Currently, there is no broadly applicable regulatorily-established duty imposed upon Federal Energy Regulatory Commission (“FERC”) market participants in the various FERC markets (power, natural gas, oil/liquids, hydroelectric) to communicate with candor when communicating with the Commission or certain Commission-approved entities. To date, FERC has relied upon a variety of its regulations – applicable in defined circumstances – in setting the expectation that persons and entities communicating with FERC will be accurate and truthful when addressing FERC-jurisdictional issues.
At its July Open Meeting on July 28, 2022, FERC proposed to revise 18 C.F.R. Pt. 1 to require that all entities communicating with FERC or other specified organizations on a matter related to FERC’s jurisdiction submit accurate and factual information, and not submit false or misleading information or omit material information.
If adopted, this proposed rule would broaden FERC’s Office of Enforcement’s purview to investigate potential violations of a duty of candor. The proposed rule would also subject a much broader group of energy market participants to potential investigation by the Office of Enforcement’s Division of Investigations.
Description of Proposed Duty of Candor Rule
The final vote on the NOPR was 4-1. Commissioner Danly dissented asserting, among other things, the proposed rule is “chillingly broad in its scope and, by its plain terms, would encompass constitutionally protected speech.”
Please contact Baker Botts with any questions you may have about this NOPR or if you need assistance in preparing or evaluating comments.
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