The Chairman of the US Federal Energy Regulatory Commission presents at the EU Council their experience in market surveillance
The Chairman of the Federal Energy Regulatory Commission (FERC) of the United States, Norman Bay, presented today to the Working Party on Energy of the Council of the European Union a first-hand account of FERC's experience in wholesale energy market monitoring. Mr Bay was joined by Vice-Chair of ACER’s Administrative Board, Piotr Woźniak, Chairman of ACER’s Board of Regulators, Lord John Mogg, and ACER Director, Alberto Pototschnig. In 2009 the EU adopted the Regulation on wholesale energy markets integrity and transparency (REMIT) which gave ACER the task of collecting information on wholesale energy transactions from market participants across the Union. As EU energy markets continue to integrate, the objective of REMIT is to ensure that prices are not unduly distorted to the detriment of consumers.
Following the entry into force of the REMIT Implementing Acts in January 2015, the new monitoring framework with its reporting obligations will go live in October 2015. With the use of sophisticated software and expertise, ACER is to provide the first analysis of market transactions, which may lead to the identification of suspicious events. It will refer such cases to the competent National Regulatory Authorities who will investigate the matter further and, if required, impose sanctions.
The experience of the United States
In the US, the Federal Energy Regulatory Commission (FERC) is responsible both for market surveillance and enforcement of sanctions. ACER has been working with FERC since before REMIT entered into force. Earlier this year, the Agency and FERC signed a Memorandum of Understanding on consultation, cooperation and the exchange of information related to the monitoring of wholesale energy markets.
FERC’s experience shows the importance of strong market surveillance. In 2013, for example, FERC concluded several market abuse investigations, including two high-profile cases in which unjust profits amounting to around US$ 160 million were identified.