ERAC Regulatory Compliance & Legal Framework

Question 1

Which agency is primarily responsible for regulating interstate electricity markets in the US?

Accepted Answer

FERC

Answer

The Federal Energy Regulatory Commission (FERC) is an independent agency that regulates the interstate transmission of electricity, natural gas, and oil in the United States. It also reviews proposals to build interstate natural gas pipelines, natural gas storage facilities, and hydropower projects. FERC's role is vital for ensuring reliable, efficient, and fair energy markets.

Question 2

What is the main purpose of the Sarbanes-Oxley Act (SOX) in the energy sector?

Accepted Answer

Improve corporate governance

Answer

The Sarbanes-Oxley Act (SOX) was enacted in response to major corporate accounting scandals to protect investors by improving the accuracy and reliability of financial reporting. In the energy sector, like others, SOX mandates stricter internal controls, increased executive accountability, and enhanced transparency. This helps prevent fraud and ensures sound corporate governance practices.

Question 3

Which law requires companies to disclose material risks to investors?

Accepted Answer

Securities Exchange Act

Answer

The Securities Exchange Act of 1934 is a foundational piece of US securities law that governs the secondary trading of securities. It requires publicly traded companies, including those in the energy sector, to file periodic reports and disclose material information, including risks, to investors. This ensures transparency and helps investors make informed decisions about their investments.

Question 4

What is the role of compliance programs in energy companies?

Accepted Answer

Ensure legal and regulatory adherence

Answer

Compliance programs in energy companies are designed to ensure that all operations, activities, and employees adhere to applicable laws, regulations, internal policies, and ethical standards. Given the highly regulated nature of the energy industry, robust compliance programs are essential to avoid legal penalties, reputational damage, and operational disruptions. They foster a culture of integrity and accountability.

Question 5

Which regulatory framework governs greenhouse gas emissions reporting?

Accepted Answer

Greenhouse Gas Reporting Program

Answer

The Greenhouse Gas Reporting Program (GHGRP) is an EPA initiative that requires large greenhouse gas (GHG) emission sources, fuel and industrial gas suppliers, and CO2 injection sites in the United States to report their GHG data. This program provides comprehensive data to inform climate policy and track emissions trends across various sectors, including energy. It is a key tool for environmental regulation.

(ERAC) Energy Risk Auditor Certification Practice Test

(ERAC) Energy Risk Auditor Certification Practice Test

ERAC Regulatory Compliance & Legal Framework