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Merchant Generator Reaches $3 Million Settlement With FERC Over Alleged Manipulation

March 31, 2016

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Copyright 2010-16 EnergyChoiceMatters.com
Reporting by Paul Ring • ring@energychoicematters.com

FERC has approved a $3 million settlement between its Office of Enforcement (Enforcement) and Berkshire Power Company LLC (Berkshire) and Power Plant Management Services LLC (PPMS) to resolve an investigation into whether Berkshire and PPMS violated certain anti-manipulation rules as a result of their behavior related to plant outages between January 1, 2008 and March 30, 2011 (the Relevant Period).

Berkshire and PPMS will pay a civil penalty of $2 million. Berkshire will also disgorge over $1 million plus interest, and will pay an additional civil penalty of $30,000 for what FERC said were, "violations of the Reliability Standards."

FERC's order adopting the settlement states, "At the Projects General Manager's direction, Berkshire Power engaged in a fraudulent scheme to perform unreported maintenance work and to conceal that work and associated maintenance outages from ISO-NE. Individuals at the Plant scheduled maintenance work for times when the Plant was unlikely to be dispatched and then failed to notify ISO-NE about the work or the associated Plant unavailability. The Projects General Manager continued this scheme even after the Third Party plant manager confronted him and informed him that his actions likely were illegal. As a result, Berkshire failed to report at least 16 separate periods of significant maintenance-related outages between January 2008 and March 2011, when the Projects General Manager was removed from his position at the Plant (due to discovery of potential violations of federal and state environmental laws at the Plant) and the scheme ended."

FERC's order adopting the settlement states, "The Projects General Manager instructed the control room operators that if they received a dispatch call from ISO-NE during a time that the generator was unavailable, they should act as if it were available, acknowledge the request, and then call the Projects General Manager. If ISO-NE asked how soon the Plant could start, he directed them generally to respond “within one hour.” The Projects General Manager then called ISO-NE dispatch office himself or told the operator to wait for some amount time and then call ISO-NE and (falsely) assert that the Plant had experienced an unanticipated problem during start-up."

Docket No. IN16-3

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