North America Power Partners to Pay $500,000, Disgorge Profits, for Allegedly Enrolling ILR Customers Without Authorization, Offering Unavailable Resources

FERC has accepted a settlement which compels North America Power Partners to pay a civil penalty of $500,000 and disgorge $2.2 million, plus interest, in unjust profits, relating to FERC Enforcement Staff's allegations that North America Power Partners engaged in a fraudulent scheme or artifice committed with scienter related to several demand response activities (IN09-6).

Enforcement Staff alleged that North America Power Partners registered 101 resources for the PJM Interruptible Load for Reliability (ILR) program before obtaining their authorization or verification of their willingness and ability to participate in that year's program prior to the registration deadline. Enforcement Staff alleged that that the registration of 101 resources in the 2008/2009 ILR program without authorizations violated sections A(2), (3) and (7) of Attachment DD-1 of PJM's OATT. Enforcement Staff also alleged that such conduct constituted a fraudulent scheme or artifice committed with scienter in connection with a jurisdictional transaction in violation of 18 C.F.R. § 1c.2 (2010).

From 2007 to July 2008, North America Power Partners offered several resources into the PJM Synchronized Reserve Market at times when the resources had reported to North America Power Partners they were unavailable to respond to a Synchronized Reserve Event, Enforcement Staff alleged.

In addition, between March 2007 and March 2008, PJM called nine separate Synchronized Reserve Events lasting more than 10 minutes, in which North America Power Partners' resources were offered and had cleared in the market. However, Enforcement Staff alleged that North America Power Partners failed to notify its resources of any of the nine events. Therefore, all of North America Power Partners' resources failed to respond. After each event, North America Power Partners failed to submit meter data for each resource to PJM demonstrating the resource's reduction in demand and therefore compliance with the event, Staff alleged.

Enforcement Staff alleged that North America Power Partners violated section 1.7.4(d) of Attachment K of PJM's OATT by repeatedly submitting offers on behalf of resources at times when North America Power Partners knew such resources were unavailable to respond to Synchronized Reserve Events. Enforcement Staff also alleged that by failing to facilitate its resources' response to Synchronized Reserve Events, North America Power Partners violated sections 1.7.4(a) and section 1.8.2 of Attachment K of PJM's OATT. Enforcement Staff further alleged that North America Power Partners violated section 1.7.4(d) of Attachment K of PJM's OATT by failing to submit meter data.

In addition, Enforcement Staff alleged that North America Power Partners' conduct in connection with the Synchronized Reserve Market constituted a fraudulent scheme or artifice committed with scienter in connection with a jurisdictional transaction in violation of 18 C.F.R. § 1c.2 (2010).

North America Power Partners neither admits nor denies the alleged violations.