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Federal Energy Regulatory Commission



Enforcement Civil Penalties All Civil Penalty Actions

 
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All Civil Penalty Actions – 2016


To access the significant orders and federal district court papers related to all matters that have proceeded to Orders to Show Cause, see the Orders to Show Cause Proceedings page.

Subject(s) of Investigation and Order Sanctions, including Civil Penalties, Disgorgement, and Compliance Measures Description of Findings of Violations
Saracen Energy Midwest, LP, Order Approving Stipulation and Consent Agreement, 156 FERC ∂ 61,122  PDF (August 22, 2016) Civil penalties in the amount of $25,000 against Saracen. Implementation of measures designed to ensure compliance in the future, including submitting an annual compliance report. The Commission issued an Order approving a Stipulation and Consent Agreement (Agreement) between the Office of Enforcement (Enforcement) and Saracen Energy Midwest, LP (Saracen). The Agreement resolves the investigation conducted by Enforcement into whether Saracen violated Southwest Power Pool, Inc.ís (SPP) Tariff, Attachment AE, Section 7.4.1(4), by submitting bids for Transmission Congestion Rights (TCRs) at Electrically Equivalent Settlement Locations (EESLs) for auctions in September and October 2014, and March and April 2015. Saracen neither admits or denies the alleged violations, but it agrees to payment of the civil penalty and compliance measures.
ETRACOM LLC and Michael Rosenberg, Docket No. IN16-2-000 and 2:16-CV-01945 (E.D. Cal.),Order to Show Cause and Notice of Proposed Penalty, 153 FERC ¶ 61,314  PDF (December 16, 2015); Order Assessing Penalties, 155 FERC ¶ 61,284  PDF (June 17, 2016), Petition for an Order Affirming Order Assessing Civil Penalty  PDF (August 17, 2016) Civil penalties and disgorgement as follows, respectively: $315,072 plus interest against ETRACOM; $2,400,000 civil penalty against ETRACOM; $100,000 civil penalty against Rosenberg. Following an Order to Show Cause proceeding, the Commission issued an Order Assessing Civil Penalties against ETRACOM and Rosenberg. The order found that ETRACOM and Rosenberg violated section 1c.2 of the Commissionís regulations and section 222 of the Federal Power Act (FPA), by submitting virtual supply transactions at the New Melones intertie (New Melones) at the border of the California Independent System Operator (CAISO) wholesale electric market in order to affect power prices and economically benefit ETRACOMís Congestion Revenue Rights (CRRs) sourced at that location. ETRACOM and Rosenberg elected the procedures of FPA section 31(d)(3), in which the Commission assesses a penalty and if the disgorgement and civil penalties are not paid within 60 days, the Commission institutes an action in federal district court to affirm the assessment. On August 17, 2016, the Commission filed a Petition for an Order Affirming the Order Assessing Civil Penalties in the U.S. District Court for the Eastern District of California.
City Power Marketing, LLC and K. Stephen Tsingas and FERC v. City Power Marketing, LLC and K. Stephen Tsingas, Case No. 1:15-cv-01428-JDB (DDC). Memorandum Opinion and Order Denying City Power and Tsingas Motion to Dismiss  PDF (August 10, 2016), Petition for an Order Affirming FERC’s Order Assessing Civil Penalties PDF (September 1, 2015), Order Assessing Civil Penalties, 152 FERC ¶ 61,012 PDF (July 2, 2015), Order to Show Cause and Notice of Proposed Penalty, 150 FERC ¶ 61,176  PDF (March 6, 2015) Civil penalties and disgorgement as follows: $1,278,358 in disgorgement jointly and severally against City Power and Tsingas; $14 million civil penalty against City Power; $1 million civil penalty against Tsingas. The Commission issued an Order Assessing Civil Penalties for alleged violation of the Commission’s Anti-Manipulation Rule, 18 C.F.R. § 1c.2, section 222 of the Federal Power Act (FPA), 16 U.S.C. § 824v(a), and 18 C.F.R. § 35.41(b) by engaging in (i) a scheme to collect Marginal Loss Surplus Allocation payments through large volumes of sham Up To Congestion trades in PJM and (ii) false statements under oath to staff designed to conceal important contemporaneous evidence (instant messages) discussing the trades. City Power and Tsingas elected, as part of their response to the Commission’s Order to Show Cause, the procedures of FPA section 31(d)(3), in which the Commission assessed a penalty and instituted an action in federal district court to affirm the assessment. On September 1, 2015, the Commission filed a Petition for an Order Affirming FERC’s Order Assessing Civil Penalties in the U.S. District Court for the District of Columbia. On November 2, 2015, City Power and Tsingas filed a Motion to Dismiss the Petition. On August 10, 2016, the District Court denied the motion to dismiss, holding that the Commission had stated claims both for market manipulation and for violation of 18 C.F.R. 35.41(b). The Court held that the case should proceed as an ordinary civil action, but noted that the case “might be resolved at summary judgment.”
