On 16 June the Federal Energy Regulatory Commission (FERC) ordered a civil penalty of US$50,000 against Mr. Moussa Kourouma after finding that he misrepresented facts concerning his new power trading venture called Quntum Energy LLC (Quntum). See Moussa I. Kourouma d/b/a Quntum Energy LLC, 135 FERC ¶ 61,245 (2011). FERC's action is significant because it shows that the agency will pursue enforcement actions against individuals who provide false or misleading information to FERC and certain other market entities such as administrators of organized electric markets.
FERC's decision follows an investigation by the agency's Enforcement Staff (Staff), upon which Staff alleged that Mr. Kourouma made certain misrepresentations about his company to FERC in Quntum's application for market-based rate authority and, separately, in its membership application to PJM Interconnection. Staff alleged, and FERC found, that Mr. Kourouma listed his then one-year old daughter and a family acquaintance as managers of Quntum when, in truth, neither of them had any business relationship with the company. According to Staff, Mr. Kourouma further misrepresented the true nature of Quntum's management and ownership by failing to list his ownership and management interests. According to Staff, Mr. Kourouma listed these individuals in order to hide his involvement in Quntum from his previous employer, with which he had a non-complete agreement in effect.
Agreeing with Staff's allegations, FERC found that Mr. Kourouma violated a regulation requiring power sellers to ensure that their communications with FERC and certain other entities are accurate. The regulation, at 18 C.F.R. § 35.41(b), provides:
A Seller must provide accurate and factual information and not submit false or misleading information, or omit material information, in any communication with the Commission, Commission-approved market monitors, Commission-approved regional transmission organizations, Commission-approved independent system operators, or jurisdictional transmission providers, unless Seller exercises due diligence to prevent such occurrences.
In response to Mr. Kourouma's arguments, FERC concluded that intent is not a required element of a violation of section 35.41(b). FERC also held that this rule is not vague, and that the regulation provides ample direction to those subject to its requirements. Moreover, FERC rejected the argument that Mr. Kourouma's conduct constituted a mere "technical violation" or that a civil penalty was not warranted because he acted as an unsophisticated individual without the assistance of counsel.
FERC calculated the penalty in this case using the factors it listed in its 2008 Revised Policy Statement on Enforcement (note that the recently issued Penalty Guidelines do not apply to individuals). In particular, FERC found that Mr. Kourouma's actions were serious and that "the respondent's conduct harmed the integrity of the regulatory process as well as undermined the transparency of the PJM market." Id. at P 44. To the extent such a violation had been committed by a company, the conduct would be subject to the highest level of penalties under FERC's Revised Penalty Guidelines.
In response to concerns that payment of the entire penalty at once might cause a financial hardship for this individual, FERC agreed to a payment plan allowing Mr. Kourouma to make an initial lump sum payment of US$5,000 followed by yearly installments of US$9,000.