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Section 10 of Executive Order No. 13892: FERC’s Compliance with Section 223 of 

the Small Business Regulatory Enforcement Fairness Act 

I. Introduction

On October 9, 2019, President Trump issued Executive Order No. 13892,

Promoting the Rule of Law Through Transparency and Fairness in Civil Administrative 

Enforcement and Adjudication. Section 10 of the executive order requires all agencies, by 

April 6, 2020, to submit a report to the President demonstrating that the agency’s 

enforcement and investigation activities comply with section 223 of the Small Business 

Regulatory Enforcement Fairness Act (SBREFA). See Small Business Regulatory 

Enforcement Fairness Act of 1996, Pub. L. No. 104-121, 110 Stat. 864 (1996). In 

compliance with Executive Order No. 13892, the Federal Energy Regulatory Commission 

(Commission or FERC) submits this report demonstrating its on-going compliance with 

section 223 of the SBREFA.

II. Section 223 of the SBREFA

Section 223(a) of SBREFA requires agencies to establish a policy or program, “to 

provide for the reduction, and under appropriate circumstances for the waiver, of civil 

penalties for violations of a statutory or regulatory requirement by a small entity.” Section 

233(a), further states that “[u]nder appropriate circumstances, an agency may consider 

ability to pay in determining penalty assessments on small entities.” 

Specifically, the agency can condition the reduction or waiver of a civil penalty on 

the entity correcting a violation within a reasonable period. See SBREFA Section 223(b). 

Moreover, the agency can exclude small entities that are subject to multiple enforcement 

actions, are engaged in criminal or willful conduct, or pose serious safety or environmental 

threats from its penalty reduction program. Id. 

III. The Commission complies with Section 223 of the SBREFA

FERC complies with section 233 of the SBREFA through its regulations and 

policies that provide for the reduction, and under appropriate circumstances, for the waiver 

of civil penalties for violations of statutory or regulatory requirements by small entities. 

A. The Commission’s Regulations Comply with the SBREFA. 

Section 2.500 of the Commission’s regulations implements section 223 of 

SBREFA:
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It is the policy of the Commission that any small entity is eligible to be 

considered for a reduction or waiver of a civil penalty if it has no history of 

previous violations, and the violations at issue are not the product of willful 

or criminal conduct, have not caused loss of life or injury to persons, property 

or the environment. An eligible small entity will be granted a waiver if it can 

also demonstrate that it performed timely remedial efforts, made a good faith 

effort to comply with the law and did not obtain an economic benefit from 

the violations. An eligible small entity that cannot meet the criteria for 

waiver of a civil penalty may be eligible for consideration of a reduced 

penalty. Upon the request of a small entity, the Commission will consider 

the entity’s ability to pay before assessing a civil penalty. Notwithstanding 

paragraph (a) of this section, the Commission reserves the right to waive or 

reduce civil penalties in appropriate circumstances where it determines that 

a waiver is warranted by the public interest.

Statement of Compliance with Section 223 of the Small Business Regulatory Enforcement 

Fairness Act of 1996, 62 Fed. Reg. 15,827-02 (Apr. 2, 1997), codified at 18 C.F.R. § 2.500. 

B. The Commission’s Guidance Documents Comply with the SBREFA.

The Commission has two policy statements that provide guidance on the reductions

or waivers of civil penalties available for small entities, and how the Commission considers

the size of an organization in civil penalty assessments. 

First, in its Policy Statement on Enforcement of FERC’s Statutes, Regulations and

Orders, the Commission adopted a “generally applicable policy for considering reductions

or waivers of penalties for small entities.” See Enforcement of Statutes, Orders, Rules, and 

Regulations, 113 FERC ¶ 61,068 (2005) (emphasis added). The Commission later revised 

the Policy Statement on Enforcement to, among other changes, provide factors that the 

Commission would consider when setting penalties, including the “earnings, revenues and 

market share” of the subject and “what penalty amount best discourages improper conduct, 

while not excessively discouraging beneficial market participation[.]” Revised Policy 

Statement on Enforcement, 123 FERC ¶ 61,156 (2008). 

Second, in the Commission’s Revised Policy Statement on Penalty Guidelines, the 

Commission explained that in setting a civil penalty the Commission may “consider the 

size and non-profit status of organizations, including the impact that the guidelines’ penalty 

range could have on a particular organization based on its size or non-profit status” The 

Commission also noted that it had “the discretion to examine the facts and circumstances 

of a case, including the size and non-profit status of an organization, and to depart from the 

Penalty Guidelines based on these factors.” Overall, the Commission indicated that it (1) 

may reduce the penalty amount or take non-monetary enforcement action, for entities 

unable to pay; (2) considers size of the organization in the context of analyzing credit for 
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compliance programs; (3) may accept a penalty lower in the penalty guideline range for a 

smaller company; (4) may accept a payment plan; and/or (5) may depart from the penalty 

guidelines based on the size of an organization and/or other specific circumstances of the 

matter. Revised Policy Statement on Penalty Guidelines, 132 FERC ¶ 61,216 (2010).

C. The Commission offers Additional Resources on Enforcement Activities for 

Small Businesses. 

The Commission provides numerous publicly available resources for the regulated 

community, including small businesses, about the agency’s enforcement and investigation 

activities. See FERC, Enforcement Resources, (November 21, 2018) 

https://www.ferc.gov/enforcement/enforce-res.asp. The Commission also provides an 

Enforcement hotline that market participants and the general public can call, email or write 

to discuss market activities or transactions that may be market manipulation, fraud, an 

abuse of an affiliate relationship, a tariff violation, a violation of a Commission order, or 

other possible violation. All information and documents obtained through the Hotline are 

non-public. Finally, the Commission often convenes public forums that provide regulated 

entities, including small business owners, with an opportunity to raise questions about 

specific regulatory issues. 

IV. Conclusion

As detailed above, FERC complies with section 233 of the SBREFA. The 

Commission has established policies and procedures that provide for the reduction and,

under appropriate circumstances, for the waiver of civil penalties for violations of statutory 

or regulatory requirements by small entities. Through this process, the Commission 

remains available to hear the concerns of small business, and to make any needed changes 

to address any unanticipated impacts on small business.