FERC Grants Green Mountain Energy Penalty Waiver for Inadvertent Capacity Withholding

FERC has granted Green Mountain Energy Company a waiver of certain New York ISO tariff and penalty provisions which Green Mountain Energy could have triggered due to its inadvertent withholding of capacity.

As first reported by Matters (11/2), Green Mountain inadvertently failed to offer about 20 MW of capacity in the ICAP market over a two-month period. The associated penalty originally assessed by NYISO was $387,000, though NYISO did not oppose the granting of a waiver and agreed that the error was not an attempt to manipulate the ICAP market.

As more fully detailed in our November 2 story, the error resulted from a series of events, including the triggering of a must-offer requirement on Green Mountain due its purchase by NRG Energy, the inadvertent attainment of a long capacity position (including through a change in product type and due to the lag in NYISO load true-ups), and personnel changes.

FERC agreed that the withholding was, "inadvertent and a good faith mistake."

"[N]umerous factors contributed to the company's inadvertent attainment of a long capacity position, and note the loss of key strategic personnel, the recent acquisition by NRG, and the complexity of new rules applying to Green Mountain," FERC said.

FERC noted that Green Mountain Energy has put into place additional checks on its physical position and has made changes to risk policies and procedures related to its NYISO capacity positions. "We find that Green Mountain and its affiliates have trained trading personnel on the need to maintain a physical short position, [and] on the necessity of compliance with NYISO's 'must-offer' obligation," FERC said.