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Update: FERC reorganization will not 'defang' enforcement office, members say

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Update: FERC reorganization will not 'defang' enforcement office, members say

Federal Energy Regulatory Commission members tamped down concerns that a new internal reorganization will compromise the agency's market oversight and compliance work.

During the commission's monthly meeting on Sept. 19, FERC Chairman Neil Chatterjee formally announced that the agency moved some "policy-related functions," such as assessing market trends, from its Office of Enforcement to the Office of Energy Policy and Innovation. In addition, some data management support functions previously housed within the Office of Enforcement will be transferred to a newly created data governance division within FERC's Office of the Executive Director.

The move effectively shut down the Office of Enforcement's Division of Energy Market Oversight, although the functions of that division were transferred to the Office of Energy Policy and Innovation and Office of the Executive Director, FERC spokesman Craig Cano said. In total, 18 staffers went from Office of Enforcement to the policy and innovation office, and four staffers went to the executive director's office.

Chatterjee said the reorganization will allow the Office of Enforcement to focus on its core mission of market activity oversight, investigations and audits while maintaining the office's compliance and market surveillance functions.

"This reorganization makes a lot of sense, and it will create efficiencies and more effectively align staff resources and functions," Chatterjee said. "Importantly, [the Office of Enforcement] will maintain all of the resources it needs to comprehensively address market oversight and compliance."

Fellow commissioner Richard Glick, a Democrat, supported the realignment and sought to quell concerns that the changes could weaken FERC's market oversight.

"I've read a couple articles the last couple days suggesting that somehow this is some sort of conspiracy, that this is going to defang the Office of Enforcement," Glick said. "I don't think that's the case at all."

The moves appear aimed at improving efficiency, Glick said, adding that "if I thought there was something nefarious going on, I think the chairman knows. ... I wouldn't be shy to talk about it. So I just want to say that I do think this is a legitimate" move.

At a press briefing after the monthly meeting, Chatterjee said previous FERC chairs have contemplated such changes and that he consulted with the heads of the Office of Enforcement and Office of Energy Policy and Innovation, as well as FERC's executive director, before making the change. He also discussed the plan with former Commissioner and Chair Cheryl LaFleur, who left the agency in late August, and past chairman Norman Bay, both of whom Chatterjee said thought the reorganization "makes sense."

Worries over FERC's enforcement efforts have grown, drawing the attention of lawmakers on Capitol Hill. On Sept. 19, a group of five U.S. senators wrote to FERC's three commissioners to "express our concern over the apparent erosion of the vital role the [FERC] plays in preventing fraud and manipulation in our nation's energy and financial markets."

The lawmakers pointed to the recent closure of the Division of Energy Market Oversight, a decline in the number of civil penalty actions initiated by FERC, and the agency's decision in May to rescind its policy of issuing notices of alleged violations regarding market participant conduct under agency staff investigation. The lawmakers asked FERC members for "timely and individualized responses" to several questions on how the developments will affect the commission's enforcement work.

The letter was signed by U.S. Sens. Maria Cantwell, D-Wash.; Dianne Feinstein, D-Calif.; Ron Wyden, D-Ore.; Angus King, I-Maine; and Edward Markey, D-Mass.