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Amaranth Calls FERC's Bluff in Settlement Rejection

By Bill Wolf

On March 16, 2009, Amaranth Advisors asked FERC to reconsider its earlier order rejecting the settlement that it had reached with the FERC Staff.  As previously reported, FERC rejected the uncontested settlement agreement with a simple statement that read: ""[h]aving considered the gravity of the alleged violations, the potential remedies for those violations if proven to have occurred, and the remedies offered in the Settlement, the Commission concludes that the settlement is not in the public interest and hereby rejects it."

Amaranth chastised FERC in its pleading for failing to provide any meaningful rationale to support its curt rejection of a settlement agreement that, according to Amaranth, took tremendous time and resources to negotiate.  Without FERC's rationale as to why the settlement was rejected, Amaranth argued that continued settlement negotiations would not be fruitful and the parties would be better off gearing up for trial. 

While FERC likely thinks it could fare better with either a new settlement agreement or at trial, Amaranth is calling FERC's bluff.  Who blinks first could have far-reaching ramifications for the rigor of future FERC's enforcement.

Full post as published by Energy Legal Blog on March 27, 2009 (boomark / email).