Civil Monetary Penalty Inflation Adjustments

<RULE> DEPARTMENT OF ENERGY <SUBAGY>Federal Energy Regulatory Commission</SUBAGY> <CFR>18 CFR Parts 250 and 385</CFR> <DEPDOC>[Docket No. RM24-3; Order No. 903]</DEPDOC> <SUBJECT>Civil Monetary Penalty Inflation Adjustments</SUBJECT> <HD SOURCE="HED">AGENCY:</HD> Federal Energy Regulatory Commission. <HD SOURCE="HED">ACTION:</HD> Final rule. <SUM> <HD SOURCE="HED">SUMMARY:</HD> The Federal Energy Regulatory Commission (Commission) is issuing a final rule to amend its regulations governing the maximum civil monetary penalties assessable for violations of statutes, rules, and orders within the Commission's jurisdiction. The Federal Civil Penalties Inflation Adjustment Act of 1990, as amended most recently by the Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015, requires the Commission to issue this final rule. </SUM> <EFFDATE> <HD SOURCE="HED">DATES:</HD> This final rule is effective January 11, 2024. </EFFDATE> <FURINF> <HD SOURCE="HED">FOR FURTHER INFORMATION CONTACT:</HD> Colin Chazen, Attorney, Office of Enforcement, Federal Energy Regulatory Commission, 888 First Street NE, Washington, DC 20426. Phone: (202) 502-8732; email: <E T="03">Colin.Chazen@ferc.gov</E> . </FURINF> <SUPLINF> <HD SOURCE="HED">SUPPLEMENTARY INFORMATION:</HD> 1. In this final rule, the Federal Energy Regulatory Commission (Commission) is complying with its statutory obligation to amend the civil monetary penalties provided by law for matters within the agency's jurisdiction. <HD SOURCE="HD1">I. Background</HD> 2. The Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015 (2015 Adjustment Act), <SU>1</SU> <FTREF/> which further amended the Federal Civil Penalties Inflation Adjustment Act of 1990 (1990 Adjustment Act), <SU>2</SU> <FTREF/> required the head of each Federal agency to issue a rule by July 2016 adjusting for inflation each “civil monetary penalty” provided by law within the agency's jurisdiction and to make further inflation adjustments on an annual basis every January 15 thereafter. <SU>3</SU> <FTREF/> <FTNT> <SU>1</SU>  Public Law 114-74, Sec. 701, 129 Stat. 584, 599. </FTNT> <FTNT> <SU>2</SU>  Public Law 101-410, 104 Stat. 890 (codified as amended at 28 U.S.C. 2461 note). </FTNT> <FTNT> <SU>3</SU>  28 U.S.C. 2461 note, at (4). The Commission made its January 2023 adjustment on January 6, 2023, in Docket No. RM23-3000. <E T="03">See Civil Monetary Penalty Inflation Adjustments,</E> Order No. 886, 88 FR 1989 (Jan. 12, 2023), 182 FERC ¶ 61,002 (2023). </FTNT> <HD SOURCE="HD1">II. Discussion</HD> 3. The 2015 Adjustment Act defines a civil monetary penalty as any penalty, fine, or other sanction that: (A)(i) is for a specific monetary amount as provided by Federal law; or (ii) has a maximum amount provided for by Federal law; (B) is assessed or enforced by an agency pursuant to Federal law; and (C) is assessed or enforced pursuant to an administrative proceeding or a civil action in the federal courts. <SU>4</SU> <FTREF/> This definition applies to the maximum civil penalties that may be imposed under the Federal Power Act (FPA), <SU>5</SU> <FTREF/> the Natural Gas Act (NGA), <SU>6</SU> <FTREF/> the Natural Gas Policy Act of 1978 (NGPA), <SU>7</SU> <FTREF/> and the Interstate Commerce Act (ICA). <SU>8</SU> <FTREF/> <FTNT> <SU>4</SU>  28 U.S.C. 2461 note at (3). </FTNT> <FTNT> <SU>5</SU>  16 U.S.C. 791a <E T="03">et seq.</E> </FTNT> <FTNT> <SU>6</SU>  15 U.S.C. 717 <E T="03">et seq.</E> </FTNT> <FTNT> <SU>7</SU>  15 U.S.C. 3301 <E T="03">et seq.</E> </FTNT> <FTNT> <SU>8</SU>  49 App. U.S.C. 1 <E T="03">et seq.</E> (1988). </FTNT> 4. Under the 2015 Adjustment Act, the first step for such adjustment of a civil monetary penalty for inflation requires determining the percentage by which the U.S. Department of Labor's Consumer Price Index for all-urban consumers (CPI-U) for October of the preceding year exceeds the CPI-U for October of the year before that. <SU>9</SU> <FTREF/> The CPI-U for October 2023 exceeded the CPI-U for October 2022 by 3.241%. <SU>10</SU> <FTREF/> <FTNT> <SU>9</SU>  28 U.S.C. 2461 note at (5)(b)(1). </FTNT> <FTNT> <SU>10</SU>   <E T="03">See, e.g.,</E> Memorandum from Shalanda D. Young, Office of Management and Budget, Implementation of the Penalty Inflation Adjustments for 2024, Pursuant to the Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015 (Dec. 19, 2023). </FTNT> 5. The second step requires multiplying the CPI-U percentage increase by the applicable existing maximum civil monetary penalty. <SU>11</SU> <FTREF/> This step results in a base penalty increase amount. <FTNT> <SU>11</SU>  28 U.S.C. 2461 note at (5)(a). </FTNT> 6. The third step requires rounding the base penalty increase amount to the nearest dollar and adding that amount to the base penalty to calculate the new adjusted maximum civil monetary penalty. <SU>12</SU> <FTREF/> <FTNT> <SU>12</SU>   <E T="03">Id.