Yesterday, the U.S. Department of Justice announced a $12 million settlement with KeySpan Corporation, a seller of electricity capacity, in what is likely a harbinger of investigations to come in the energy markets.
The announcement comes a little over a year after President Obama promised to "reinvigorate antitrust enforcement" in "key industries." Just last May, the Assistant Attorney General in charge of the Antitrust Division of the Department of Justice, Christine A. Varney, echoed the President's sentiment during her first public speech after her nomination was confirmed. In that speech, she singled out the energy industry as an area in need of increased enforcement.
KeySpan allegedly violated antitrust laws by entering into an agreement restraining competition in New York City. The agreement gave KeySpan a financial interest in the sales of its largest competitor. According to the Department of Justice, "retail electricity prices in New York City were likely higher than they would have been without this anticompetitive agreement."
To mitigate the risk of becoming the subject of an investigation, companies that conduct business in the energy sector should ensure that they have in place a comprehensive and effective antitrust compliance program that includes a periodic audit of the program.