Legalectric

Shame on you, you naughty utilities! FERC is investigating yet another utility for scheduling transmission reservations for local load and instead using them for wholesale sales, or put another way,  using network transmission service instead of point-to-point service to import power to facilitate off-system sales. Remember when Otter Tail Power got nailed for that recently?

Otter Tail Power to Disgorge $546,832 + Interest

It’s not like this is anything new, but I think it’s a lot more widespread, and given the market basis for electricity sales, it’s “incented” in the systemic structure, and FERC’s power to act on these violations is relatively new.  Here are some more examples:

FERC – SCANA – Stipulation & Consent Agreement

FERC – PacifiCorp – Stipulation & Consent Agreement

And I’ll spend a little time digging up some more…

Anyway, now Westar Energy in Kansas is under investigation, and reported this in a recent SEC filing. Here’s the story that popped up on that:

Westar’s power line use probed

By DUANE SCHRAG

Salina Journal

Federal regulators are looking into whether Westar Energy manipulated use of transmission lines, a practice that would drive up the cost of electricity to consumers.

“There was a question that came up, whether we have been over-reserving the level of capacity and preventing others’ use of the lines,” said Bruce Burns, director of investor relations at Westar Energy.

The Federal Energy Regulatory Commission investigation was noted in Westar’s quarterly filing with the Securities and Exchange Commission, which was posted Friday.

“We are responding to a preliminary, nonpublic investigation by FERC of our use of transmission service … in 2006 and 2007,” Westar told investors, adding that it believes the company complied with all regulations.

Utilities schedule capacity on the lines, based on their estimates of how much power their customers will use.

At issue is whether Westar deliberately scheduled more capacity than it needed, Burns said.

He wasn’t certain when the regulatory commission began its investigation, but believes it has been ongoing for the better part of 2008.

Federal law requires that all utilities be allowed open access to transmission lines, regardless of who actually owns them. Line owners receive royalties for use of their lines.

Reporter Duane Schrag can be reached at 822-1422 or by e-mail at dschrag@salina.com.

Also noteworthy is that Westar Energy had, like many utilities, a DECREASE in sales, in the case of Westar, 2% decrease admitted in a November 7, 2008 press release.

How many other utilities out there are under investigation, and how many are NOT under investigation when they should be? Something tells me this is a common practice.