Coaltrain Energy, L.P., Peter Jones, Shawn Sheehan, Robert Jones, Jeff Miller, Jack Wells, Docket No. IN16-4-000 and 2:16-cv-732 (S.D. Ohio), Petition for an Order Affirming Order Assessing Civil Penalty (July 27, 2016) PDF, Order to Show Cause and Notice of Proposed Penalty, 154 FERC ¶ 61,002 PDF (January 6, 2016), Order Assessing Penalties, 155 FERC ¶ 61,204 PDF (May 27, 2016) Disgorgement and civil penalties as follows, respectively: $4,121,894 plus interest in disgorgement against Coaltrain, Peter Jones, and Shawn Sheehan, jointly and severally. Coaltrain $26,000,000 (jointly and severally with Peter Jones and Shawn Sheehan); Peter Jones and Shawn Sheehan $5,000,000 each; Robert Jones $1,000,000; and Jeff Miller and Jack Wells $500,000 each in civil penalties. Following an Order to Show Cause proceeding, the Commission issued an Order Assessing Civil Penalties against Coaltrain Energy, L.P., Peter Jones, Shawn Sheehan, Robert Jones, Jeff Miller, Jack Wells. The order found that Coaltrain, and the named individuals violated section 1c.2 of the Commission’s regulations and section 222 of the Federal Power Act (FPA), by engaging in fraudulent Up To Congestion (UTC) transactions in PJM Interconnection L.L.C.’s energy markets. The Commission declined to find Adam Hughes to have individually violated section 1c.2. The order further found that Coaltrain Energy, L.P. violated 18 C.F.R. § 35.41(b) of the Commission’s rules through false and misleading statements and material omissions relating to the existence of documents responsive to data requests and relating to the trading conduct at issue in the matter. Finally, the order assessed disgorgement and civil penalties as outlined for the violations. Coaltrain and the other named respondents elected the procedures of FPA section 31(d)(3), in which the Commission assesses a penalty and if the disgorgement and civil penalties are not paid within 60 days, the Commission institutes an action in federal district court to affirm the assessment. On July 27, 2016, the Commission filed a Petition for an Order Affirming the Order Assessing Civil Penalties in the U.S. District Court for the Southern District of Ohio.
Maxim Power Corporation, Maxim Power (USA), Inc., Maxim Power (USA) Holding Company Inc., Pawtucket Power Holding Co., LLC, Pittsfield Generating Company, LP, and Kyle Mitton. Memorandum and Order Regarding Procedures Applicable to FERCís Petition and Respondentsí Motion to Dismiss (July 21, 2016)  PDF, Petition for an Order Affirming Order Assessing Civil Penalty (July 1, 2015)  PDF
Order Assessing Civil Penalties, 151 FERC ¶ 61,094  PDF (May 1, 2015), Order to Show Cause and Notice of Proposed Penalty, 150 FERC ¶ 61,068  PDF (February 2, 2015), Notice of De Novo Election  PDF (Mar. 4, 2015)
Assessed civil penalties and disgorgement as follows: $5 million jointly and severally against Maxim Power Corporation and the other named corporate respondents; $50,000 Civil Penalty against Kyle Mitton. The Commission issued an Order Assessing Civil Penalties for violations of the Commissionís Anti-Manipulation Rule, 18 C.F.R. ß 1c.2, section 222 of the Federal Power Act (FPA), 16 U.S.C. ß 824v(a), and 18 C.F.R. ß 35.41(b) through a scheme to mislead the ISO-New England market monitor to collect make-whole payments for reliability dispatches based on the price of oil when Maximís plant actually burned less costly gas. Maxim and the other named corporate respondents including Mitton elected the procedures of FPA section 31(d)(3), in which the Commission assesses a penalty and, if the penalty is not paid, then institutes an action in federal district court to review the assessment. The Commission filed a Petition for an Order Affirming Order Assessing Civil Penalty in the U.S. District Court for the District of Massachusetts on July 1, 2015. In response the respondents filed a Motion to Dismiss on September 4, 2015. On July 21, 2016, the District of Massachusetts court issued an order denying Maximís motion to dismiss, holding that the case should proceed as an ordinary civil case (but with limited discovery) and assigning a magistrate judge to commence pre-trial scheduling.
BP America Inc., BP Corporation North America Inc., BP America Production Company, BP Energy Company, Initial Decision, 152 FERC ¶ 63,016 (August 13, 2015), Order Establishing Hearing, 147 FERC ¶ 61,130 (May 15, 2014), Opinion No. 549, Order on Initial Decision and Rehearing, 156 FERC ¶ 61,031 (July 11, 2016) Civil Penalty in the amount of $20,160,000 against BP America Inc., BP Corporation North America Inc., BP America Production Company, BP Energy Company (BP); disgorgement in the amount of $207,169 against BP. The Commission issued an Order to Show Cause why the company should not be found to have violated the Anti-Manipulation Rule, 18 C.F.R. 1c.1, for sales of natural gas at specific natural gas trading hubs to affect the index price at which related financial instruments settled. The Commission set the matter for hearing before an ALJ. The ALJ’s Initial Decision, reviewable by the Commission, found that BP violated Section 1c.1 of the Commission’s regulations and Section 4A of the Natural Gas Act, and made factual findings respecting the application of the Commission’s Penalty Guidelines.

