FERC’s Office of Enforcement opened only six new investigations in fiscal year 2020 and managed to get just $550,000 in civil penalties and disgorgements from the three settlements it closed, according to its annual report, released Nov. 19.

The three settlements came early in the fiscal year, in November 2019 and January 2020, suggesting the COVID-19 pandemic may have played a part in the downturn. The report notes that “while Enforcement continued its typical investigations, audits and surveillance activities in FY 2020, it also took steps to help regulated entities manage their potential enforcement and compliance-related obligations in response to the unprecedented COVID-19 pandemic.” This included suspending new audits until July 31 and “postponing contacting entities regarding surveillance inquiries, except those involving market behavior that could result in significant risk of harm to the market.” (See FERC Loosens Requirements in Pandemic.)

This fiscal year continued a trend from last year, with the office opening half the number of new investigations as the previous year, and the amount of money the office collected in penalties and disgorgements was a pittance compared to other years. In fiscal years 2017 and 2018, it collected $51 million and $83 million, respectively. Even in FY19, considered a slow year for the office, it brought in $14.4 million. (See Slow Year for FERC Enforcement, Report Shows.)

The report does note that four cases, in which Enforcement is seeking more than $89 million in penalties and disgorgement, are pending in U.S. district courts.

The largest penalty assessed by the commission came at the very beginning of the fiscal year, Nov. 1, 2019, and involved Calpine (IN17-1). The company agreed to pay $400,000 because Enforcement found that eight of its plants failed to properly maintain or even falsified records of battery tests, resulting in more than 200 violations of NERC reliability standard PRC-005-1 R2.

Several mitigating factors lowered the settlement amount: plant operators at Calpine’s Gilroy plant in California self-reported several violations in 2015, leading to a wider internal investigation; Calpine fully cooperated with Enforcement’s own investigation; and the office found that the company had not centrally directed any of the violations, with each plant having different circumstances. The company also agreed to a mitigation plan in the settlement.

This year’s penalties also included FERC’s settlement in January with Exelon, which agreed to disgorge more than $100,000 because of an error that resulted in its Mystic Unit 7 in Massachusetts being overcompensated. (See “Fuel Cost Violation,” FERC Rejects Mystic Cost-of-service Amendment.)

After Enforcement staff’s presentation of the report during FERC’s open meeting this month, Commissioner Richard Glick praised them as the commission’s “unsung heroes.” But he expressed concern that the commission itself had “gone AWOL at this point” in enforcing rules against market manipulation based on the low quantity of penalties this year.

“I recognize that you can’t always make a finite judgment based on a single year’s statistic, but I think it’s at least worth asking whether the commission remains committed to its enforcement responsibilities, and I’ve had my doubts,” he said.