May 29th, 2008
Well, there goes OtterTail… they signed a Stipulation and Consent Agreement and have to cough up $546,832 + interest! Here’s the agreement:
What did they do?
(1) the improper use of network service to import energy that was used to facilitate off-system sales, and
(2) the improper use of transmission service that provided a superior curtailment priority than appropriate in certain instances.
What does it mean? They made a bunch of dough by violating FERC rules… oh, nevermind, they said they “neither admitted nor denied that the acts constituted violations of the tariff,” but they’ll cough up the dough. And here’s an interesting point — FERC let them off on at least one point:
10. Enforcement identified over 64 days during which Otter Tail scheduled delivery of 10,882 MWhs of energy from off-system non-designated short-term purchases, improperly using firm network transmission service instead of secondary network service. However, the advantage this gave Otter Tail is not readily quantifiable, and Enforcement therefore did not seek reimbursement for this violation.
The Federal Energy Regulatory Commission (FERC) today approved two stipulation and consent agreements that involve separate investigations by the Office of Enforcement into actions by Duquesne Light Company and Otter Tail Power Company.
The Otter Tail order (IN08-6-000) resolves alleged network transmission service violations by Otter Tail of the Open Access Transmission and Energy Markets Tariff (OATT) of the Midwest Independent Transmission System Operator (Midwest ISO). Otter Tail admitted it committed the acts in question, which pre-dated the Energy Policy Act of 2005, but neither admitted nor denied that the acts constituted violations of the tariff. However, it has agreed to disgorge $546,832 in profits, plus interest. Enforcement staff did not seek to impose a compliance monitoring plan on Otter Tail because now that the Midwest ISO’s Day 2 market is operational, its member utilities no longer schedule transmission within the system.
“This package of orders is important,” FERC Chairman Joseph Kelliher said. “The Duquesne order shows that the Commission is prepared to allow settlement funds to be used to strengthen corporate compliance programs. The Otter Tail order is a reminder to the regulated community that compliance with the open access transmission tariff is a core regulatory requirement.”
Thank you, little birdie!