FERC's Two-Front Enforcement Campaign

Author: John Patrick Herold | Date: 2026-04-25 | Source: Site News

Core Argument

FERC is running parallel campaigns: tightening grid entry via interconnection-queue-reform and enforcing hard consequences at the point of grid obligation via a record $1.1B civil penalty against demand-response aggregator American Efficient LLC.

American Efficient / PJM Capacity Fraud

Operated as DR aggregator in pjm-capacity-market (RPM/BRA)
Alleged misrepresentation of DR resource availability and performance
Collected capacity revenues against obligations resources could not reliably support
PJM BRA cleared ~$269.92/MW-day for 2025/2026 vs. sub-$50 in 2022/2023 — ~5–6x price increase magnified penalty base
Prior FERC penalties dwarfed: Constellation ~$34.9M (2013); Powhatan ~$30M; EDF Trading ~$4.5M

Compliance Gap: DR vs. Generation

Physical generators: NERC standards, telemetry, real-time metering
DR aggregators: softer M&V protocols, third-party enrollment data, multi-party verification chain
FERC applied same fraud standard to DR as to physical market participants — precedent shift

PPA Counterparty Exposure

C&I PPAs with DR riders or capacity tag pass-throughs carry hidden compliance risk
Potential exposure: credit support calls, termination events, direct liability
Project finance lenders must diligence aggregator compliance representations

Global Parallel

Brazil's aneel-enforcement imposing nine-figure penalties on distribution companies — similar regulatory direction on demand-side performance

Watch List

FERC IN-series docket on American Efficient via eLibrary
PJM BRA 2026/2027 results and DR participation rule adjustments
FERC Commissioner statements on enforcement posture