FERC Fines Maxim Power $5 Million For Market Manipulation; Commissioner Clark Dissents
On May 1, 2015, FERC issued an order assessing civil penalties against Maxim Power Corporation, Maxim Power (USA), Inc., Maxim Power (USA) Holding Company Inc., Pawtucket Power Holding Co., LLC, Pittsfield Generating Company, LP (collectively “Maxim”) and an Energy Marketing Analyst at Maxim, Kyle Mitton (“Mitton”), finding that Maxim and Mitton violated section 222(a) of the Federal Power Act and FERC’s Anti-Manipulation Rule, 18 C.F.R. § 1c.2. FERC assessed civil penalties of $5,000,000 against Maxim and $50,000 against Mitton.
In the order, FERC found that Maxim and Mitton had engaged in conduct that intentionally sought to defraud ISO New England Inc. (“ISO-NE”). Specifically, FERC concluded that Maxim, primarily through Mitton, engaged in a series of transactions with ISO-NE, and a series of misleading communications with the ISO-NE Independent Market Monitor (“IMM”), for the purpose of obtaining inflated “make-whole” payments at high fuel oil prices when a Maxim plant was dispatched for reliability, even though the plant in question was actually burning much less expensive natural gas.