Retribution will be more expensive for companies violating FERC’s rules in the future, according to a final rule issued by the Commission last Monday. The rule adjusts certain of the Federal Energy Regulatory Commission’s penalties by 10% to cover inflation.

FERC was reprimanded by the General Accounting Office (GAO) last month for neglecting to seek inflation adjustments to its civil penalties for a number of years. The GAO estimated that FERC has missed out on the opportunity to boost certain civil penalties by 15% to 16% since the early 1990s.

The Debt Collection Improvement Act of 1996 (DCIA) required the Commission to review penalties to keep them up to date with inflation at least every four years. The first adjustment, however, can be no more than 10%.

Adjustments to penalties under the act are as follows: 1) knowing violation of any provision, rule or order under the Natural Gas Act (maximum penalty is $5,000 per violation; last set or adjusted for inflation in 1978; now is increased to $5,500); 2) willful failure to comply with any order, rule or FERC regulation, or failure to submit any required document or information or to appear in response to FERC subpoena in relation to the Federal Power Act (maximum penalty of $1,000 per violation; last set or adjusted for inflation in 1935; is now increased to $1,100); 3) failure to comply with any rule, regulation, condition of a license, permit, or exemption under subchapter 12 of FPA (maximum penalty $10,000 per day; last set or adjusted for inflation in 1986; is now increased to $11,000 per day); and 5) violation of section 824(j) on wheeling authority, orders requiring interconnection or wheeling, or section 825(m) on sales by exempt wholesale generators of FPA (maximum fine of $10,000 per day; last set or adjusted in 1992; is now increased to $11,000 per day).

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