FERC’s 2020 Enforcement Report Shows Fewer Investigations Opened, Resolved
The Federal Energy Regulatory Commission (FERC or the Commission) Office of Enforcement (OE) issued its 2020 Report on Enforcement on November 19. The report provides a review of OE’s activities during fiscal year 2020 (FY 2020), covering October 1, 2019, through September 30, 2020. At bottom, FERC opened and closed significantly fewer investigations this year as compared to the past three, likely due to the ongoing coronavirus (COVID-19) pandemic.
The report reveals likely areas of focus for FERC enforcement in the coming year and provides guidance to the industry based on the wide variety of enforcement matters that are otherwise nonpublic by synthesizing some of the more disparate developments from audits, market surveillance, and other enforcement activities for the benefit of industry stakeholders.
The pandemic shaped FERC’s enforcement activities during the period. In response to the pandemic, FERC announced in April 2020 that it would exercise prosecutorial discretion and assist regulated entities in managing enforcement- and compliance-related burdens for the duration of the pandemic. As the 2020 Report notes, some of these accommodations included suspending new audits until August 2020, postponing contacting entities regarding surveillance inquiries except for those involving market behavior that pose significant risk of market harm, and allowing entities to delay for 60 days the submission of self-reports of inadvertent errors that resulted in no significant harm.
FERC’s enforcement priorities during FY 2020 focused on fraud and market manipulation, serious violations of the Commission-approved North American Electric Reliability Corporation (NERC) Reliability Standards, anticompetitive conduct, and conduct that threatens the transparency of regulated markets. OE explained that its activities and objectives are consistent with FERC’s FY 2018-2022 Strategic Plan, which “sets forth a mission to account for significant changes in energy supply due to a number of factors, such as the increased availability of domestic natural gas and the emergence and growth of new energy technologies.”
In FY 2020, OE opened six new investigations, resolved eight ongoing investigations without further action, and negotiated three settlements totaling more than $550,000 in penalties and disgorgement….