On June 29, 2016, the Federal Energy Regulatory Commission (the “Commission”) issued an interim final rule amending the civil monetary penalties within its jurisdiction to adjust for inflation. FERC adjusted its penalties pursuant to its statutory obligation under the Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015 (the “ 2015 Adjustment Act”). The Act requires each federal agency to adjust for inflation each civil monetary penalty within the agency’s jurisdiction by July 1, 2016 and to continue to update each penalty annually every January 15th. The Commission explained that the interim final rule is not subject to notice and comment rulemaking because the adjustments are statutorily required and not subject to the agency’s discretion.

Pursuant to the methodology prescribed by the 2015 Adjustment Act, the Commission increased maximum civil monetary penalties for manipulation violations under the Federal Power Act, Natural Gas Act and Natural Gas Policy Act from $1 million to $1,193,970 per violation, per day. It also increased the other civil monetary penalties over which it has jurisdiction, including for certain Interstate Commerce Act violations that had not been updated since 1910 and other Federal Power Act violations. The Commission summarized all the adjustments in a table incorporated into the interim final rule, which we separately attach to this summary.

Finally, FERC also noted in the interim final rule, that the 2015 Adjustment Act directed that agencies, including the Commission, shall use the civil monetary penalty applicable at the time of assessment of a civil penalty, regardless of the date that the violation occurred.