Power & Pipes

FERC, CFTC, and State Energy Law Developments

On November 29, 2011, the Federal Energy Regulatory Commission approved a Stipulation and Consent Agreement between the Office of Enforcement (Enforcement) and Holyoke Gas and Electric Department (Holyoke) in which Holyoke stipulated that it failed to report to ISO New England, Inc. (ISO-NE) three planned outages of two of its generating units serving as ISO-NE capacity resources, as required under the ISO-NE tariff. Holyoke is a municipally owned utility located in Holyoke, Massachusetts, that owns and operates two dual-fuel peaking units, Cabot Unit 6 and Cabot Unit 8, both of which it registered as Installed Capacity Resources (ICAP) in ISO-NE’s capacity market. Under its tariff, ISO-NE pays Holyoke a monthly ICAP payment for each Cabot Unit. In return, Holyoke is required to offer the Cabot Units’ energy into ISO-NE energy markets and must notify ISO-NE of any outages of the Cabot Units. Holyoke must also schedule in advance any planned outages required for nonemergency maintenance, inspection, or repair. Additionally, each month Holyoke must submit General Availability Data (GADS Data) for the Cabot Units for the previous month.

On December 28, 2008, ISO-NE sought to dispatch Cabot Unit 8 for next-day service and learned that it had been out of service for three months, triggering an ISO-NE investigation. ISO-NE determined that Holyoke failed to comply with the outage scheduling and notice requirements of the tariff. Subsequently, Enforcement concluded that Holyoke misrepresented the availability of Cabot Unit 8 in violation of 18 C.F.R. § 1c.2. Holyoke then voluntarily disclosed to Enforcement two other planned outages ISO-NE was unaware of, one occurring on Cabot Unit 6 and the other on Cabot Unit 8.

During each outage, despite the fact that the affected Cabot Unit could not have provided energy if dispatched By ISO-NE, Holyoke offered its energy into the ISO-NE day-ahead and real-time energy markets and submitted GADS Data indicating that the unit was available for dispatch during the reported period. When ISO-NE did request dispatch, Holyoke placed the Cabot Unit on forced outage status—a status reserved for outages due to emergency, unanticipated failures, or other causes beyond the generation owner’s control—without informing ISO-NE that the Cabot Unit had already been out of service. Holyoke then stopped making energy offers for the remainder of the planned outage.

In the Stipulation and Consent Agreement, Holyoke stipulated that it offered the Cabot Units’ energy for dispatch during the three outages and reported them as available for GADS Data purposes despite knowing that the Cabot Units could not have provided energy if dispatched By ISO-NE. However, it did not admit or deny that its failure to report and schedule the outages while reporting the Cabot Units as available for dispatch violated 18 C.F.R. § 1c.2. Pursuant to the Stipulation and Consent Agreement, Holyoke agreed to make certain compliance monitoring reports to Enforcement and disgorge the $336,267.86, plus interest, of capacity payments it received from ISO-NE during the outages.

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