Energy Legal Blog

The Commodity Futures Trading Commission issued an order August 16 approving a settlement resolving allegations that ConAgra Trade Group, Inc. caused a non-bona fide price to be reported for a NYMEX spot month crude oil futures contract in violation of the Commodity Exchange Act (CEA).  The settlement is noteworthy in that (1) it required ConAgra to pay a $12 million civil monetary penalty (significantly after the event occurred) even though no fraudulent intent or specific injury was alleged, and (2) two of five commissioners dissented vigorously from the majority’s decision to accept the settlement. (more…)

In conjunction with SMU’s Cox Maguire Energy Institute, the Bush Institute on Economic Growth recently brought together leaders in the natural gas field to discuss what needs to be done to make America’s explosively growing reserves of natural gas a “true game-changer” in environmental, economic and national security terms. Bracewell & Giuliani’s Jason Hutt joined a panel discussion investigating natural gas’ role in economic growth and national security. (more…)

In a trend that is becoming more common, the Federal Energy Regulatory Commission (“FERC”) issued a series of letter orders in late January 2010, extending the time for its review of several settlements of alleged violations of the NERC Reliability Standards that had been filed with it by the North American Electric Reliability Corporation (“NERC”).  Rather than accepting those settlements with the supporting evidence that had been provided to it, FERC posited a series of Data and Document Requests to NERC and the three involved regional entities: SERC Reliability Corporation (“SERC”), the Western Electricity Coordinating Council (“WECC”) and ReliabilityFirst Corporation (“RFC”).  (more…)

On February 22, 2010, the United States District Court for the Southern District of New York issued a Final Judgment relating to a settlement reached of a Department of Justice (“DOJ”) Complaint against KeySpan Corporation (“KeySpan”) regarding certain activity allegedly engaged in by KeySpan in the electric generating capacity markets in New York City (the “Settlement“).  The civil antitrust action alleged violations of Section 1 of the Sherman Act.  KeySpan agreed to pay $12 million to resolve the matter.  Interestingly, nearly two years to the day prior to the announcement of the Settlement, the Enforcement Staff of the Federal Energy Regulatory Commission (“FERC”) released a report of its investigation of KeySpan’s activities (“Enforcement Report“).  The FERC investigation was closed without a finding of violation of fraudulent behavior or other violations of the FERC regulations.  The Enforcement Report had reported KeySpan’s 2007 receipt of a DOJ Civil Investigative Demand.  FERC did, however, approve various changes designed to improve the market mitigation measures in the New York City capacity market in an initial order and an order on rehearing.  Further rehearing remains pending. (more…)

Last week, the White House Council on Environmental Quality (CEQ) released a draft guidance describing how and when climate change considerations should factor into the environmental impact assessments that federal agencies prepare under the National Environmental Policy Act (NEPA).  The draft guidance is important for anyone proposing to build infrastructure, such as power plants, pipelines and large industrial facilities, since it will influence whether and under what conditions federal agencies  issue permits and other approvals.  Most federal approvals for large projects are subject to NEPA, which requires impact assessments as an aid to federal decision-making. (more…)

Wending its way to FERC on exception (appeal) is Administrative Judge Carmen Cintron’s January 22 initial decision finding that lead natural gas trader for hedge fund Amaranth Advisors, Brian Hunter, manipulated the price of New York Mercantile Exchange (NYMEX) natural gas futures contracts in order increase earnings on futures look-alike contracts (primarily swaps) that Amaranth concurrently held on the largely unregulated exchanges, Intercontinental Exchange (ICE) and Clearport, or over-the-counter (OTC).  How FERC rules on legal issues on appeal should be instructive of how the agency will define market manipulation in both natural gas and electric power markets going forward. (more…)