Enforcement Processes and Procedures: An Overview EBA Mid-Year Meeting December 3, 2009 Washington, DC Prepared by: Andrea Wolfman

2 Relevant FERC Statutes Investigative Authority, including subpoena authority: –Federal Power Act, Section 307, 16 U.S.C. § 825f –Natural Gas Act, Section 14, 15 U.S.C. § 717m Broad Audit Authority: –Federal Power Act, Section 301, 16 U.S.C. § 825 –Natural Gas Act, Section 9, 15 U.S.C. § 717h

3 Relevant FERC Regulations Investigative rules: 18 C.F.R. Part 1b Contested Administrative Hearings: 18 C.F.R. Part 385 (applicable post-Show Cause Order) Ex parte rules: 18 C.F.R. § (applicable post-Show Cause order)

4 Relevant FERC Orders Compliance with Statutes, Regulations, and Orders, 125 FERC ¶ 61,058 (2008) (Policy Statement on Compliance); Ex Parte Contacts and Separation of Functions, 125 FERC ¶ 61,063 (2008) (Order No. 718; post-Show Cause Order procedure); Enforcement of Statutes, Regulations and Orders, 123 FERC ¶ 61,156 (2008) (Revised Policy Statement On Enforcement); Submissions to the Commission upon Staff Intention to Seek an Order to Show Cause, 123 FERC ¶ 61,159 (2008) (Order No. 711; revision of procedures under 18 C.F.R. § 1b.19 for “Wells” notice); Energy Transfer Partners, L.P., et al., 121 FERC ¶ 61,282 (2007) (no intervention in enforcement proceedings; no de novo review in Dist. Ct. under NGA). Process for Assessing Civil Penalties, Docket No. AD (December 21, 2006) (Statement Of Administrative Policy Regarding The Process For Assessing Civil Penalties); Enforcement of Statutes, Orders, Rules, and Regulations, 113 FERC ¶ 61,068 (2005) (2005 Policy Statement).

5 How the Process Starts FERC’s Enforcement Process Can Start From: Complaint/tip to the Hotline Self-report Discovery during audit Market Monitoring (by FERC or ISO/RTO) Referral from the Commission or other agency The FERC website provides general information about the process:

6 FERC Enforcement Procedural Paths Preliminary investigation (no subpoena authority) Potential Outcomes: closed with no action; settlement; elevate to formal investigation; staff recommends Show Cause Order Formal investigation (with subpoena authority) Potential Outcomes: closed with no action; settlement; staff recommends Show Cause Order Commission Show Cause Order Potential Outcomes: terminated no further action; Commission order finding violation and directing remedy without a hearing; order setting for administrative hearing; settlement; Commission order on violation and remedy.

Questions? Andrea Wolfman