FERC suspends guidelines for expanded civil penalties power

The Federal Energy Regulatory Commission has suspended its new civil penalty guidelines pending further public comment.

FERC issued the new guidelines March 18, outlining how it will wield new civil penalty authority granted to the agency by the Energy Policy Act of 2005. (HydroWorld 3/25/10) The policy statement guidelines are modeled on parts of the United States Sentencing Guidelines, with modifications specific to FERC issues.

Less than a month later, on April 15, the commission issued an order suspending the new guidelines and declaring its March 18 action “as interim in this proceeding.” FERC had conducted three workshops on the guidelines before it suspended them.

“The commission has determined that the public interest would be served by affording interested entities a broader opportunity to comment on the penalty guidelines before issuing a final order and putting them into effect,” FERC said.

It invited comments until June 14.

FERC said March 18 it adopted the guidelines after nearly four years’ experience with its expanded authority under the 2005 energy act. (HydroWorld 10/19/09) The act expanded FERC power under the Federal Power Act and extended FERC authority to cover violations of the Natural Gas Act.

“This approach promotes consistency by basing the penalty calculations on a set of uniform factors that are weighted similarly for similar types of violators,” the commission said. “The penalty guidelines also provide specific credit to companies for self-reporting violations and for implementing robust compliance programs, thus further encouraging compliance by the industry.”

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.

The civil penalty guidelines may be obtained from FERC’s Internet site under www.ferc.gov/whats-new/comm-meet/2010/031810/M-1.pdf.

For more FERC news, click here.

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