06 November 2015

Energy Enforcement Update

Recent Developments:

  • FERC v. Barclays:  Judge Nunley denies motion for clarification and FERC files the administrative record in the Barclays proceeding.
  • FERC v. Powhatan:  FERC files opposition to Powhatan and Chen motions to dismiss.
  • FERC v. Berkshire Power:  FERC issues NAV against Berkshire Power Company LLC and Powerplant Management Services LLC.

FERC v. Barclays:  Judge Nunley denies motion for clarification and FERC files the administrative record in the Barclays proceeding. On October 28, the U.S. District Judge presiding over the FERC v. Barclays case (Judge Nunley) issued a minute order denying Barclays’ motion for clarification of the October 2 scheduling order bifurcating the proceeding.  Barclays had requested clarification on whether the proceeding is subject to the Federal Rules of Civil Procedure (including the rules governing discovery) and whether Barclays was entitled to a trial before a jury as to disputed issues of material fact.

In addition, on November 2, FERC lodged the administrative record.  Under Judge Nunley’s scheduling order, FERC now has 30 days to file a motion for an order affirming the civil penalties assessed by FERC.  Barclays must file an opposition within 60 days of FERC’s motion.  Within 21 days of Barclays’ opposition, FERC may file a reply.  According to the scheduling order, Judge Nunley will review FERC’s assessment to determine whether penalties shall be affirmed, vacated, or modified.  Judge Nunley will also consider whether the record submitted by FERC must be supplemented and/or alternative means of fact-finding performed in order to make such a determination.

FERC v. Powhatan:  FERC files opposition to Powhatan and Chen motions to dismiss. On October 30, FERC filed its opposition to the Powhatan and Chen motions to dismiss filed in the U.S. District Court for the Eastern District of Virginia. This case involves allegedly manipulative Up-To-Congestion trading in PJM during the summer of 2010.  Of note, FERC responded to the respondents’ fair notice arguments by claiming that the respondents were engaging in an Enron “Death Star” type scheme and wash trades, which it alleges any reasonable market participant knew was improper.  FERC also rebuts Chen’s claims regarding the statute of limitations, FERC’s failure to state a claim and FERC’s statutory authority to pursue a manipulation claim against individuals.

FERC v. Berkshire Power:  FERC issues NAV against Berkshire Power Company LLC and Powerplant Management Services LLC. On October 23, FERC issued a Notice of Alleged Violations (NAV) against Berkshire Power Company LLC and Powerplant Management Services LLC.  The NAV alleges that respondents violated FERC’s anti-manipulation rule “by engaging in a manipulative scheme to conceal maintenance work and associated outages beginning at least as early as January 2008 and continuing through March 2011.”  The NAV also alleges that Berkshire violated FERC-approved reliability standards by failing to provide outage information to its Transmission Operator and failing to inform its Transmission Operator and Host Balancing Authority of all generation resources available for use.  The NAV further alleges that Berkshire violated FERC’s regulations by failing to comply with various provisions of the ISO-NE Tariff and by making false and misleading statements to ISO-NE regarding its maintenance work and associated outages.

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