FERC has stated that it maintain our practice of awarding penalty credit for “will parties that promptly self-report violations, assuming such conduct is not negated by a poor compliance culture.” A study by NERC found that in 2012 approximately ninety percent of the violations of its regulations for critical infrastructure were self-identified and reported to NERC through its voluntary reporting procedures. The FAA has described the reasoning behind its voluntary disclosure reporting program as follows: Civil penalties, under the FAA’s enforcement program, have always been considered a means to promote compliance with the FAA’s regulations, not an end in themselves. In addition to the deterrence achieved by the appropriate use of civil penalties, the public interest is also served by positive incentives to promote and achieve compliance. Indeed, the FAA believes that aviation safety is well served by incentives for certificate holders… to identify and correct their own instances of noncompliance and to invest more resources in efforts to preclude their recurrence. The FAA’s policy of forgoing civil penalty actions when one of these entities detects violations, promptly discloses the violations to the FAA, and takes prompt corrective action to ensure that the same or similar violations do not recur is designed to encourage compliance with the FAA’s regulations, foster safe operating practices, and promote the development of Internal Evaluation Programs (IEPs). By its language, SB 291 arguably has the intent that the reporting of self-identified potential violations should be voluntary. The Commission appears to have expressed this view of SB 291 in the Order instituting R.14-05-013 and in D.14-12-001. SB 291 directs that voluntary utility reporting of potential violations will be taken into account in considering citations and penalties. However, if reporting of potential violations is mandatory, such reports might not properly be considered a mitigating factor. Finally, it appears from opening comments that Pacificorp and PG&E, at least, assume the self-reporting will be voluntary.
FERC has stated that it “will maintain our practice of awarding penalty credit for parties that promptly self-report violations, assuming such conduct is not negated by a poor compliance culture.” A study by NERC found that in 2012 approximately ninety percent of the violations of its regulations for critical infrastructure were self-identified and reported to NERC through its voluntary reporting procedures. The FAA has described the reasoning behind its voluntary disclosure reporting program as follows: Civil penalties, under the FAA’s enforcement program, have always been considered a means to promote compliance with the FAA’s regulations, not an end in themselves. In addition to the deterrence achieved by the appropriate use of civil penalties, the public interest is also served by positive incentives to promote and achieve compliance. Indeed, the FAA believes that aviation safety is well served by incentives for certificate holders… to identify and correct their own instances of noncompliance and to invest more resources in efforts to preclude their recurrence. The FAA’s policy of forgoing civil penalty actions when one of these entities detects violations, promptly discloses the violations to the FAA, and takes prompt corrective action to ensure that the same or similar violations do not recur is designed to encourage compliance with the FAA’s regulations, foster safe operating practices, and promote the development of Internal Evaluation Programs (IEPs). By its language, SB 291 arguably has the intent that the reporting of self-identified potential violations should be voluntary. The Commission appears to have expressed this view of SB 291 in the Order instituting R.14-05-013 and in D.14-12-001. SB 291 directs that voluntary utility reporting of potential violations will be taken into account in considering citations and penalties. However, if reporting of potential violations is mandatory, such reports might not properly be considered a mitigating factor. Finally, it appears from opening comments that Pacificorp and PG&E, at least, assume the self-reporting will be voluntary.
167781364.docx