Will FERC actually assess
big penalties?

Maybe.
        It sounds as if the commission is about to establish its policy.
        There it is on the agenda for the meeting Thursday.
        It's M-1 (for miscellaneous) and carries the docket number of AD07-4-000. That means too that it's not a formal rulemaking.
        We talked to someone who does news releases and he assured us there will be a release to explain what the FERC is doing.
        Chairman Joseph Kelliher has often said that FERC needs to be able to assess greater penalties to get its work done.
        Then came EPACT last year as Congress addressed the weak grid issue and gave FERC big penalties.
        At FERC the staff has broken up into factions that want to sock it to an important company to set an example.
        Another faction wants to make sure they get the right company and not just hit hard a firm that has violated the spirit of something.
        Penalties can run up to $1 million/day. That's lots of authority.
        So far under today's FERC the record has been perfect -- no penalties have been assessed.
        Does that mean that our industry has been perfect?
        Maybe.
        We'll let you know as soon as we find out.
        What's planned for Thursday may be guidance for the civil penalties group -- "a statement of administrative policy regarding the process for assessing civil penalties."
        M-1 is going to be a way of telling people how the commission intends to go about doing its job.
        The concept of manipulating markets is a sticky area.
        What does that mean manipulating markets?
        Isn't that what sales people are supposed to do?
        Telling someone after the fact what they've done wrong and hitting them with a big penalty, can that be fair?
        What if someone is abiding by all the rules and the Enforcement folk decide the rules need to change, will they do it by zapping someone?
        Would such action throw cold water on the marketplace?
        Another provocative question is whether incoming Democrats consider FERC worth their time.
        The agency rarely appears on Congress' top 10 priority list.
        Originally published in Restructuring Today on December 18, 2006