A Durham-based energy company accused of collecting hundreds of millions of dollars for electricity savings it did not produce has filed for bankruptcy protection three months after federal regulators imposed more than $1.1 billion in penalties and repayments.
American Efficient LLC filed for Chapter 11 bankruptcy on July 18 in the US Bankruptcy Court for the Western District of North Carolina. The company reported assets of between $1 million and $10 million and liabilities of approximately $1.4 billion, according to court records.
Ben Abram, managing director of American Efficient, was not immediately available for comment.
The filing offers the clearest indication yet of the financial consequences facing American Efficient after the Federal Energy Regulatory Commission concluded in April that the company and several affiliates operated a decade-long scheme involving wholesale electricity markets.
On April 15, the Federal Energy Regulatory Commission ordered American Efficient LLC and five affiliated companies to pay $722 million in civil penalties and return nearly $410 million, plus interest, to two regional electricity markets.
FERC described the operation as one of the largest and most brazen fraud schemes in the commission’s history. American Efficient denies wrongdoing and says its participation in the markets was repeatedly reviewed and approved by the entity that FERC says was defrauded.
“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,” FERC Chairman Laura V. Swett said in a release announcing the findings. “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.”
The case centers on American Efficient’s participation in wholesale capacity markets operated by PJM Interconnection and the Midcontinent Independent System Operator (MISO).
Capacity markets pay power suppliers and other resources to ensure sufficient electricity is available when demand is high. Energy-efficiency programs can participate by demonstrating that they will produce measurable reductions in electricity use, reducing the amount of generating capacity needed to maintain reliability.
American Efficient contracted with manufacturers, retailers, and distributors that sold energy-efficient appliances, lighting, and other products. Its partners included major retailers such as Lowe’s, Home Depot, and Walmart.
The company obtained product sales information and contractual rights, which it said allowed it to calculate and claim the electricity savings associated with those purchases. It then bundled those projected savings and sold them into wholesale capacity auctions.
FERC concluded that American Efficient generally had no relationship with the consumers who purchased its products and lacked the authority to produce, control, or commit to reductions in electricity use.
Regulators said the company instead paid retailers and manufacturers pennies or fractions of a penny for product data, then claimed credit for efficiency improvements that would have occurred without its involvement.
FERC said American Efficient did not demonstrate that the payments caused retailers to promote efficient products or that consumers purchased them because of the program.
FERC also found that American Efficient claimed savings tied to products sold before it entered into agreements with the businesses that provided the sales data. The company referred to those earlier transactions as “historicals.”
FERC said the company collected nearly $500 million through what it called a “money-for-nothing scheme” that violated federal market-manipulation law and the tariffs governing PJM and MISO.
American Efficient has argued that FERC misunderstood the company’s contracts and measurement methods. It has also been said that PJM approved its participation more than 30 times during approximately a decade of market activity.
Despite the size of the penalty, the April order is not yet equivalent to a final federal court judgment.
The bankruptcy filing comes after the deadline for American Efficient to pay FERC’s $722 million civil penalty passed without a public announcement of payment.
Under the Federal Power Act, FERC must seek enforcement in federal district court when an assessed penalty remains unpaid for 60 days. The district court would review the case de novo, allowing American Efficient to present evidence and legal arguments to a judge and, if applicable, a jury.
FERC’s April 15 order triggered a 60-day period that ended in mid-June. As of July 22, FERC’s public enforcement records did not identify a separate federal court complaint seeking affirmation of the civil penalty.
The bankruptcy does not itself overturn FERC’s findings or resolve American Efficient’s challenge. It places the company’s debts and assets under bankruptcy court supervision while the underlying regulatory and legal disputes continue.
It could, however, substantially complicate FERC’s effort to collect the penalty and disgorgement. The company’s reported liabilities are more than 100 times the high end of its estimated asset range.
American Efficient and Affirmed Energy also has a separate constitutional lawsuit pending against FERC in the US District Court for the Middle District of North Carolina.
The companies filed that case in January 2025, arguing that FERC’s process violated their right to have the fraud allegations decided by a jury and an Article III judge. They also challenged protections limiting a president’s ability to remove FERC commissioners.
US District Judge Thomas Schroeder denied their request for a preliminary injunction in November 2025, allowing FERC’s proceeding to continue. The underlying constitutional claims remain unresolved.
The bankruptcy and FERC case have also drawn attention to the people behind the Durham company and their history of supporting former Gov. Roy Cooper and other North Carolina Democrats.
Abram, a Chapel Hill native and Duke University graduate, acquired American Efficient in 2013 and developed the wholesale capacity-market model at the center of the FERC case.
He later co-founded Modern Energy, which says it owns American Efficient, and serves as the parent company’s CEO. FERC did not assess a civil penalty against Abram personally; instead, it imposed liability on American Efficient, Modern Energy, and four other affiliated companies.
Abram’s father, J. Adam Abram, is a longtime Triangle businessman with interests in real estate, banking, and insurance. Cooper appointed Adam Abram chairman of the North Carolina Housing Finance Agency’s board in 2019.
Members of the Abram family contributed $72,850 to Cooper’s campaigns for attorney general and governor and another $22,000 to his current US Senate campaign, according to FEC filings. The family also contributed $200,000 to the North Carolina Democratic Leadership Committee, a separate political committee previously controlled by Cooper.
In total, members of the Abram family have made at least 244 contributions totaling $886,526.45 to North Carolina Democrats since 1991.
The NC Republican Party has argued that Cooper’s efforts to expand North Carolina’s clean-energy economy stood to benefit American Efficient and the Abram family. Its public statement, however, did not identify a state contract, grant, or regulatory decision awarded to American Efficient.
In response to questions from Carolina Journal, Cooper’s Senate campaign did not directly address when the former governor learned of the FERC investigation, whether it would return the Abram family’s contributions, or whether political donations influenced Adam Abram’s appointment.
Instead, the campaign criticized Republican US Senate candidate Michael Whatley before defending Cooper’s record.
“Roy Cooper spent his career cracking down on fraud, recovering hundreds of millions in taxpayer money and holding major corporations accountable when ripping off North Carolinians,” a Cooper campaign spokesperson told Carolina Journal.
FERC’s case does not allege that Cooper, his administration, or another North Carolina official participated in the conduct. The disputed payments came from federally regulated wholesale capacity markets rather than a North Carolina program controlled by the governor’s office.
