PacifiCorp to Pay $265,000 to Resolve FERC Investigation

FERC approved a settlement between its Office of Enforcement and PacifiCorp to resolve Enforcement's non-public investigation of conduct by PacifiCorp Transmission Services (PTS) and PacifiCorp's marketing function, Commercial and Trading (C&T), that, "potentially violated PacifiCorp's open access transmission tariff (OATT) and Part 37 of the Commission's regulations."

PacifiCorp has agreed to pay a civil penalty of $265,000, implement remedial measures, and consent to compliance monitoring. PacifiCorp neither admits nor denies violations of the Commission's regulations, 18 C.F.R. § 37.6(e)(1) (2012), or of Sections 17.1 and 18.1 of its tariff.

To obtain a transmission reservation on PacifiCorp's transmission system, the potential customer must reserve the capacity through PTS's OASIS. The OASIS system generates an OASIS reservation number known as an assignment reservation number or "AREF." The customer then includes the AREF in its e-Tag, which it then submits to the WECC Western Interchange Tool (a/k/a WIT) for validation and approval.

Each e-Tag identifies the various transmission paths (a/k/a legs) that will constitute the transaction. Each leg of the e-Tag representing physical transmission must include an AREF. Legs representing non-physical aspects of the transaction may include other designations in lieu of AREFs, such as the "No OASIS Required" (NOR) designation.

During the period July 1, 2009 through February 11, 2011, PTS accepted from affiliated and unaffiliated customers e-Tags containing over 78,000 NOR designations. Most of these were submitted by PacifiCorp's marketing function, C&T.

PTS did not have a mechanism in place to timely review these more than 78,000 e-Tags containing NOR-designated line segments. Since the system default was to accept line segments containing NOR designations and since manual review was difficult, e-Tags containing NOR designations were accepted and processed despite the fact that PTS had no way of knowing whether the designations were appropriate. PacifiCorp was aware of the problem as early as late 2008, but did not implement effective review measures until 2011, according to a list of stipulated facts.

An examination of the e-Tag line segments containing NOR designations revealed that a small percentage represented transaction legs involving physical transmission and which therefore should have included an AREF number rather than an NOR designation. C&T, which is PacifiCorp's largest transmission customer, submitted more of these NOR designations than any other single entity.

While in most cases customers had validly obtained an AREF number for that leg of the transaction and simply failed to enter it properly into the e-Tag, in 22 instances in which PTS accepted an NOR designation in lieu of an AREF number for a transaction leg representing physical transmission, the customer did not obtain a valid AREF number through OASIS. C&T was responsible for 6 of these instances.

The Commission's regulations, 18 C.F.R. § 37.6(e)(1) (2012), require that all requests for transmission and ancillary services offered under an OATT, "must be made on the OASIS and posted prior to the Transmission provider responding to the request." With respect to the 22 physical transmission legs for which PTS provided transmission access to customers who had not purchased it, Enforcement alleged that PTS violated this regulation by accepting requests for transmission service that had not been made through, or posted on, OASIS.

Schedule 11 of PacifiCorp's OATT requires PTS to charge customers and apply operational penalties for unauthorized, i.e., unreserved, use of its transmission system. By accepting the e-Tags containing these 22 physical transmission legs for which no reservation was made by transmission customers via OASIS, Enforcement alleged that PTS provided, and its customers obtained, unauthorized access to PacifiCorp's transmission system (also known as unreserved use).

Docket No. IN13-2-000