• Federal Entities Face Monetary Penalties for Reliability Standards Violations
  • July 27, 2012 | Authors: Daniel E. Frank; Meghan R. Gruebner; Jennifer Kubicek Herbert; Alexandra D. Konieczny
  • Law Firms: Sutherland Asbill & Brennan LLP - Washington Office ; Sutherland Asbill & Brennan LLP - New York Office
  • Federal entities, such as power marketing administrations (PMAs) like the Southwestern Power Administration (SWPA), may be assessed monetary penalties for violating the North American Electric Reliability Corporation’s (NERC) Reliability Standards, according to the Federal Energy Regulatory Commission (FERC). In a July 19, 2012 order, FERC affirmed a $19,500 penalty against SWPA, finding that SWPA and other PMAs are not exempt from penalties under the mandatory and enforceable Reliability Standards. Although the penalty against SWPA is relatively modest, the long-term implications for the PMAs, other federal entities and the wholesale customers who purchase power from them remain unclear.