FERC reissues guidelines for expanded civil penalties power

The Federal Energy Regulatory Commission has reissued its new civil penalty guidelines after a five-month suspension of the rules for further public comment.

FERC had suspended the guidelines in April, only a month after their original issuance.

The new guidelines outline how FERC will wield new civil penalty authority granted to the agency by the Energy Policy Act of 2005. The policy statement guidelines are modeled on parts of the United States Sentencing Guidelines, with modifications specific to FERC issues.

FERC adopted the guidelines after four years’ experience with its expanded authority under the 2005 energy act. The act expanded FERC power under the Federal Power Act and extended FERC authority to cover violations of the Natural Gas Act.

The commission said the U.S. Sentencing Guidelines provide an effective analytical model that fits commission purposes because they focus on the same factors that are at the heart of FERC’s enforcement authority, such as seriousness of the violation and efforts to remedy the violation.

“The modified penalty guidelines will base penalties on the same factors as those in existing enforcement policy statements, but will be applied with more focus by assigning specific and transparent weight to each factor,” the agency said.

The guidelines will apply to penalties FERC assesses for violations of its requirements, though the commission retains the discretion to depart from them when it deems it appropriate. FERC’s Enforcement staff continues to have discretion to close investigations and self-reports for violations that do not warrant sanctions.

The guidelines base penalties on the greater of a dollar amount listed in a penalty table, the gain to the offender from the violation, or the loss caused by the violation. They also include a “culpability score” based on an offender’s past conduct and efforts to remedy the violation.

FERC’s revised policy statement on penalty guidelines may be obtained from FERC’s Internet site under www.ferc.gov/whats-new/comm-meet/2010/091610/M-1.pdf. FERC’s Enforcement staff is to convene a technical conference in a year to discuss how the new guidelines have worked and to invite comments and questions.

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