FERC approves Berkshire Power settlement
Federal energy regulators have approved a stipulation and consent agreement under which two companies admit violations of the Federal Power Act and regulations prohibiting energy market manipulation.
The case involves Berkshire Power Company LLC (Berkshire), and Power Plant Management Services LLC. Berkshire owns an approximately 245 MW natural gas-fired, combined-cycle generating facility in Agawam, Massachusetts. Berkshire hired PPMS to provide project management and administrative services at the plant.
According to FERC documents, at the direction of a general manager hired by PPMS, “Berkshire Power engaged in a fraudulent scheme to perform unreported maintenance work and to conceal that work and associated maintenance outages from ISO-NE.” The documents allege that individuals at the plant scheduled maintenance work for times when the plant was unlikely to be dispatched, and then failed to notify ISO-NE about the work or the associated Plant unavailability. In at least six instances, this led to representations to ISO New England dispatchers that the plant was starting up or was able to start up when it was, in fact, unavailable due to ongoing maintenance or other technical problems.
The Commission’s Office of Enforcement initiated its investigation in June 2014, following a referral from the United States Attorney’s Office for the District of Massachusetts. Following fact-finding, Enforcement concluded that Berkshire and PPMS violated section 222 of the Federal Power Act and the Commission’s Anti-Manipulation Rule by concealing its maintenance work and associated outages from ISO-NE. That rule prohibits any entity from using a fraudulent device, scheme, or artifice, or engaging in any act, practice, or course of business that operates or would operate as a fraud; with the requisite scienter; in connection with a transaction subject to the jurisdiction of the Commission.
Enforcement also concluded that Berkshire violated Commission regulations by violating provisions of the ISO-NE tariff requiring it to schedule and disclose plant maintenance and to accurately report on plant availability, and by making false and misleading representations to ISO-NE. Finally, Enforcement concluded that Berkshire violated Commission-approved reliability standards by withholding information regarding its planned maintenance outages and plant capabilities and availability.
According to the order, the Office of Enforcement, Berkshire, and PPMS have resolved the matter by a stipulation and consent agreement. Under that deal, Berkshire and PPMS stipulate to the facts, admit the violations set out in the Agreement, and agree to pay a civil penalty of $2,000,000 to the United States Treasury. Berkshire agrees to pay to ISO-NE disgorgement of $1,012,563, plus interest. Berkshire further agrees to pay a civil penalty of $30,000 to the United States Treasury for its violations of the Reliability Standards.