(a) This section implements the authority delegated to the Commission by Texas Natural Resources Code, §81.058(c), which provides that the Commission, after notice and opportunity for hearing, may impose an administrative penalty against a purchaser, transporter, gatherer, shipper, or seller of natural gas who is a party to an informal complaint resolution proceeding and is determined by the Commission to have failed to participate in the proceeding or failed to provide information requested by a mediator in the proceeding. This section applies to informal complaint resolutions proceedings filed pursuant to §2.1 of this title (relating to Informal Complaint Procedure), and §2.5 of this title (relating to Informal Complaint Process Regarding Loss of or Inability to Account for Gas.
(b) Failure to participate in an informal complaint resolution proceeding may include:
  (1) a person who gathers or transports gas not providing, by the 30th day after the date the person receives a request from a producer, a written explanation of any loss of or inability to account for the gas tendered to the person by the producer;
  (2) a respondent not replying in writing to both the monitor and the complainant within 14 calendar days from the date of the monitor's notification letter that a complaint has been filed at the Commission;
  (3) a respondent's written reply that does not address the substance of the complaint;
  (4) a respondent's written reply that does not either propose a solution or explain why the complaint is incorrect;
  (5) a person who gathers or transports gas not providing, by the 14th day after the date a complaint is filed at the Commission, the producer and the Commission an accounting of the gas tendered to the person by the producer for gathering or transport during the production period covered by the complaint;
  (6) if the Commission has granted an extension of time to the person who gathered or transported the gas to provide the accounting required by §2.5(e)(3) of this title, the failure of the person to respond by the deadline;
  (7) if the person who gathered or transported the gas does not have the information necessary to provide the accounting required by §2.5(e)(3) of this title, the failure of the person to provide to the producer and to the Commission a written explanation of the reason the person does not have the information;
  (8) the person who gathered or transported the gas not providing either the accounting required by §2.5(e)(3) of this title or the explanation required by §2.5(e)(5) of this title;
  (9) a complainant or a respondent not communicating with the other during the 14 calendar days from the date of the respondent's reply to attempt resolve the complaint without the participation of a mediator;
  (10) a complainant or a respondent not advising the Commission monitor within seven days after expiration of the period allowed for informal resolution whether the person wants the matter referred to a Commission or non-Commission mediator;
  (11) in the event the complainant and respondent desire to use a non-Commission employee mediator and are unable to agree upon the selection of a non-Commission employee mediator, failure of a complainant or a respondent to submit the name of a preferred mediator to work with the other's preferred mediator to choose a third mediator who will preside over the process;
  (12) a complainant or respondent not providing documents or information the mediator considers necessary in evaluating the complaint and has requested;
  (13) a complainant or respondent not attending a scheduled mediation meeting, absent good cause and prior notice to all participants;
  (14) a complainant or respondent not participating in the mediation meeting or not undertaking in good faith to settle all issues raised in the complaint; or
  (15) a complainant or respondent not making available during the mediation meeting, in person, representatives who are empowered to make decisions on their behalf.
(c) An administrative penalty imposed under this section may not exceed $5,000 a day for each violation. Each day a violation continues or occurs is a separate violation for purposes of imposing a penalty under this section.
(d) The amount of any penalty requested, recommended, or finally assessed in an enforcement action brought pursuant to this section will be determined on an individual case-by-case basis for each violation, taking into consideration the following factors:
  (1) the person's history of previous violations of §2.1 or §2.5 of this title, including the number of previous violations;
  (2) the demonstrated good faith of the person charged; and
  (3) any other factor the Commission considers relevant.
(e) The recommended penalty for a violation may be reduced by up to 50% if the person charged agrees to a settlement before the Commission conducts an administrative hearing to prosecute a violation. Once the hearing is convened, the opportunity for the person charged to reduce the penalty is no longer available.
(f) The remedy provided by this section is cumulative of any other remedy the Commission may order.

Source Note: The provisions of this §2.7 adopted to be effective April 28, 2008, 33 TexReg 3388