Situation:
The Federal Energy Regulatory Commission ("FERC") believes that ownership of transmission facilities, whether electric transmission lines or interstate natural gas pipelines, provides transmission owners and their affiliates with a competitive advantage in electric and gas markets. Therefore, FERC has developed “Standards of Conduct for Transmission Providers” intended to protect competitors and foster competition in electric and gas markets by limiting the ability of an electric or gas transmission company to grant any undue preferences to its own marketing and sales operations, or those of its affiliates.

If FERC determines that a company has violated standards, they can require the company in violation to implement a “Standards of Conduct Compliance Plan”. Under such required plan, transmission companies are frequently required to establish a Chief Compliance Officer that is responsible for the monitoring and reporting of FERC-related violations. Additional responsibilities include implementation of training programs for employees on the FERC Standards of Conduct proof of required training. The transmission provider’s books and records, which are kept separately from those of energy affiliates, must be available for FERC inspections intended to validate compliance with FERC Standards of Conduct.

In a Policy Statement on Enforcement (issued October 20, 2005), FERC encouraged regulated entities to implement comprehensive compliance programs, develop cultures of compliance within their organizations, self-report; and cooperate with the Commission in the event violations occur. To reinforce desired behavior, FERC has indicated that companies that exhibit internal compliance measures, self-reporting, ongoing training, and cooperation with the Commission will be given consideration should there be violations and impending punishment and penalties.

Solution:

Global Compliance offers hotline and web reporting mechanisms to assist Energy companies in tracking and reporting allegations related to the “Standards of Conduct for Transmission Providers.” Query, analysis, and trending of data for upward reporting to the FERC are also available and seamlessly integrate with the reporting mechanisms.

To facilitate the required education of employees specific to FERC standards of conduct, Global Compliance provides web-based training modules coupled with an Interactive Voice Response measurement tool to validate that employees have received, studied, and comprehended information on FERC Standards. A web-based Management Tracking component of the interactive training provides real-time feedback on employee participation and scoring along with summary information that can be provided as proof to the FERC.

Outcome:

Through implementation of a proactive program that encourages the reporting of misconduct and violations of FERC regulations, gas and electric energy companies can mitigate the risk of regulatory problems, reduce penalties and enforcement action, and avoid the mandate of “Standards of Conduct Compliance Plan.” With an ongoing employee training program and associated management tracking, energy companies can provide documentation to the FERC proving measures to comply with FERC Standards and steps to create a culture of ongoing compliance within their organization.