Report of the Compliance & Enforcement Committee

Energy Law Journal, January 1, 2013 | Go to article overview
Save to active project

Report of the Compliance & Enforcement Committee

This report of the Compliance & Enforcement Committee summarizes key federal enforcement and compliance developments in 2012 including certain decisions, orders, actions, and rules of the Federal Energy Regulatory Commission, the Commodity Futures Trading Commission, the Pipeline and Hazardous Materials Safety Administration, the Department of Energy, and the United States Department of Justice.*


A. Reports and Rules

1. Annual Enforcement Report

On November 15, 2012, the Federal Energy Regulatory Commission (FERC) Office of Enforcement issued its Annual Report of enforcement staffactivities in fiscal year 2012.1 The report highlighted the creation of the new Division of Analytics and Surveillance; initiation of sixteen investigations and closure of twenty-one investigations; nine settlements, five Orders to Show Cause, and seven Notices of Alleged Violations.2 The FERC settled cases for over $148 million in civil penalties and over $119 million disgorgement of unjust profits.3 Enforcement processed thirty-three full Notices of Penalty and twelve Spreadsheet Notices of Penalty including a total of 904 possible or confirmed violations.4

2. Division of Analytics and Surveillance

In February 2012, the FERC Office of Enforcement created the Division of Analytics and Surveillance (DAS) to "develop[] surveillance tools, conduct[] surveillance, and analyze[] transactional and market data to detect potential manipulation, anticompetitive behavior, and other anomalous activities in the energy markets."5 "In FY2012, DAS reviewed numerous instances of potential misconduct and referred matters" to the Division of Investigations.6 The FERC also issued Order No. 760, Enhancement of Electricity Market Surveillance and Analysis through Ongoing Electronic Delivery of Data from Regional Transmission Organizations (RTO) and Independent System Operators (ISO),7 and Order No. 768, Electricity Market Transparency Provisions of section 220 of the Federal Power Act (FPA), 8 to "enhance DAS's ability to conduct surveillance of the electric markets and to analyze individual market participant behavior."9 Order No. 760 requires RTOs/ISOs to deliver market data directly to the FERC, including "physical and virtual bids and offers, market awards, resource outputs, marginal cost estimates, shiftfactors, financial transmission rights, internal bilateral contracts, uplift, and interchange pricing."10 Order No. 768 requires "market participants that are excluded from [FERC] jurisdiction under FPA section 205, and have more than a de minimis market presence to file [Electric Quarterly Reports] with the [FERC]."11

B. Show Cause Proceedings

1. Barclays Bank, PLC

On October 31, 2012, the FERC issued an Order to Show Cause (OSC) to Barclays Bank PLC (Barclays) and four individuals, Daniel Brin, Scott Connelly, Karen Levine, and Ryan Smith (together, the individual traders), directing them to show cause why they did not violate section 1c.2 of the FERC's regulations and section 222 of the FPA.12 Barclays and the individual traders "are alleged to have violated section 1c.2 by manipulating the electricity markets in and around California from November 2006 to December 2008."13

Office of Enforcement Staff(OE Staff) initiated the investigation after the Enforcement Hotline received calls from market participants on the matter.14 OE Staffconcluded "that Barclays and the individual traders engaged in . . . loss-generating trading of next-day fixed-price physical electricity on the IntercontinentalExchange . . . to benefit Barclays' financial swap positions."15 In its "Enforcement StaffReport and Recommendation" to the FERC, Staff"allege[d] that Barclays and the individual traders engaged in a coordinated scheme to manipulate trading at four electricity trading points in the Western United States in certain months from November 2006 to December 2008."16 OE Staffproposed $34.

The rest of this article is only available to active members of Questia

Sign up now for a free, 1-day trial and receive full access to:

  • Questia's entire collection
  • Automatic bibliography creation
  • More helpful research tools like notes, citations, and highlights
  • Ad-free environment

Already a member? Log in now.

Notes for this article

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
Loading One moment ...
Project items
Cite this article

Cited article

Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

Cited article

Report of the Compliance & Enforcement Committee


Text size Smaller Larger
Search within

Search within this article

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

While we understand printed pages are helpful to our users, this limitation is necessary to help protect our publishers' copyrighted material and prevent its unlawful distribution. We are sorry for any inconvenience.
Full screen

matching results for page

Cited passage

Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

Cited passage

Welcome to the new Questia Reader

The Questia Reader has been updated to provide you with an even better online reading experience.  It is now 100% Responsive, which means you can read our books and articles on any sized device you wish.  All of your favorite tools like notes, highlights, and citations are still here, but the way you select text has been updated to be easier to use, especially on touchscreen devices.  Here's how:

1. Click or tap the first word you want to select.
2. Click or tap the last word you want to select.

OK, got it!

Thanks for trying Questia!

Please continue trying out our research tools, but please note, full functionality is available only to our active members.

Your work will be lost once you leave this Web page.

For full access in an ad-free environment, sign up now for a FREE, 1-day trial.

Already a member? Log in now.

Are you sure you want to delete this highlight?