On November 15, the Federal Energy Regulatory Commission’s (FERC) Office of Enforcement issued their 12^th annual report on enforcement. As in previous years, the Office of Enforcement will maintain its focus on the threats “posed by fraud and market manipulation in wholesale energy markets” in order to ensure that this kind of conduct does “not undermine FERC’s goal of ensuring efficient energy services at reasonable cost or erode confidence in those markets to the detriment of consumers and competitors.”

The report highlights FERC’s focus on fraud and market manipulation, conduct that threatens the regulated markets transparency, serious violations of mandatory Reliability Standards, and anticompetitive conduct. The Report follows the trend from previous years, of providing the public with information about “the nature of non-public enforcement activities,” like surveillance inquiries, self-reported violations, and investigations that had been closed without enforcement action in the public.

During the presentation about the Report, FERC was informed that “the Report summarizes audits, market reports, litigation filings, and settlements which were approved by the Commission.” The Office of Enforcement said that the summaries are available to help any companies that are seeking to comply with FERC’s orders and regulations. The individuals and companies whose conduct was reviewed in this report were not identified in order to maintain confidentiality.

During the 2018 Fiscal Year, FERC approved six different settlements between Enforcement and subjects in order to resolve different matters. These settlements totaled about $83 million in civil penalties and $66 million in disgorgement. More information on this was included in the Report.

Some of the highlights of Enforcement Report include:

• “Investigations staff opened 24 new investigations and closed 23 pending investigations with no action. Additionally, staff negotiated six settlements that resulted in more than $83 million in civil penalties and disgorgement of more than $66 million in unjust profits. These Commission-approved settlements included provisions requiring the subjects to enhance their compliance programs and periodically report back to Enforcement regarding the results of those enhancements.
• Audits and Accounting staff completed 14 audits of oil pipelines, electric utilities and natural gas companies, resulting in 209 recommendations for corrective action and directing refunds and recoveries totaling more than $185 million. Additionally, DAA advised and acted on 435 proceedings at the Commission covering various accounting matters with cost-of-service rate implications.
• Market Oversight staff continued its analysis of market fundamentals, and enhanced its capabilities for identifying anticompetitive market outcomes and anomalies that may indicate an exercise of market power. Market Oversight published its 2017 State of the Markets Report and Seasonal Assessment reports. It also held two Electric Quarterly Report user group meetings to discuss potential system improvements and enhancements.
• Analytics and Surveillance staff reviewed numerous instances of potential misconduct and provided analytical expertise to Investigations staff in approximately 50 investigations. Natural gas surveillance screens produced approximately 7,719 alerts. Each month Analytics and Surveillance staff ran and reviewed 84 electric surveillance screens, hourly and intra-hour sub-screens, and reports for more than 36,000 hubs and pricing nodes within six regional transmission owner and independent system operator regions.”

On November 14, Federal Energy Regulatory Commission (FERC) announced that it has begun implementing the America’s Water Infrastructure Act of 2018, which was signed into law by President Donald Trump on October 23. According to sections 3003 and 3004 of the Act, FERC must issue new rules to establish an expedited process for issuing and amending licenses for already existing non-powered dams and closed-loop pumped storage projects. FERC says the processes have to seek a final decision from them within two years of the receipt of a completed application.

The Act will help speed up the process of licensing and re-licensing for different hydropower projects. The bill can also expand some hydropower projects from a limit of five megawatts to 40 megawatts.

“There are a lot of hydropower projects coming up on relicensing — about a third of the fleet — so as these projects come up to be relicensed, it’s really important that we reduce the amount of regulatory burden to accelerate a timely relicensing process,” said Justin Ong, a policy associate with Clearpath, a Washington-based organization dedicated to advancing conservative-based clean energy policies.

“Giving our utilities the flexibility to better plan ahead will keep our energy sources safe and save taxpayers money,” Sen. Maria Cantwell of Washington said in a statement about the hydropower provisions.

According to the release in the Federal Register, “the Commission has established three dockets in order to implement the requirements of the Act: RM19-6-000 (Licensing Regulations under America’s Water Infrastructure Act of 2018); AD19-7-000 (Nonpowered Dams List); and AD19-8-000 (Closed-loop Pumped Storage Projects at Abandoned Mines Guidance).”

FERC released a schedule for the implementation of the Act, which plans for a Notice of Proposed Rulemaking for the expedited licensing process in early 2019 and for a final rule to be made in April 2019. They have also planned for a workshop on the closed-loop pump storage projects that are in abandoned mining sites, which is scheduled to be held in February 2019; FERC’s guidance on this should be issued in September 2019.

FERC will also be providing, in April 2019 a draft list of the already existing non-powered dams that have the greatest potential for non-federal development; they will have a finalized list in August 2019. According to the Energy Department, only three percent of the dams in the United States are currently electric; outfitting these already existing dams could help states meet the mandates for clean and renewable energy.

“In [Indiana’s] 8th Congressional District alone, there are six nonpowered dams that could be modernized to produce clean energy,” Rep. Larry Bucshon, R-Ind., said when the House passed the water projects bill in September.

The Act also requires FERC to convene an interagency task force in order to coordinate the different regulatory processes that require authorization for the new processes; the coordination session will be held on December 12. Some of the agencies that will be joining the task force session include the National Oceanic and Atmospheric Administration, the Department of the Interior, the Department of Energy, the U.S. Forest Service, five Indian tribes, and various state agencies.

“Without question, this water infrastructure package is a win for America,” said FERC committee leaders. “It… promotes hydropower development, which creates clean energy jobs here at home and provides consumers with low-cost, emissions-free electricity. We applaud the Senate for passing this vital legislation and urge President Trump to sign it into law soon.”