The self-reported violations related primarily to posting and bidding requirements for released natural gas pipeline capacity and the shipper-must-have-title requirement.
The company and the Federal Energy Regulatory Commission (FERC) concluded that the non-compliant transactions at the company’s retail natural gas subsidiary stemmed in part from the rapid growth of Constellation Energy’s retail natural gas business through a series of acquisitions from 2002 through 2006.
Constellation Energy said its retail natural gas unit took prompt self-corrective action to terminate or restructure contractual arrangements to ensure compliance with FERC’s capacity release regulations.
The utility said that it is also enhancing natural gas regulatory compliance controls to identify potential violations, and enhancing the legal and compliance functions for its retail gas subsidiary.
Under the FERC settlement agreement related to the self-reported violations, Constellation Energy’s retail natural gas unit will pay a civil penalty of $5 million. Additionally, the retail natural gas unit will pay out approximately $1.9 million in revenue associated with the non-compliant transactions.
