The Federal Energy Regulatory Commission (FERC) regulates the United States’ energy industry to keep prices reasonable for consumers, avoid monopolistic practices, assist the government’s efforts to develop sustainable energy resources, and ensure the energy industry players adhere to environmental standards.
HData has helpful FERC reporting solutions.
The United States is a global energy behemoth — the US consumes 7.49 billion barrels of oil annually (i.e. roughly 20% of the world’s total production) and 30.28 trillion cubic feet of natural gas a year.
Combined with sources like coal, natural gas, and hydropower, the U.S. uses up just over 3,870 TWh of energy per year—that’s roughly six times as much electricity as Africa consumes in a year.
Behind that scale of operations is a network of solar arrays, dams and hydroelectric stations, nuclear plants, geothermal power stations, and wind farms feeding into the grid. There’s an equally titanic maze of pumping stations, oil and gas pipelines, refineries, and high-voltage power lines that receive power from wherever it’s generated across the U.S. all the way to your house where you’re flipping on a light switch.
America’s FERC makes that network possible.
The agency might seem like yet another government agency, but it’s scope is far-reaching and covers:
To understand the Federal Energy Regulatory Commission’s role in America’s energy industry, think of the agency as an umpire that mediates between energy stakeholders first, their customers, and the environment to ensure the United States’ energy resources are produced efficiently and distributed fairly and in any environmentally-conscious manner.
HData has helpful FERC reporting solutions.
The Federal Energy Regulatory Commission was established on 1 October, 1977, and according to its charter, it’s designed to regulate the transmission and wholesale sale of electricity and fossil fuels across states. The agency also oversees development projects, such as proposals to build hydropower plants, liquified natural gas (LNG) terminals, interstate gas pipelines, and storage facilities.
The agency’s history began in 1920 when the Federal Power Commission was established by Congress to oversee the government’s hydropower development efforts. FPC would end up becoming FERC in 1935, and has continued to evolve over its lifetime, as a result of legislations such as:
Over the course of its existence, the Federal Energy Regulatory Commision has had to investigate, litigate with, and fine American energy operators for fraudulent conduct, environmental damage, price fixing, or any other activity it determines to be detrimental to the development of the nation’s energy industry.
In the same year, the Federal Energy Regulatory Commission fined banking giant J. P. Morgan $410 million for deliberately manipulating energy markets, and circumventing loopholes in the software used by electricity wholesalers in order to bid lower for electricity and collect substantially higher payments when the electricity supply was produced the next day.
The bank agreed to pay a $285 million civil penalty and forfeit $125 million in profits.
The Federal Energy Regulatory Commission sued Texas-based GreenHat Energy for market manipulation, alleging that GreenHat Energy sent false price signals into the United States largest energy market (i.e. Pennsylvania-New Jersey-Maryland Interconnection, or PJM) by purchasing Financial Transmission Rights (FTRs) with minimal collateral.
GreenHat Energy deliberately made false representations to PJM to avoid getting margin called, and rigged FTR auctions, both of which cost grid operators to lose roughly $180 million.
The energy regulator ordered GreenHat to pay $229 million in civil penalties and to disgorge $13.1 million in unjust profits. After it was determined that GreenHat’s founders didn’t have the financial ability to settle the fine, the penalty was negotiated down to $1.4 million.
Looking at the Federal Energy Regulatory Commission’s regulatory history tells us one thing: FERC isn’t shy about handing out penalties for questionable practices by energy players —even if it can't be proved conclusively, or if you infringe unintentionally.
The only way to avoid the agency’s scrutiny is to actively submit to the required compliance and keep provable records of your regulatory history.
HData has helpful FERC reporting solutions.
We built HData as an all-in-one FERC compliance stack designed to help energy players maintain accurate regulatory records, stay compliant with industry standards, and to understand how changes in the FERC’s strategy (or your industry) stands to affect your company’s operations.
Whether you’re:
—HData provides the data that makes it possible. HData Compliance is the only filing solution built from the ground up for annual and quarterly FERC reports.
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