The Commission issued an order affirming the ALJ’s Initial Decision and ordered BP to pay $20,160,000 in civil penalties and disgorge unjust profits in the amount of $207,169. BP now has the option to pay the ordered penalty and disgorgement, or within 60 calendar days of the date of the order institute an action in a United States court of appeals for judicial review of the Commission’s order.
Richard Silkman, Order to Show Cause and Notice of Proposed Penalty, 140 FERC ∂ 61,033 PDF (July 17, 2012); Order Assessing Penalties, 144 FERC ∂ 61,164 PDF (August 29, 2013); Petition for an Order Affirming Order Assessing Civil Penalty PDF, Case No. 1:13-cv-13054-DPW (December 2, 2013); Order Denying Motion to Dismiss PDF, Case No. 1:13-cv-13054-DPW (April 11, 2016) $1,250,000 Civil Penalty. The Commission issued an Order Assessing Civil Penalty finding a violation of the Anti-Manipulation Rule, 18 C.F.R. 1c.2, for fraudulently inflating baseline energy consumption in the New England ISO market in order to later claim greater energy curtailments, and payments, in the Day-Ahead Load Response Program (demand response). Silkman elected the procedures of FPA section 31(d)(3), in which the Commission assessed a penalty and instituted an action on December 2, 2013, in the United States District Court for the District of Massachusetts to affirm and enforce its Order Assessing Civil Penalty. On April 11, 2016, the United States District Court for the District of Massachusetts denied CES and Silkmanís Motion to Dismiss and transferred the litigation to the United States District Court for the District of Maine.
Competitive Energy Services, LLC, Order to Show Cause and Notice of Proposed Penalty, 140 FERC ∂ 61,032 PDF (July 17, 2012); Order Assessing Penalties, 144 FERC ∂ 61,163 PDF (August 29, 2013); Petition for an Order Affirming Order Assessing Civil Penalty PDF, Case No. 1:13-cv-13054-DPW (December 2, 2013); Order Denying Motion to Dismiss PDF, Case No. 1:13-cv-13054-DPW (April 11, 2016) $7,500,000 Civil Penalty; $166,841.13 Disgorgement. The Commission issued an Order Assessing Civil Penalty finding a violation of the Anti-Manipulation Rule, 18 C.F.R. 1c.2, for fraudulently inflating baseline energy consumption in the New England ISO market in order to later claim greater energy curtailments, and payments, in the Day-Ahead Load Response Program (demand response). CES elected the procedures of FPA section 31(d)(3), in which the Commission assessed a penalty and instituted an action on December 2, 2013, in the United States District Court for the District of Massachusetts to affirm and enforce its Order Assessing Civil Penalty. On April 11, 2016, the United States District Court for the District of Massachusetts denied CES and Silkmanís Motion to Dismiss and transferred the litigation to the United States District Court for the District of Maine.
Lincoln Paper and Tissue, LLC, Docket No. IN12-10-000, Order to Show Cause, 140 FERC ∂ 61,031 PDF (July 17, 2012); Order Assessing Civil Penalties, 144 FERC ∂ 61,162 PDF (August 29, 2013); Petition for Order to Affirm and Enforce Civil Penalty Order, Case No. 1:13-cv-13056-DPW PDF(December 2, 2013); Order Denying Motion to Dismiss, Case No. 1:13-cv-13056-DPW (April 11, 2016); Order Approving Stipulation and Consent Agreement, 155 FERC ∂ 61,228 PDF (June 1, 2016) Disgorgement and civil penalties as follows, respectively: $379,016.03, in disgorgement. $5,000,000 in civil penalties. During an Order to Show Cause proceeding before the Commission, Lincoln elected the procedures of FPA section 31(d)(3), in which the Commission assessed a penalty and on December 2, 2013, filed a Petition in the United States District Court for the District of Massachusetts to affirm and enforce its Order Assessing Civil Penalty. On April 11, 2016, the United States District Court for the District of Massachusetts denied Lincolnís Motion to Dismiss and transferred the Litigation to the United States District Court for the District of Maine. On September 28, 2015, Lincoln filed foPDFr bankruptcy under Chapter 11 of the United States Bankruptcy Code, in the United States Bankruptcy Court for the District of Maine. On June 1, 2016, the Commission approved a Stipulation and Consent Agreement (Agreement) between the Office of Enforcement (Enforcement) and Lincoln Paper and Tissue, LLC (Lincoln). Pending bankruptcy court approval, the Agreement resolves the investigation into whether Lincoln engaged in fraudulent conduct in its participation in ISO-New England, Inc.ís (ISO-NE) Day-Ahead Load Response Program (DALRP), thereby violating the Commissionís Anti-Manipulation Rule, 18 C.F.R. ß 1c.2 and section 222 of the Federal Power Act (FPA), and the subsequent Order Assessing Civil Penalties that resulted from the underlying Order to Show Cause proceeding relating to Enforcementís investigation. Lincoln neither admits nor denies the allegations. On June 13, 2016, a motion for approval of the settlement was filed in the bankruptcy court. If the bankruptcy court approves the Agreement, the Commission will file a motion to dismiss the civil penalty petition against Lincoln pending in Maine.
Berkshire Power Company LLC and Power Plant Management Services LLC, Docket No. IN16-3-000, Order Approving Stipulation and Consent Agreement, 154 FERC ∂ 61,259 PDF (March 30, 2016) Disgorgement and civil penalties as follows, respectively: $1,012,563, plus interest in disgorgement against Berkshire. $2,000,000 in civil penalties, jointly and severally, against Berkshire and Power Plant Management, and an additional separate civil penalty in the amount of $30,000 against Berkshire for violations of the Reliability Standards. The Commission issued an Order approving a Stipulation and Consent Agreement (Agreement) between the Office of Enforcement (Enforcement), Berkshire Power Company LLC (Berkshire), and Power Plant Management Services LLC (PPMS). The Agreement resolves the investigation conducted by Enforcement into whether Berkshire and PPMS violated section 222 of the Federal Power Act (FPA) and the Commissionís Anti-Manipulation Rule, 18 C.F.R. ß 1c.1 (2015), and whether Berkshire separately violated the Market Behavior Rules, 18 C.F.R. ß 35.41(a) and (b), the ISO-NE Tariff, and certain Commission-Approved Reliability Standards, by concealing plant maintenance and associated outages from ISO-New England, Inc. (ISO-NE) between January 1, 2008 and March 30, 2011. Berkshire and PPMS admit the violations and agree, in addition to payment of the civil penalties and disgorgement, to implement measures designed to improve compliance with applicable Commission regulations and jurisdictional tariffs.

