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Rejecting Concerns from Retail Suppliers, FERC Approves Settlement Foregoing $10 Million Originally Ordered to be Repaid to Market from Trader
FERC has approved a settlement between DC Energy, LLC, Scylla Energy LLC, and PJM resolving disputes concerning the application of deviation charges to internal bilateral transactions (IBTs) that waives payment of $10 million of the amount originally ordered to be paid by certain market participants.
In short, a prior FERC order found that PJM appropriately assigned deviation charges to certain traders who characterized certain transactions as IBTs to avoid such charges. A total of nearly $50 million was to be rebilled and paid to the market from such IBT traders.
DC Energy appealed FERC's order, and it and PJM entered mediation at the prompting of the court.
That process resulted in a settlement under which PJM would retain $38 million in already rebilled and collected deviation charges related to FERC's order, but under which PJM would forego collection of the final $10 million owed to the market.
The market monitor protested that settlement, noting that it means that PJM Members will not receive an estimated $10.2 million to which the Commission has found that they are entitled, "and that unspecified persons, apparently DC Energy, would retain an estimated $10.2 million to which the Commission has found that they are not entitled."
"What interest the Settlement serves PJM is a mystery, as PJM has agreed to unilaterally surrender the result that it sought and obtained in the Final Orders," the IMM said.
The IMM also criticized the settlement for being negotiated without the monitor or PJM members being involved.
The Retail Energy Supply Association filed comments noting, "PJM has settled this proceeding with DC Energy with other people's money, including amounts that would go to RESA members. PJM has failed to be transparent in its dealings with market participants. At a minimum, if PJM thought it would be desirable to settle, PJM should have brought this matter to market participants, decided whether: (1) PJM has the authority to enter into settlements on behalf of market participants; and, if so (2) whether this settlement was the right course of action in light of the circumstances present."
FERC dismissed such concerns, and approved the settlement
Docket EL12-8
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September 30, 2014
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Copyright 2010-14 EnergyChoiceMatters.com
Reporting by Paul Ring • ring@energychoicematters.com
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