FERC Issues 2021 Enforcement Report

On 18 November 2021, the Federal Vitality Regulatory Fee’s (FERC or Fee) Workplace of Enforcement (Enforcement) launched its 2021 Annual Report on Enforcement (FY2021 Report). The FY2021 Report offers an summary of Enforcement’s priorities. It summarizes actions taken by the three divisions inside Enforcement: Division of Investigations (DOI), Division of Audits and Accounting (DAA), and Division of Analytics and Surveillance (DAS).


In FY2021, Enforcement’s priorities stayed virtually the identical as in 2020:

  • Fraud and market manipulation;

  • Severe violations of Reliability Requirements;

  • Anticompetitive conduct; and

  • Conduct that threatens the transparency of regulated markets.

This yr, nonetheless, Enforcement added a brand new precedence associated to issues involving threats to the nation’s vitality infrastructure and related impacts on the surroundings and surrounding communities.


In the course of the November 2020 Fee open assembly, then-Commissioner Glick criticized the Fee’s enforcement efforts, which he perceived as missing. In 2020, the Fee opened solely six new investigations and reached three settlements totaling US$553,376. Commissioner Glick grew to become Chairman of the Fee in January 2021 and introduced shortly thereafter that vigorous enforcement could be one in all his priorities. For 2021, Enforcement reported that it opened 12 new investigations and negotiated settlements in eight investigations totaling US$6.4 million, illustrating the implementation of Chairman Glick’s precedence.

In FY2021, seven of the 12 new investigations opened arose from referrals by ISO and RTO Market Monitoring Items (MMUs). MMUs sometimes collaborate with Enforcement and make confidential referrals after they imagine {that a} market violation occurred. The Fee acquired 14 new MMU referrals (a few of which concerned multiple sort of violation or a number of topics), of which two concerned potential market manipulations, 11 concerned potential tariff violations, and 5 concerned potential misrepresentations prohibited by the Fee’s Obligation of Candor rule.


DOI and DAS employees spent vital efforts on the impacts of the February 2021 excessive winter climate occasion related to winter storm Uri (Winter Climate Occasion) that affected parts of ERCOT, SPP, and MISO. DOI ready briefs and stories associated to the Winter Climate Occasion, whereas DAS performed a complete evaluate of wholesale pure fuel and electrical energy market exercise to find out if market contributors engaged in market manipulation or different violations.


In 2010, the Fee issued revised penalty pointers permitting a company to scale back its culpability rating by favorable components, together with a compliance program. Out of the eight authorised settlements in FY2021, six included compliance monitoring necessities indicating the significance of a complete compliance program. DAA administers Enforcement’s audit, accounting, and varieties administration and compliance packages. DAA signifies probably the most strong compliance packages:

  • Equip employees and administration with enough coaching, training, instruments, and different assets to detect points promptly to right or forestall noncompliance;

  • Have efficient traces of communication and notify employees of requirements by well-publicized insurance policies and procedures;

  • Keep abreast of compliance traits by reviewing Fee orders and audit stories and incorporate these traits and different developments within the trade;

  • Have a delegated compliance officer and compliance committee charged with improvement and oversight of compliance actions and metrics that assess program effectiveness;

  • Actively contain senior administration and supply for the allocation of funds obligatory for compliance packages;

  • Actively contain inner audit and monitoring capabilities to routinely assess compliance with tariff provisions and Fee guidelines, orders, and rules, to foster a robust and sustainable tradition of dedication to compliance on an enterprise-wide foundation; and

  • Search steerage from the Fee as obligatory to make sure compliance, together with an efficient course of to self-report noncompliance recognized by inner oversight actions.

These suggestions are in line with the Workers White Paper on Efficient Vitality Buying and selling Compliance Practices that Fee Workers issued in November 2016.


The FY2021 Report reveals Chairman Glick’s prioritization of enforcement among the many Fee’s duties. There are a number of key takeaways highlighted within the report, in addition to the kinds of investigations which the Fee opened, and self-reports they highlighted.

  • Self-reporting stays vital. The report highlights 146 new self-reports which Enforcement acquired over the previous yr and notes that detection and remediation of violations stay hallmarks of profitable compliance packages. Enforcement closed the vast majority of self-reports with no motion as a result of the corporate promptly self-reported corrected the error, and supplied refunds in some cases.

    • Electrical Tariff/OATT violations. A number of firms self-reported tariff violations the place the utility inadvertently reported inaccurate era knowledge to an ISO/RTO or when it inadvertently scheduled era amount to an ISO/RTO that was in extra of the useful resource’s transmission capability.

    • Regulatory submitting violation. A number of entities made errors of their regulatory filings, violating Fee rules. For instance, a pure fuel firm self-reported it did not file an correct FERC Type No. 552 and an influence marketer self-reported errors in its Electrical Quarterly Experiences.

  • Renewable assets and capability market contributors acquired scrutiny. A number of self-reports and settlements spotlight Enforcement’s shut consideration to compliance with capability provide obligations and market affords. Renewable assets weren’t exempted from such scrutiny.

    • Terra-Gen, LLC, Docket No. IN21-7-000. The Fee authorised a settlement with Terra-Gen, LLC (Terra-Gen) after Enforcement investigated whether or not Terra-Gen submitted false or deceptive data to CAISO in regards to the capabilities of its wind-powered electrical era facility and whether or not Terra-Gen violated the CAISO tariff by deviating its wind farms’ output from CAISO’s dispatch directions.

    • Federal Energy Act Part 205 violation. The proprietor of a number of wind tasks self-reported its failure to self-certify a venture as a Qualifying Facility (QF) earlier than making wholesale energy gross sales. The proprietor submitted a FERC Type No. 556, certifying the venture as a QF and paid refunds on revenues collected on the wholesale energy gross sales made throughout the interval when the venture was not licensed as a QF. Workers closed the self-report with out additional motion as a result of the violation was unintentional, and the proprietor paid refunds.

  • A number of older circumstances stay in court docket. Enforcement employees continues to litigate a number of older circumstances which is able to present judicial precedent on the scope of Enforcement’s jurisdiction and authority. These embody:

    • FERC v. Powhatan Vitality Fund LLC (E.D. Va.). In 2015, the Fee assessed civil penalties of just about US$30 million in opposition to Powhatan Vitality Fund LLC, a person dealer and two affiliated funds for violating the Fee’s anti-manipulation rule by partaking in allegedly fraudulent Up-To Congestion trades within the PJM Interconnection, LLC market. Shortly thereafter, Enforcement employees filed a petition within the U.S. District Courtroom for the Japanese District of Virginia to implement the Fee’s order. On 11 February 2020, the Fourth Circuit upheld the District Courtroom’s opinion recognizing that Congress conditioned FERC’s proper to deliver an motion in federal district court docket after statutorily mandated measures, and the statutory limitation interval commences solely after these actions happen. The Fourth Circuit remanded the case to the District Courtroom which set a trial date for 22 August 2022.

    • FERC v. Vitol Inc. and Federico Corteggiano, (E.D. Cal.). In 2019, the Fee assessed penalties of US$2.5 million in opposition to Vitol Inc. and a person dealer for violating the Fee’s anti-manipulation rule and Part 222 of the FPA after promoting bodily energy at a loss within the CAISO day-ahead market to doubtlessly profit CRR positions. On 6 January 2020, Enforcement employees filed within the U.S. District Courtroom for the Japanese District of California to implement the Fee’s order. The events have filed varied motions that stay pending with the Courtroom.

 Oretha A. Manu additionally contributed to this text.

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