Grab Your Calculator: FERC Unveils Complex Scheme to Determine Penalties

FERC will utilize guidelines modeled after the U.S. Sentencing Guidelines to assess civil penalties for enforcement violations.

On March 18, 2010, the Federal Energy Regulatory Commission (FERC) issued the Policy Statement on Penalty Guidelines in order to increase fairness, consistency and transparency in its calculation of civil penalties for violations under the Natural Gas Act, Part II of the Federal Power Act and the Natural Gas Policy Act. This policy statement is the latest effort by FERC to clarify the enforcement powers that the U.S. Congress granted to FERC in the Energy Policy Act of 2005, including the power to assess civil penalties of up to $1 million per day, per violation.