WHEREAS, Sections 30 and 37(f) of the Electric Power Industry Reform Act (EPIRA) provides that the DOE, jointly with the electric power industry participants, shall establish the Wholesale Electricity Spot Market (WESM) and formulate the detailed rules governing the operations thereof;

WHEREAS, on 28 June 2002, the DOE, with the endorsement of the electric power industry participants, promulgated the WESM Rules through Department Circular No. DC200206-003;

WHEREAS, WESM Rules, as amended, mandates the Market Surveillance Committee (MSC) to design and regularly review penalty levels and appropriate ranges of penalties for breach of the WESM Rules;