2018 FERC Enforcement Overview - DCM's three main takeaways

On November 15, the FERC issued its annual enforcement overview - the entire document can be found here. The document is 68 pages and covers a variety of issues, including recaps of all civil court cases and settlement. Several items DCM found of interest were:
1.) There is an 8 page discussion - with graphs - of the self report in the prior year. There were 137 self report (over the average of just about 100 per year for the prior five year period). The FERC has put an emphasis on encouraging self-reporting with a stress on the mitigating effect of self-reporting. The majority of items were OATT and Tariff issues from the ISO/RTOs. The staff closed 122 of the 137 self-reports within the year. The discussion in the section includes items such as 10 generator self-reports of bids in excess of cost based bidding. Staff indicated the reporters included descriptions of actions to avoid recurrences of the issue and all self-reports were closed without further action. There was also a self-report by a utility for disclosure of material no-public information by its transmission staff to its marketing staff. The self report discussion indicated similar corrective measures to avoid recurrence and the report was closed without further action. Other no action discussion covered Form 552 filing errors, Solar QF sales violations, Shipper Must Hold Title violations, and Price Bid Curve violations - all settled without further action.
2.) In a number of cases, the self report discussion indicated that the reporting company promptly hired a third party to review the activity and recommend corrective actions - which were adopted. The staff appears to consider the use of a third party as an indication of intent to fully examine the issue and take corrective action. This might be a consideration in determining whether to perform an entirely internal assessment or to reach out to a third party.
3.) Pages 62 to 64 contains a review of the market surveillance activities of the FERC including representative examples of flagged activity and the FERC resolution of the flagged activity with the market participant (they describe the type of firm being contacted). These cover power and gas - there were "approximately" 7,719 alerts for natural gas and FERC ran 84 monthly, hourly, and intra-hourly screening models. Only 18 of the 7,719 natural gas alerts required opening an inquiry and only 1 was referred for an investigation. On the power side, there were 376,588 items of which 37 items were referred for inquiry with 25 closed with no further action and 4 referred for investigation ( 3 remain open for further work without referral or closure). DCM recognizes these individual dispositions on power are not complete for all 37 and we will attempt to understand the discrepancy.
In general, the report does give a good overview of what the FERC is looking at and what they are finding. DCM is happy to have a conversation on this or other commodity topics.