To win confirmation as Federal Energy Regulatory Commission chair, Norman Bay will have to overcome both questions about his energy policy experience and criticism of the agency’s enforcement practices. His case wasn’t helped last week by the responses Acting Chair Cheryl LaFleur filed in response to questions from the Senate Energy and Natural Resources Committee.
LaFleur made clear she hasn’t always agreed with Bay or her fellow commissioners on FERC enforcement policy, detailing seven cases in which she issued separate concurrences or dissented from the majority. In four of the cases, the subjects were represented by former FERC general counsel William Scherman, who co-authored an Energy Law Journal article last month accusing FERC of heavy-handed enforcement tactics.
While LaFleur characterized the disagreements as “procedural” and not substantive, the disclosures could lend credence to Scherman’s criticism of the Office of Enforcement, which Bay has led since 2009.
In three cases, LaFleur said she disagreed with the way the commission applied its penalty guidelines, which she said “had the effect of double-counting the duration of the violations and unduly increasing the amount of the civil penalty range.” Commissioner John Norris joined her dissent in one of the cases.
She also dissented from a commission decision rejecting Barclays’ motion to quash a subpoena. The motion came after Bay’s office had issued an order to show cause, accusing the bank of market manipulation. Barclays had chosen to forego a hearing before an administrative law judge and instead have the commission assess a civil penalty for the alleged misconduct.
“In my view, the statutory directive that the commission `promptly assess’ a civil penalty could not be reconciled with further investigation into the conduct that was detailed in the order to show cause,” LaFleur wrote.
LaFleur said she also split with Bay and other commissioners in a non-public order related to the timing of an investigation subject’s access to deposition transcripts. “The commission’s regulations state that even if good cause exists to deny witnesses a copy of his or her deposition transcript, `[i]n any event, any witness or his counsel, upon proper identification, shall have the right to inspect the official transcript of the witness’ own testimony,’” LaFleur wrote. “I believe this regulation does not permit a delay in providing access to transcripts.”
Scherman had alleged that FERC “denied witnesses the right to procure copies of, or to inspect, the official transcripts of their own depositions” in “a number of nonpublic cases.”
Finally, LaFleur dissented with the commission’s decision to suspend J.P. Morgan Energy Venture’s market-based rate authority in response to the company’s alleged misrepresentations during a market manipulation investigation.
“I viewed such a suspension as inconsistent with the commission’s market-based rate regulations,” she wrote. “Instead, I believe that any misrepresentations should have been addressed as part of the ongoing investigation into J.P. Morgan’s bidding activities, either as separate counts of obstruction, or as aggravating circumstances factoring into the determination of a civil penalty.”
