The Federal Energy Regulatory Commission oversees the interstate transmission of natural gas, oil, and electricity — in other words mainly big pipelines and power lines. If you’re not in the energy industry you’re unlikely to have heard of them, and if you’re not paying attention it’s easy to miss when FERC investigations problems on its beat.
But under a new enforcement director, Norman C. Bay, FERC recently introduced a notice procedure “designed to increase the transparency and disclosure of FERC Enforcement investigations” according to Bracewell & Guiliani’s energy legal blog:
Under this new procedure, FERC will now publicly release the identity, alleged conduct, and claimed violations underlying FERC’s investigations through a “Notice of Violation”, which will be issued soon after the institution of an enforcement investigation. The effect of the new policy is that FERC investigations will now be made public at an early stage after a preliminary determination to move forward has been made, but apparently before many substantive investigatory actions have been taken.
In the past FERC investigations were not revealed to the public until either a settlement was reached or FERC issued an order to show cause after an investigation. Investigations in which enforcement staff did not find any support for a violation were not ever made public.
Under the new Notice of Violation policy, the identity of a regulated entity under investigation, including its alleged wrongful conduct, will be disclosed at a preliminary stage of the investigation. The immediate direct effect change of this will be increased publicity, which could affect regulated entities’ public relations efforts, regulatory filings, investor relations, and, potentially, its defense strategy.
So what unlucky pipeline company will be the first to face the new exposure? Given Houston’s role as a business hub for many of the country’s largest pipeline systems it seems there’s a decent chance there’s a local tie to whichever one it is. Stay tuned.