’s Office of Market Oversight and Investigations (OMOI) called the new penalty authority “awesome.”1
EPACT changes the entire risk calculus for “any entity” (the law’s language) doing business in FERC jurisdictional markets. We believe that an effective compliance program has become essential for “any entity” subject to EPACT provisions. We also believe that charges about confusing signals and excessively restrictive requirements are alarmist and inaccurate. With proper executive leadership, a compliance program can improve business performance, reduce regulatory risk, and maintain necessary business flexibility.
Increased Penalty Authority
EPACT “upped the ante” for market participants by significantly expanding FERC’s authority to punish violations of the Federal Power Act (FPA), Natural Gas Act (NGA), Natural Gas Policy Act (NGPA), and FERC’s orders and regulations.