Polidoro Banned from PJM Demand Response Market for Two Years Under Settlement with FERC

FERC approved a settlement under which Joseph Polidoro, former Senior Vice President of North America Power Partners (2006-08), is to pay a civil penalty of $50,000 and be subject to a two-year ban from participation in PJM's Demand Response markets, to resolve various Enforcement Staff allegations.

Staff alleged that, from 2007 to July 2008, Polidoro, on behalf of NAPP, registered resources for PJM's Synchronized Reserve Market and (either directly or through employees under his supervision) submitted offers for NAPP's resources into the Synchronized Reserve Market at times when the resources had reported to NAPP they were unavailable to respond to a Synchronized Reserve Event. Additionally, Staff alleged that Polidoro offered a resource into the Synchronized Reserve Market after he knew the resource had ended its contractual relationship with NAPP, and therefore was not prepared to respond to a Synchronized Reserve Event.

Between March 2007 and March 2008, PJM called nine separate Synchronized Reserve Events lasting more than ten minutes, in which NAPP's resources were offered and had cleared in the market. Staff alleged that Polidoro personally received messages from PJM regarding the Synchronized Reserve Events, but failed to notify NAPP's resources of any of the nine events. Therefore, all of NAPP's resources failed to respond. After each event, Staff alleged that Polidoro, on behalf of NAPP, failed to submit meter data for each resource to PJM demonstrating the resource's reduction in demand and therefore compliance with the event.

Staff also alleged that for the 2008/2009 Interruptible Load for Reliability planning season, NAPP, through the actions of Polidoro as the Senior Vice President of NAPP and operational employees under his supervision, incorrectly registered numerous resources for the 2008/2009 ILR planning season. Staff alleged that NAPP employees under the supervision of Polidoro registered 101 resources before obtaining their authorization or verification of their willingness and ability to participate in that year's program prior to the ILR registration deadline.

Under the adopted settlement, for a period of two years, Polidoro nor any person or entity acting on his behalf, nor any entity, partnership, company, or affiliate in which he has a financial interest, shall participate in any PJM demand response activities. Nor will Polidoro manage, operate, or provide consulting services related to any PJM demand response activities to any entity, partnership, company or its affiliates, agents, representatives, attorneys, officers, directors and employees.

In reaching settlement, Staff considered the following factors: "Mr. Polidoro's violations were serious and were committed without regard for compliance with the Commission's regulations; Mr. Polidoro did not promptly enact remedial measures after being notified by PJM and Enforcement staff of numerous compliance issues identified in the investigation; Mr. Polidoro's actions and failure to act had the potential to cause harm, even though NAPP's violations in this particular matter did not affect market prices or cause actual harm to system reliability; and Mr. Polidoro's less than satisfactory cooperation at the beginning of the investigation."

Enforcement also considered, "Mr. Polidoro's limited financial resources coupled with his agreement to not participate in any PJM Demand Response activities for two years."

"Absent consideration of Mr. Polidoro's financial circumstances, Enforcement would have sought a significantly higher penalty for similar conduct by an individual," Staff said.

Polidoro neither admits nor denies the violations.

FERC previously reached a settlement with North America Power Partners regarding the alleged violations.