Retail Supplier Raises "Due Process" Concerns Regarding Default Process at ISO

A retail electric supplier has raised "due process and fairness concerns" regarding ISO New England's triggering of a default of the supplier.

Specifically, People's Power & Gas, in an interrogatory response to the Connecticut PURA concerning its most recent default at ISO-NE in January, said:

"At 3:29p.m. on January 27, 2014, the ISO-NE issued to People's a Notice of Material Adverse Changes ('Notice') under ISO-NE rules. The ISO-NE cited the fact that a financing company doing business with People's advised ISO-NE it had obtained an ex parte temporary court order from a Maryland court purporting to place a hold on certain funds deposited by People's with the ISO-NE's collateral agent. The ISO-NE established an expedited deadline of January 29, 2014 -- approximately 48 hours after issuance of the Notice -- for People's to lift the court order. People's was unable to meet this impossibly short deadline for resolving resolution of a lawsuit that had, at that point, not even been served on People's officials. People's was able to obtain a court order dismissing both the action and the temporary order less than one day after the ISO-NE deadline, on Thursday, January 30, 2014."

PP&G continued:

"People's has serious concerns with the lack of factual and legal merit underlying the financing company legal action, and secured a prompt dismissal. Moreover, People's has very serious due process and fairness concerns with ISO-NE's decisions to (1) issue the Notice without any attempt to contact People's to confirm the validity or lack thereof of the claims asserted by the financing company on which the Notice is based and (2) set a Wednesday deadline for removing the alleged impediment when the Notice was not issued until just before Monday close of business. In fact, People's believes that the facts upon which the Notice was based were not correct, including that court order hold did not affect any funds on account with the ISO-NE's agent used to secure People's obligations with the ISO-NE; the hold only affected additional funds owned by People's and/or its principal. People's is working on addressing the default."