Total Civil Penalties assessed for all years 2007 to present: $644,984,786.00.

Total Civil Penalties does not include the $30,000,000 assessed in Hunter and overturned on jurisdictional grounds by the U.S. Court of Appeals for the District of Columbia Circuit. Also does not include penalties proposed or assessed in the following currently pending matters: $20,160,000 in BP America Inc., et al.; $453,000,000 in Barclays Bank PLC, et al.; $5,000,000 assessed in Lincoln Paper and Tissue, LLC; $7,500,000 assessed in Competitive Energy Services, LLC; $1,250,000 assessed in Richard Silkman; $16,800,000 assessed in Powhatan Energy Fund LLC; $10,080,000 assessed in CU Fund Inc.; $1,920,000 assessed in HEEP Fund Inc.; or $1,000,000 assessed in Houlian Chen for his acts on behalf of Powhatan Energy Fund; $5,000,000 (Maxim corporate entities) and $50,000 (Kyle Mitton) assessed in Maxim Power Corporation, et al.; $14 million against City Power Marketing, LLC and $1 million against K. Stephen Tsingas; $26 million against Coaltrain Energy, L.P.; $5 million each against Peter Jones and Shawn Sheehan; $1 million against Robert Jones; and $500,000 each against Jeff Miller and Jack Wells assessed in Coaltrain Energy, L.P., et al.; $2,400,000 against ETRACOM LLC and $100,000 against Michael Rosenberg assessed in ETRACOM LLC, et al.

Total Disgorgement ordered for all years 2007 to present: $302,969,089.00.

Total Disgorgement does not include amounts ordered in the following currently pending matters: $34,900,000 ordered in Barclays Bank PLC, et al.; $379.016 ordered in Lincoln Paper and Tissue, LLC; $166,841 ordered in Competitive Energy Services, LLC; $207,169 in BP America Inc., et al.; $3,465,108 assessed in Powhatan Energy Fund LLC; $1,080,576 assessed in CU Fund Inc.; $173,100 assessed in HEEP Fund, Inc.; $1,278,358 assessed in City Power Marketing, et al.; or $4,121,894 plus interest assessed in Coaltrain Energy, L.P., et al. $315,072 plus interest assessed in ETRACOM LLC, et al.