David Applebaum Talks FERC, Enforcement and Regulatory Uncertainty with MCC

Akin Gump energy regulation, markets and enforcement partner David Applebaum was interviewed by Metropolitan Corporate Counsel, the resulting article titled “FERC Enforcement is (Kinda) Alive and Well: But a new commission will mean changes for the energy regulator.”

Applebaum, who joined the firm from the Federal Energy Regulatory Commission (FERC), where he had served as Director of the Division of Investigations, covered a wide range of topics revolving around the themes of the Commission’s enforcement and compliance efforts. Among his observations:

  • Change and stability for FERC enforcement under Trump: [T]here will be a major shift in the composition of the agency in 2017. There are three commissioners now, all Democrats. President-elect Trump will have two commissioners to nominate, and he'll also be able to pick the new chair. On top of that, one of the commissioner’s terms expires in June. That means there will be a very new commission in 2017…I do not, however, expect there to be major changes in enforcement. Since 2005, across two administrations, one Republican and one Democratic, there has been a significant degree of bipartisan consensus on the need for strong enforcement capabilities and on the specific enforcement policy issues and cases.”
  • The anti-manipulation rule and the FERC’s writing on it: “The anti-manipulation rule paper is significant because it gathers together, at a high level, what the agency believes warrants a market manipulation enforcement action. This is very useful for market participants…The real story, however, is what's happening in federal courts. In the past year or so, the federal district courts for the first time have been weighing in on FERC’s legal theories of manipulation, including the categories of cases just mentioned…[S]ome of these courts have gone out of their way to comment on FERC’s view of market manipulation beyond simply denying the defendant’s motion. By and large, these decisions have been favorable to FERC, and enforcement staff is likely to feel emboldened by them. Still, until there have been some final decisions on the merits, and appellate courts have weighed in, there will remain many undecided questions on the scope of FERC’s anti-manipulation rule.”
  • FERC’s enforcement priorities in 2017: “A key priority for the agency will be litigating what is going to be an active federal court docket. Also, depending on what the commission does with a pending natural gas manipulation case, there could be a complex trial before an [administrative law judge]. And there is yet another pending natural gas case that involves some interesting jurisdictional issues on appeal. For the agency to figure out how to do all of that work with the same number of staff and then handle all the ongoing and new inquiries, investigations and self-reports is going to be a challenge and a key priority.”

To read the full interview, please click here.