Tuesday, March 19, 2019

FERC Drops Salem Harbor ‘False Offer’ Case

By Rich Heidorn Jr.

FERC has ended its enforcement action against the operators of the Salem Harbor Power Station, dropping allegations that plant operators made ISO-NE supply offers they could not meet because of insufficient fuel.

The commission’s Feb. 25 order approved the Office of Enforcement’s recommendation last summer that FERC withdraw its Order to Show Cause against plant owner Footprint Power (IN18-7). (See FERC Walks Back Salem Harbor Manipulation Case.)

Salem Harbor Power Plant | Tetra Tech

OE had sought to force Footprint Power to disgorge more than $2 million in capacity payments Salem Harbor Unit 4 received for a period in June and July 2013 during which the commission said the plant’s fuel supply prevented it from operating at its offered capacity. OE also had sought $4.2 million in civil penalties.

Enforcement staff recommended dropping the matter based on Footprint’s arguments that FERC had failed to consider the 17.5 hours it took Salem Unit 4 to reach full output from a cold start.

The company made its argument in its response to the Order to Show Cause, saying: “The commission should terminate this misguided investigation, just as it terminated the 200-plus other referrals the ISO-NE Internal Market Monitor made during this same time frame.”

OE staff told the commission they still believed that Footprint violated ISO-NE Tariff provisions and regulations in its day-ahead limited energy generator (LEG) offers from July 18 to July 25, 2013. But they recommended the commission vacate the Order to Show Cause and not assess a penalty because the reduced scope of the violations lessened the impact on the market.

In Footprint’s Sept. 26 reply to OE’s concession, the company denied OE’s allegations regarding the July offers.

“In light of the submissions made by Footprint and OE litigation staff, as well as OE litigation staff’s recommendation not to pursue the remaining alleged violations, we terminate the proceeding in this docket,” the commission said in ending the case. “In doing so, the commission makes no findings of fact or conclusions of law concerning the merits of any issues in the proceeding, either procedural or substantive.”

Footprint’s lead attorney, John N. Estes III of Skadden, Arps, Slate, Meagher & Flom, declined to comment Tuesday.

“Our policy is not to comment on FERC investigations,” ISO-NE spokeswoman Marcia Blomberg said.

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