Prior to the Energy Policy Act of 2005 (EPAct), FERC was “sort of like a snaggletooth tiger,” but it has a “full mouth of teeth now” to enforce its rules and regulations, said the agency’s top cop last Wednesday.
“FERC [Federal Energy Regulatory Commission] has joined the ranks of federal enforcement agencies…Now its ability to enforce its rules and orders…is as great as any other federal agency in the United States government, and, in most instances, greater,” said Susan Court, director of FERC’s Office of Enforcement (OE).
With double the OE staff from five years ago, there is “much more of a presence of market monitoring than there ever was before,” she told reporters at Platts’ Energy Podium briefing in Washington, DC. FERC’s monitoring efforts are “evenly split” between the natural gas and electricity markets, Court said.
“We have adequate tools” to monitor the gas futures markets, as well as the physical markets, she noted. In addition, Court said FERC, along with several other agencies, is keeping tabs on energy market speculators. “I think that different agencies are watching [speculators] from their perspectives.”
While the level of audits has remained steady, the Commission is conducting more operational audits than financial audits, Court noted. “We’re not looking at the money,” but rather the agency is more interested in whether regulated energy companies are complying with FERC rules, she said.
As a result of EPAct, the Commission now has the authority to impose civil penalties of up to $1 million per day for the duration of a violation, and it has the authority to bar the manipulation of agency rules, energy prices and conditions to shield market participants from fraudulent activity. FERC’s anti-manipulation power extends to all entities, not just those regulated by the Commission. The agency also is moving toward greater transparency in energy markets.
With respect to transparency, the Commission has issued a notice of proposed rulemaking requiring intrastate natural gas pipelines to post daily capacities and volumes of gas flows on their systems similar to interstate pipelines, and sellers and buyers of more than de minimis amounts of natural gas to report the numbers and volumes of relevant transactions for the previous calendar year, Court said (see NGI, April 23). This information would give FERC an idea of the size of the wholesale natural gas market in the U.S. for the first time, she noted.
She confirmed that FERC has yet to exert its anti-manipulation authority. “There’s no FERC case law yet, so we’re at the threshold of developing that case law” on this issue, she said. “We do have some case law from other jurisdictions that we can look at.”
©Copyright 2007Intelligence Press Inc. All rights reserved. The preceding news reportmay not be republished or redistributed, in whole or in part, in anyform, without prior written consent of Intelligence Press, Inc.
© 2020 Natural Gas Intelligence. All rights reserved.
ISSN © 2577-9877 | ISSN © 1532-1266 |