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FERC Terminates Show Cause Proceeding Into Generator, No Penalty Assessed As Staff Agrees No Violation Occurred

February 26, 2019

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Copyright 2010-19 EnergyChoiceMatters.com
Reporting by Paul Ring • ring@energychoicematters.com

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FERC has terminated a show cause proceeding, with no penalty, into Footprint Power LLC and Footprint Power Salem Harbor Operations LLC after Enforcement Staff agreed that no tariff violation occurred upon the review of new information provided by Footprint during the proceeding

On June 18, 2018, FERC had ordered Footprint Power LLC and Footprint Power Salem Harbor Operations LLC (collectively, Footprint) to show cause why it should not be found to have violated ISO New England Inc.’s (ISO-NE) Transmission, Markets and Services Tariff (Tariff) and Commission regulations.

See background on the proceeding here

In its order terminating the proceeding, FERC noted that its Order to Show Cause had, among other things, "ordered Footprint to show cause why it should not be found to have violated ISO-NE Tariff, Market Rule 1, §§ III.1.7.20(b) and (f), III.1.10.1A(d), and III.13.6.1.1.2 by submitting false and misleading supply offers for Unit 4 of Footprint’s multi-unit Salem Harbor Power Plant in Salem, Massachusetts and by failing to report the fuel status and related operational status of Unit 4 to ISO-NE from June 26, 2013 through July 25, 2013 (Relevant Period)."

Footprint submitted an answer to the show cause order, and a report from Office of Enforcement (OE) Staff which served as the basis for the order, with the answer described by FERC as follows: "The Answer argues, inter alia, that OE Litigation Staff ignored Unit 4’s start-up and ramp time and the related impact on fuel consumption. Footprint states that, on any day that Unit 4 had not recently run, it would require 16 hours to start and reach its EcoMin level of 160 MW, during which it would consume only 745 barrels of oil. Footprint states that Unit 4 would require an additional 90 minutes to ramp to its EcoMax level, during which oil consumption would continue to remain below the rate it would attain during full, EcoMax generation. Footprint argues that, given the 17.5-hour start-up and ramping period, even if ISO-NE directed Unit 4 to begin the start-up process immediately at 1:00 p.m., the earliest that the unit could be expected to be up and running at EcoMax would be 6:30 a.m. the next day. Therefore, even if the unit ran at full-load for the remainder of the day, it still would only run at EcoMax for 17.5 hours, not the full 24 hours that OE Litigation Staff assumed. Footprint states that OE Litigation Staff failed to take account of these lower consumption levels and instead double-counted the oil consumption during start-up by adding a quantity representing consumption for 16 hours of generation at the EcoMax level to the 745 barrels that would actually be consumed. Footprint claims that, using OE Litigation Staff’s own math, Unit 4 was unavailable to run at EcoMax for only 1.79 to 5.18 hours per day from June 26, 2013 through July 15, 2013. However, Footprint asserts, if notification, start-up and ramp time, as well as ISO-NE’s actual market schedule, is properly taken into account, Unit 4 would require 6.5 hours just to reach EcoMax. Therefore, Footprint argues that correcting for these purported OE Litigation Staff errors reduces the unit’s fuel requirements to a level that renders the available supply sufficient to meet the offers submitted in the ISO-NE market."

In its order terminating the proceeding, FERC stated that, "On September 19, 2018, OE Litigation Staff filed the OE Litigation Staff Reply, which states that Footprint’s Answer presented a new defense relating to the start-up requirements of Unit 4 that Footprint had not fully raised either in its response to preliminary findings or in its section 1b.19 response. OE Litigation Staff now agrees with Footprint that Footprint’s conduct from June 27 through July 17, 2013 does not violate the Tariff provisions and Commission regulations at issue here."

As a result, OE Litigation Staff recommended that the Commission vacate the Order to Show Cause and assess no penalty

In its order terminating the proceeding, FERC stated, "In light of the submissions made by Footprint and OE Litigation Staff, as well as OE Litigation Staff’s recommendation not to pursue the remaining alleged violations, we terminate the proceeding in this docket. In doing so, the Commission makes no findings of fact or conclusions of law concerning the merits of any issues in the proceeding, either procedural or substantive."

Docket No. IN18-7-000

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