On June 8, 2018, FERC approved a Stipulation and Consent Agreement (“Settlement”) between the Office of Enforcement (“OE”) and Duke Energy Corporation and its public utility operating subsidiaries (“Duke”).  OE claimed that Duke violated FERC regulations when it failed to accurately describe certain information in the transmission studies submitted in support of its merger with Progress Energy, Inc. (collectively, “Applicants”).  FERC determined that the Settlement was fair and reasonable and resolved all outstanding claims and proceedings between OE and Duke.  Continue Reading FERC Approves Civil Penalty Against Duke for Submitting Inaccurate Data in Section 203 Proceeding

On May 4, 2018, the U.S. Court of Appeals for the Second Circuit (“Second Circuit”) dismissed a private suit filed by a group of investors (“Plaintiffs”) seeking damages for Total Gas & Power North America, Inc., Total S.A., and Total Gas & Power Limited (collectively, “Total”) for allegedly manipulating natural gas markets at four western trading hubs.  In doing so, the Second Circuit held that Plaintiffs – who did not trade at the four western trading hubs at which Total traded, but argued that Total’s trading impacted Plaintiffs’ trading at the Henry Hub – established constitutional standing but failed to plead sufficient facts to establish a plausible substantive cause of action. Continue Reading Second Circuit Dismisses Private Suit Against Total for Alleged Gas Market Manipulation

On April 25, 2018, FERC approved a Stipulation and Consent Agreement (“Settlement”) between the Office of Enforcement (“OE”) and PSEG Resources & Trade, LLC (“PSEG).  The Settlement resolves an investigation into whether PSEG violated certain sections of the PJM Interconnection, L.L.C. (“PJM”) Tariff, Operating Agreement, and FERC’s Market Behavior Rule, when PSEG submitted incorrect cost-based offers into the PJM energy market between 2005 and 2014.  FERC determined that the Settlement was a fair and equitable resolution of the matter, and that the penalty imposed upon PSEG reflected the nature and seriousness of the violations.  Continue Reading FERC Approves Settlement with PSEG Subsidiary over Allegations of Inaccurate Cost-Based Offers in PJM Energy Market

On April 10, 2018, FERC approved a Stipulation and Consent Agreement (“Settlement”) among the Office of Enforcement (“OE”), ETRACOM LLC (“ETRACOM”), and Michael Rosenberg (together, with ETRACOM, “Respondents”) as in the public interest.  OE claimed that Respondents violated federal law and FERC’s rules against anti-manipulation in the California Independent System Operator Corp. (“CAISO”) wholesale electric market.  FERC determined that the Settlement was fair and reasonable and resolved all outstanding claims and proceedings between OE and the Respondents. Continue Reading FERC Approves Settlement with ETRACOM for Market Manipulation Allegations

On February 27, 2018, FERC staff completed an inquiry in which they did not uncover any evidence of anticompetitive withholding of natural gas pipeline capacity on Algonquin Gas Transmission, LLC pipeline (“Algonquin”) by New England shippers.  The inquiry initially arose from allegations made by the Environmental Defense Fund (“EDF”) that Eversource Energy (“Eversource”) and Avangrid, Inc. (“Avangrid”) were artificially constraining capacity on the Algonquin.  After finding that Eversource and Avangrid did not engage in anticompetitive behavior, FERC staff will not take any further action on the matter. Continue Reading FERC Staff Inquiry Concludes No Withholding of Natural Gas Pipeline Capacity in New England

On January 25, 2018, as amended on January 31, 2018, FERC Office of Enforcement Staff (“OE Staff”) answered BP America Inc., BP Corporation North America Inc., BP America Production Company, and BP Energy Company’s (collectively, “BP”) arguments that FERC must dismiss its order assessing civil penalties and disgorgement against BP for violating FERC’s anti-market manipulation rule due to the five-year statute of limitations for civil penalties.  Among other things, OE Staff argued that (1) enforcement actions under the Natural Gas Act (“NGA”) are distinct from the enforcement process under the Federal Power Act (“FPA”), and thus similar federal district court precedent in the FPA context is inapplicable to BP; and (2) FERC’s issuance of disgorgement is more remedial than punitive and thus not subject to the statute of limitations. Continue Reading FERC Enforcement Staff Argues Claims Against BP Are Not Time-Barred due to Differences Between NGA and FPA

