FERC’s Office of Enforcement to examine potential wrongdoing in markets during recent cold snap

by Paul Ciampoli
APPA News Director
February 23, 2021

The Federal Energy Regulatory Commission (FERC) on Feb. 22 said that its Office of Enforcement is examining wholesale natural gas and electricity market activity during recent extreme cold weather to determine if any market participants engaged in market manipulation or other violations.

The move came in the wake of the arctic storm impacts on the Electric Reliability Council of Texas, the Southwest Power Pool, the Midcontinent Independent System Operator, and other surrounding regions.

If the Office of Enforcement finds any potential wrongdoing that can be addressed under FERC’s statutory authority, it will pursue those matters as non-public investigations, FERC said.

FERC explained that this examination will take place as part of the Division of Analytics and Surveillance’s (DAS) ongoing surveillance of market participant behavior in the wholesale natural gas and electricity markets.

The Division uses market participant-level trading data and data from the financial markets to screen daily and monthly trading at the majority of physical and financial natural gas trading hubs in the United States and the organized and bilateral wholesale electricity markets.

DAS closely identifies and scrutinizes any potentially anticompetitive or manipulative behavior to determine if an investigation is appropriate.

Throughout this process, the Office of Enforcement will work with FERC’s federal partners as necessary and appropriate, FERC said.

In a Feb. 19 letter to FERC Chairman Richard Glick and David Huizenga, Acting Secretary for the Department of Energy, the American Public Power Association and the American Public Gas Association said that FERC, in coordination with the DOE, should expand a current inquiry into the operations of the bulk-power system during recent extreme weather to include the significant price increases experienced in the natural gas markets.

FERC and the North American Electric Reliability Corporation announced on Feb. 16 that they will open a joint inquiry into the operations of the bulk-power system during the extreme winter weather conditions experienced by the Midwest and South Central states.