FERC Penalizes ‘Money-for-Nothing’ Energy Efficiency Fraud by American Efficient

Docket No. IN24-2-000 | Executive Summary | Chairman Swett's Concurrence

The Federal Energy Regulatory Commission (FERC) today issued a penalty order in its enforcement action against American Efficient, LLC and affiliated entities, uncovering what the Commission describes as one of the largest and most brazen fraud schemes in its history. FERC orders "energy efficiency" company American Efficient to pay $722 million in civil penalties and disgorge $410 million in unjust profits, plus interest.

After a multi-year investigation, FERC finds that American Efficient stole nearly $500 million from U.S. consumers by claiming compensation for fake energy efficiency resources in federally regulated capacity markets.

"This case represents an extraordinary and deeply troubling breach of public trust-a meticulously orchestrated scheme that siphoned hundreds of millions of dollars away from hardworking American families and businesses. Such blatant disregard for the rules not only threatens the integrity of our energy markets but also undermines the confidence consumers place in these systems. FERC must remain unwaveringly vigilant and proactive, ensuring that we hold every market participant accountable and that we safeguard consumer interests."-FERC Chairman Laura V. Swett

FERC finds that American Efficient committed fraud for over ten years, violating PJM and MISO market rules, the Federal Power Act, and anti-manipulation regulations. American Efficient operated a sweeping money-for-nothing scheme to extract capacity payments from PJM and MISO by falsely claiming ownership and control of energy efficiency resources. Instead of providing the market with actual energy reductions, the company paid retailers and manufacturers micropayments of pennies or fractions of pennies for basic sales data, then used those records to claim credit for energy reductions it played no role in producing. The flagrantly illegal, paper-shoveling scheme allowed American Efficient to clear more than 20 gigawatts of fraudulent capacity in PJM's market alone.

Today's action stems from the Commission's December 2024 Order to Show Cause and Notice of Proposed Penalty against American Efficient and its affiliated entities on market manipulation and tariff violations. Learn more about the Commission's civil penalty authority here .