</E> </FTNT> 7. Under the 2015 Adjustment Act, an agency is directed to use the maximum civil monetary penalty applicable at the time of assessment of a civil penalty, regardless of the date on which the violation occurred. <SU>13</SU> <FTREF/> <FTNT> <SU>13</SU>   <E T="03">Id.</E> at (6). </FTNT> 8. The adjustments that the Commission is required to make pursuant to the 2015 Adjustment Act are reflected in the following table: <GPOTABLE COLS="3" OPTS="L2,tp0,i1" CDEF="s200,r100,r100"> <TTITLE> </TTITLE> <CHED H="1">Source</CHED> <CHED H="1"> Existing maximum civil monetary penalty </CHED> <CHED H="1"> New adjusted maximum civil monetary penalty <ENT I="01">16 U.S.C. 825o-1(b), Sec. 316A of the Federal Power Act</ENT> <ENT>$1,496,035 per violation, per day</ENT> <ENT>$1,544,521 per violation, per day.</ENT> </ROW> <ROW> <ENT I="01">16 U.S.C. 823b(c), Sec. 31(c) of the Federal Power Act</ENT> <ENT>$27,017 per violation, per day</ENT> <ENT>$27,893 per violation, per day.</ENT> </ROW> <ROW> <ENT I="01">16 U.S.C. 825n(a), Sec. 315(a) of the Federal Power Act</ENT> <ENT>$3,529 per violation</ENT> <ENT>$3,643 per violation.</ENT> </ROW> <ROW> <ENT I="01">15 U.S.C. 717t-1, Sec. 22 of the Natural Gas Act</ENT> <ENT>$1,496,035 per violation, per day</ENT> <ENT>$1,544,521 per violation, per day.</ENT> </ROW> <ROW> <ENT I="01">15 U.S.C. 3414(b)(6)(A)(i), Sec. 504(b)(6)(A)(i) of the Natural Gas Policy Act of 1978</ENT> <ENT>$1,496,035 per violation, per day</ENT> <ENT>$1,544,521 per violation, per day.</ENT> </ROW> <ROW> <ENT I="01">49 App. U.S.C. 6(10) (1988), Sec. 6(10) of the Interstate Commerce Act</ENT> <ENT>$1,566 per offense and $78 per day after the first day</ENT> <ENT>$1,617 per offense and $81 per day after the first day.</ENT> </ROW> <ROW> <ENT I="01">49 App. U.S.C. 16(8) (1988), Sec. 16(8) of the Interstate Commerce Act</ENT> <ENT>$15,662 per violation, per day</ENT> <ENT>$16,170 per violation, per day.</ENT> </ROW> <ROW> <ENT I="01">49 App. U.S.C. 19a(k) (1988), Sec. 19a(k) of the Interstate Commerce Act</ENT> <ENT>$1,566 per offense, per day</ENT> <ENT>$1,617 per offense, per day.</ENT> </ROW> <ROW> <ENT I="01">49 App. U.S.C. 20(7)(a) (1988), Sec. 20(7)(a) of the Interstate Commerce Act</ENT> <ENT>$1,566 per offense, per day</ENT> <ENT>$1,617 per offense, per day.</ENT> </ROW> </GPOTABLE> <HD SOURCE="HD1">III. Administrative Findings</HD> 9. Congress directed that agencies issue final rules to adjust their maximum civil monetary penalties notwithstanding the requirements of the Administrative Procedure Act (APA). <SU>14</SU> <FTREF/> Because the Commission is required by law to undertake these inflation adjustments notwithstanding the notice and comment requirements that otherwise would apply pursuant to the APA, and because the Commission lacks discretion with respect to the method and amount of the adjustments, prior notice and comment would be impractical, unnecessary, and contrary to the public interest. <FTNT> <SU>14</SU>   <E T="03">Id.</E> at (3)(b)(2). </FTNT> <HD SOURCE="HD1">IV. Regulatory Flexibility Statement</HD> 10. The Regulatory Flexibility Act, as amended, requires agencies to certify that rules promulgated under their authority will not have a significant economic impact on a substantial number of small businesses. <SU>15</SU> <FTREF/> The requirements of the Regulatory Flexibility Act apply only to rules promulgated following notice and comment. <SU>16</SU> <FTREF/> The requirements of the Regulatory Flexibility Act do not apply to this rulemaking because the Commission is issuing this final rule without notice and comment. <FTNT> <SU>15</SU>  5 U.S.C. 601 <E T="03">et seq.</E> </FTNT> <FTNT> <SU>16</SU>  5 U.S.C. 603, 604. </FTNT> <HD SOURCE="HD1">V. Paperwork Reduction Act</HD> 11. This rule does not require the collection of information. The Commission is therefore not required to submit this rule for review to the Office of Management and Budget pursuant to the Paperwork Reduction Act of 1995. <SU>17</SU> <FTREF/> <FTNT> <SU>17</SU>  44 U.S.C. 3507(d). </FTNT> <HD SOURCE="HD1">VI. Document Availability</HD> 12. In addition to publishing the full text of this document in the <E T="04">Federal Register</E> , the Commission provides all interested persons an opportunity to view and print the contents of this document via the internet through the Commission's Home Page ( <E T="03">http://www.ferc.gov</E> ). 13. From the Commission's Home Page on the internet, this information is available on eLibrary. The full text of this document is available on eLibrary in PDF and Microsoft Word format for viewing, printing, and downloading. To access this document in eLibrary, type the docket ━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━ Preview showing 10k of 15k characters. Full document text is stored and available for version comparison. ━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━