3: Enforcement
Prevent Market Manipulation Other Information:
Competitive energy markets can succeed only when competition is combined with effective regulation. The Commission has adjusted
its regulatory policies to meet the dramatic changes that have occurred in both the natural gas and electricity industries.
While the core legal duties of the Commission have not changed – that is, to guard against unjust andunreasonable rates and
undue discrimination and preference – the meansof discharging this duty have evolved over time. The Commission permits market-based
rates and increasingly sets rules of general applicability that govern an entire market. As a result of this regulatory approach,
it is even more important for the Commission topromote compliance with and enforce the statutes it is responsible for implementing
and the regulations it issues under those statutes. The Commission seeks to detect violations quickly, publicize misconduct
where appropriate, and take prompt action to prevent future misconduct. It is important that the Commission understand market
dynamics, detect problems or issues in energy markets early, prevent violations of its rules, and enforce compliance with
the laws under its jurisdiction. Perhaps most important, the Commission needs to ensure that utilities subject to its jurisdiction
have effective internal monitoring and compliance programs in place to help assure that they are following established Commission
rules and regulations. Commission oversight must then provide an independent and external check to ensure that the compliance
programs ofeach jurisdictional utility are adequate, and to periodically audit utility compliance with Commission’s rules,
regulations, and statutory requirements.The Commission’s enforcement efforts were greatly reinforced by the expanded authority
conferred by EPAct 2005, which provided for the first time penalty authority for violations of the NGA and all of Part II
of theFPA. Penalties also are applicable to any entity (not just companies traditionally subject to the Commission’s jurisdiction)
who manipulatesthe gas or electric markets by committing fraud in connection with jurisdictional transactions. Armed with
this expanded authority, the Commission will create an even stronger and more effective complianceand enforcement program
to protect the public interest.To better meet the changing needs of the marketplace, the Commission reorganized and established
the Office of Enforcement. Within this new Office, the Division of Energy Market Oversight was reorganized to include a Market
Monitor Affairs branch to better define the Office’s and Division’s focus on working with the market monitors in the Commission
approved RTOs and ISOs as well as the market monitors approved by the Commission outside the organized markets, e.g., where
the Commission authorized a major merger between electric utilities.
Objective(s):
|