On December 28, 2017, the U.S. District Court for the Eastern District of Virginia (“District Court”) held that Powhatan Energy Fund LLC, Dr. Houlian Chen, and two funds owned by Dr. Chen (collectively, “Respondents”) are entitled to a full civil trial in FERC’s action to enforce penalties against Respondents for allegedly manipulating electricity markets.  Notably, the District Court held that a plenary civil trial was required because Respondents elected to forego a formal hearing before a FERC Administrative Law Judge (“ALJ”).  In lieu of a hearing before a FERC ALJ, Respondents instead elected to have FERC assess penalties upon finding a violation occurred, based on the investigative record. Thus, according to the District Court, a proper administrative record was never developed and Respondents were never permitted an opportunity to conduct their own independent discovery. Continue Reading Virginia District Court Orders Discovery in FERC Enforcement Case Against Powhatan

On December 11, 2017, BP America Inc., BP Corporation North America Inc., BP America Production Company, and BP Energy Company (collectively, “BP”) requested FERC to dismiss its July 11, 2016 order (“July 11 Order”) assessing civil penalties against BP and requiring BP to disgorge profits for violating FERC’s anti-market manipulation rule.  In doing so, BP argued that, due to recent federal court cases, the law had changed regarding the statute of limitations for actions imposing civil penalties and disgorgement.  Therefore, according to BP, FERC’s August 5, 2013 order to show cause issued to BP failed to commence a “proceeding” within the meaning of the statute of limitations for enforcing civil fines and penalties, and thus FERC’s assessment of civil penalties and disgorgement was time-barred.  Rather, BP argued that the statute of limitations began to run on November 25, 2008 at the latest, and thus FERC was required to commence a “proceeding” by November 25, 2013, but FERC did not commence a “proceeding” until May 15, 2014 at the earliest when it set the matter for hearing. Continue Reading BP Argues FERC Must Dismiss Market Manipulation Claims due to Five-Year Statute of Limitations

On November 16, 2017, FERC issued a Notice of Proposed Rulemaking (“NOPR”) in which it proposed to approve two Reliability Standards—PRC-027-1 (Coordination of Protection Systems for Performance During Faults) and PER-006-1 (Specific Training for Personnel)—that the North American Electric Reliability Corporation (“NERC”) submitted in a petition on September 2, 2016, and which are intended to replace currently-effective Reliability Standard PRC-001-1.1(ii) (System Protection Coordination).  FERC also proposed to direct NERC to modify PRC-027-1 to require an initial protection system coordination study to ensure that applicable entities will perform (or have performed), as a baseline, a study demonstrating proper coordination of their protection systems.  Lastly, FERC proposed in the NOPR to approve new and revised definitions to the NERC Glossary of Terms, the associated violation risk factors, violation severity levels, implementation plans, and effective dates for PRC-027-1 and PER-006-1, and the retirement of currently-effective PRC-001-1.1(ii). Continue Reading FERC Proposes Approval of Two Reliability Standards

On November 7, 2017, FERC approved a settlement between FERC’s Office of Enforcement and Barclays Bank PLC (“Barclays”), Daniel Brin, Scott Connelly, and Karen Levine (collectively with Barclays, “Defendants”) that resolves FERC’s claims that Defendants manipulated physical electricity markets.  Under the settlement, Barclays is required to pay $105 million in civil penalties and disgorgement, a big reduction compared to the $488 million FERC originally ordered. Continue Reading FERC Approves $105 Million Settlement with Barclays for Market Manipulation