On September 24, 2009, former Chairman of the Federal Energy Regulatory Commission (“FERC” or the “Commission”), Joseph Kelliher spoke about the Commission’s enforcement program at Infocast’s FERC Compliance Summit. Kelliher stated that the enforcement program was young, and has laid a “good foundation.” However, Kelliher believes there is still room for improvement.
As the Commission’s policies evolve, Kelliher emphasized the need for clarity on regulatory requirements. This clarity will ensure a more robust compliance program and affects the number and quality of self-reports. In particular, Kelliher addressed the need for the Commission to distinguish the most serious offenses that could qualify for the most serious penalties from minor violations. Additionally, Kelliher warned that as more offenses are classified as serious offenses, there is an increased risk of expensive litigation to the Commission. Given this risk, Kelliher noted that the settlement process can be much more effective and efficient than litigation, citing that the Securities and Exchange Commission settles 90% of their enforcement actions.
Kelliher also stated that the enforcement program must balance the need for transparency with fairness while finding uniform rules of enforcement. Kelliher believes the enforcement program should have the goal of maximizing compliance while using its discretion on imposing civil penalties.
When asked about the differences in the enforcement program between his regime and the current regime under Chairmen Jon Wellinghoff, Kelliher predicted that there would be a lot of consistencies between the two since Wellinghoff and Kelliher’s voting record lined up very closely while both served at the Commission.