DC Circuit Hears DOE Appeal of FERC Decision to Penalize SWPA for NERC Violations
- Filter By Electric Reliability Law Blog
On May 9, 2014, oral argument was held in the case of Southwestern Power Administration v. FERC. At issue is whether FERC may impose fines against government agencies, such as the SWPA – a division of DOE – under section 215 of the Federal Power Act for violations of NERC reliability standards. On July 28, 2011, NERC had issued a notice of penalty against Southwestern Power Administration (SPA) for violations of requirements in Reliability Standards CIP-004 and CIP-007, and recommended a penalty of $19,500. FERC initiated a review of the penalty on August 29, 2011. Several parties moved to intervene, including NERC on September 19, 2011. Finally, FERC issued an order on July 19, 2012 allowing the penalty to go into effect, rejecting arguments that NERC’s ability to impose penalties under Section 215 is limited by Section 316A to exclude federal agencies like the SWPA. FERC concluded that the plain languages of section 215 explicitly conveyed authority of FERC to assess monetary penalties against a federal entity that is a user, owner, or operator of the Bulk Power system for reliability standard violations.
On August 17, 2012, DOE and the Department of the Interior, along with several others, filed requests for rehearing with FERC and a motion for FERC to stay the penalty in this proceeding. On December 20, 2012, FERC denied rehearing. On February 15, 2013, the DOE, DOI, and the SPA, petitioned the D.C. Circuit Court for review of FERC’s December order denying rehearing. Statements of Issues were filed in March and April 2013, and briefs were filed from July to November 2013.
To view NERC’s NOP, click here.
To view FERC’s underlying decision, click here.
To view the petition for review, click here.