FERC modifies its enforcement guidelines.
Michel Marcoux is a partner in Bruder, Gentile & Marcoux LLP, a law firm in Washington, D.C.
In 2005, the U.S. Congress increased Federal Energy Regulatory Commission (FERC) penalty authority over the country’s natural gas pipeline and electric utility industries. Five years later, FERC implemented September 2010 modified policy guidelines (guidelines) to assess civil penalties under that authority, once it has determined that a violation has occurred and a penalty is warranted. These civil penalty guidelines follow on the heels of proposed such guidelines issued in March 2010 that were the subject of an earlier article (See “Penalty Predictability,” Fortnightly, July 2010.) The final guidelines, summarized here, merit industry scrutiny.
The Energy Policy Act of 2005 (EPAct 2005) gave FERC greater civil and criminal penalty authority. For example, gas and electric industry violators face these maximum civil monetary penalties: Under the Natural Gas Act (NGA)—$1 million per day per violation for as long as the violation continues; under the Natural Gas Policy Act of 1978 (NGPA)—$1 million for any one violation; and under the Federal Power Act (FPA)—$1 million for each day that such violation continues.1 FERC’s Sept. 17, 2010, revised policy statement and attached penalty guidelines2 modify previously proposed guidelines in important ways.