More About FERC Enforcement & Compliance

The electric utility industry is dynamic and in a period of substantial change in how it is regulated. Balch & Bingham has been in the electric utility regulation counseling business since the inception of the Federal Power Act, and even before that time. We are steeped in the details of how electric generation companies and public utilities do business, how they operate, and understand the intersection between the industry and the complicated array of regulations and laws that touch upon it. With increased emphasis on compliance and enforcement by the Federal Energy Regulatory Commission (FERC), state utility regulatory authorities, and other agencies, Balch has established its FERC Enforcement and Compliance Unit to marshal the firm’s substantial experience and resources in a concentrated way to serve our clients in a comprehensive and focused way.

Compliance, Enforcement and Investigations

The members of Balch’s FERC Enforcement and Compliance Practice live at the intersection of FERC and the power generation and public utility industry. We don’t just follow developments in the law and regulatory regime, we help shape it. We are leaders. We also live the business. We understand, at our very core, how power is generated, marketed, traded and delivered. We understand how the complicated array of FERC directives and requirements translate to real world operational issues and challenges. We know how to find and develop creative solutions. We know our clients have complete respect for FERC’s requirements and we also know that integration and application of those directives is a real challenge. So that our clients can achieve and maintain a culture of compliance, we bring our dedication, knowledge and experience to the table to make compliance happen and keep it that way.

We have been there and done that when it comes to self-reporting of violations, FERC rulemakings, FERC audits, enforcement proceedings, complaint cases, and formal and informal investigations. Our attorneys have taken a leading role in representing clients in scores of energy market investigations and related inquiries. We have successfully represented utility clients in response to formal and informal audits and investigations by FERC, as well as state regulatory investigation. We also have successfully prosecuted and defended private audits of compliance with the terms and conditions of cost-based long-term power sales contracts into an electric utility’s participation in capacity markets. We have assisted in successfully discharging a show cause orders relating to market manipulation allegations. We continue to represent the interests of clients in the ongoing investigations of the 2000 – 2001 market disruptions in California and the West and in related litigation and refund proceedings.

Compliance Plan “Due Diligence” and Independent Legal Review

FERC has made very clear that it requires all entities subject to its expansive jurisdiction, and even those not directly subject to the Federal Power Act but who engage in transactions that affect jurisdictional power markets, must have a “culture of compliance” and effective compliance programs. An effective compliance program often requires that attorneys that are not typically involved in advising corporation with regard to FERC matters to conduct independent assessments of various operational areas, so to assure compliance with an independent eye. Balch’s FERC Enforcement and Compliance Unit, with our in-depth knowledge of power generation, trading and utility operations, is uniquely positioned to work with companies to conduct independent assessments of discrete problems, or even to assess the overall compliance plan that has been developed by a FERC-jurisdictional entity. If a problem has been identified by a FERC-jurisdictional entity, it not only must consider self-reporting, but also diagnosis of the underlying reasons why violations occurred, what can be done to prevent repeat occurrences, and how all that can be achieved consistent with the objectives of operating a profitable, efficient business. We have and currently represent and advise some of the largest electric utilities in the United States, we are regularly engaged by power marketers, independent power producers and other market participants to develop and/or review compliance programs and materials. In this regard, we have developed nationally-recognized expertise in such major areas as Standards of Conduct, Codes of Conduct, Open-Access Transmission Tariffs and OASIS requirements, Market Behavioral Rules, FERC’s Anti-Manipulation rule, Standards of Conduct, EQR requirements, NERC reliability criteria and standards, among other specialized areas.

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