A decade-old policy on issuing Notices of Alleged Violations (NAV) regarding investigations was rescinded by FERC Thursday.
At its regular monthly meeting in Washington, DC, the Federal Energy Regulatory Commission gave unanimous approval to a motion to end the NAV policy, saying it is no longer warranted [PL10-2-003].
First adopted by FERC in 2009, the policy authorized the issuance of NAVs after the subject of an investigation had the opportunity to respond to preliminary findings by the Office of Enforcement. The policy was controversial because it departed from the Commission’s long-established position of not disclosing investigations, or the names of those individuals and companies being investigated, to the public.
“Under the NAV policy, the Commission exercised its discretion to disclose enforcement investigations at an earlier phase in the investigative process, prior to a settlement or Commission order,” said Chairman Neil Chatterjee. “The Commission’s expectation, at the time, was that issuing NAVs would create benefits by increasing transparency and creating opportunities for the Commission to gain useful information.
“But the Commission also recognized that those benefits must be weighed against the importance of protecting investigative subjects’ confidentiality. As a result, the Commission committed to monitoring the NAV procedures and reconsidering the policy after gaining more experience with it. As today’s order explains, we’ve done just that. We’ve reviewed the policy and after years of experience have concluded that the expected benefits of the NAV policy generally have not materialized.”
FERC said it has also developed “more informative methods of providing transparency to industry about investigations and enforcement actions, including providing guidance through orders on settlement agreements, orders to show cause and orders assessing civil penalties.”
The NAV policy had been opposed by a trio of attorneys who formerly worked for FERC and helped it conduct investigations into alleged wrongdoing, who argued that the policy was ineffective and often unfair to the individuals and companies being investigated.
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