FERC v. Powhatan Energy Fund, LLC Saga Ends With Default Judgment Against Powhatan Energy Fund
On March 22, 2023, the U.S. District Court for the Eastern District of Virginia (Court) granted the Federal Energy Regulatory Commission’s (FERC) Motion for Default Judgment and entered a default judgment against Powhatan Energy Fund, LLC (Powhatan Energy Fund). The Court awarded FERC $3,465,108 in disgorgement and $16,800,000 in civil penalties.
FERC Approves New Extreme Cold Weather Reliability Standards
On February 16, 2023, the U.S. Federal Energy Regulatory Commission (FERC) approved two new North American Electric Reliability Corporation (NERC) Reliability Standards: EOP-011-3 (Emergency Operations) and EOP-012-01 (Extreme Cold Weather Preparedness and Operations). The new standards stem from FERC and NERC’s joint inquiry into Winter Storm Uri — the February 2021 winter storm event that led to the largest controlled firm load shed event in U.S. history, with over 4.5 million people losing power and at least 210 people losing their lives. The joint inquiry resulted in the issuance of a November 2021 report that included recommendations for NERC reliability standard enhancements to improve extreme cold weather operations, preparedness, and coordination. The November 2021 report found that the bulk power system “cannot operate reliability without adequate generation.”[1]
Amidst Recent Attacks, U.S. Regulators Emphasize Grid Security
A series of threats to the U.S. power grid have elevated physical grid security as a key concern for federal energy regulators. On December 15, 2022, the Federal Energy Regulatory Commission (FERC) ordered the North American Electric Reliability Corporation (NERC) to reassess its existing security rules in light of recent grid attacks.
Federal Energy Regulatory Commission Directs North American Electric Reliability Corporation to Update Cybersecurity Standards
On January 19, 2023, the U.S. Federal Energy Regulatory Commission (FERC) issued a final rule (RM22-3) (the Rule) directing the North American Electric Reliability Corporation (NERC) to develop and submit for approval reliability standards that require internal network security monitoring (INSM) within a trusted Critical Infrastructure Protection (CIP) networked environment for all high-impact bulk electric system (BES) cyber systems and medium-impact BES cyber systems with external routable connectivity. FERC also directed NERC to study all low-impact BES cyber systems and medium-impact BES cyber systems without external routable connectivity (Other BES). NERC has 15 months to submit its proposed reliability standards for approval and 12 months to submit a report on its study of the Other BES.
FERC Opens 2023 With Leadership Transition
Former U.S. Federal Energy Regulatory Commission (FERC or the Commission) Chairman Richard Glick has officially departed the independent Commission after failing to secure a reconfirmation hearing before the Senate in December 2022. Glick’s departure leaves the Commission with a 2–2 split between Democrats and Republicans that could stall a number of major initiatives that were ongoing under the former Chairman and the Commission’s Democratic majority.
2022 Sidley Energy Enforcement Update
This Sidley Energy Enforcement update covers:
- Federal Energy Regulatory Commission (FERC) approves settlement between Enforcement staff and Coaltrain
- Both FERC and Commodity Futures Trading Commission (CFTC) enforcement reports highlight the respective agency’s continued commitment to strong enforcement
- U.S. Court of Appeals for the Fifth Circuit upholds FERC’s finding that BP manipulated the natural gas market but remands to FERC to recalculate its $20 million penalty
- CFTC orders Glencore to pay a record-setting penalty of $1.186 billion
- CFTC and Securities and Exchange Commission (SEC) orders over $1.8 billion in fines against 11 firms for recordkeeping failure — employees using unapproved method of communications such as texts and WhatsApp on personal devices