FERC Issues Order To Show Cause To Maxim
Enforcement Staff alleges that Respondents violated FERC’s prohibition on electricity market manipulation under Section 222 of the Federal Power Act and 18 C.F.R. Section 1c.2, as well as FERC’s regulations prohibiting the submission, or omission, of false or misleading information, 18 C.F.R. Section 35.41(b).4 Principally through Mr. Mitton, Staff asserts that “Maxim engaged in a series of transactions with ISO-New England (ISO-NE) and misleading communications with the ISO-NE Internal Market Monitor (IMM) for the purpose of obtaining inflated make-whole payments at high fuel oil prices when a Maxim plant [Pittsfield] was dispatched for reliability, even though the plant was actually burning much less expensive natural gas.”5 Respondents allegedly did so in order to reap the benefit of out-of-market “make-whole payments,” also referred to as Net Commitment Period Compensation payments, made by ISO-NE when it calls upon generation to meet reliability needs. Under this alleged scheme, Maxim collected $2.99 million in excessive payments, all of which ISO-NE recouped after learning that Maxim charged for oil, but burned cheaper gas.