Looks like FERC has its Grinch hat on this Christmas. On Wednesday, the Commission issued an Order to Show Cause and Notice of Proposed Penalty to Kevin Gates, his companies, and trader Alan Chen and his companies.
FERC proposes that Gates and his companies cough up $22,358,208.00, while Chen is supposed to come up with $12,160,576 in penalties and disgorgement. That's nearly $35M. I'm wondering if Gates and Chen even HAVE $35m?
I've read some of the OE FERC staff report, and I gotta say I'm not feeling the outrage in the same way everyone was outraged at the Enron schemes. It reads like a witch hunt, and I kinda feel sorry for Gates and Chen. So, FERC staff is all up on its high horse about protecting consumers, but I'm left wondering where that $4.7M in marginal loss surplus allocations would have ended up if Chen had not made these trades. It would have ended up in the pockets of other traders. It would not have ended up in the pockets of electric ratepayers.
What is FERC going to do with the money, if it manages to prevail in this matter? $4.7M will be re-distributed to other traders, Robin Hood style. That leaves $30M in penalties. What is FERC going to spend that on? Maybe they could spend it hiring some smarter guys to design and monitor their markets... like Gates and Chen?
FERC proposes that Gates and his companies cough up $22,358,208.00, while Chen is supposed to come up with $12,160,576 in penalties and disgorgement. That's nearly $35M. I'm wondering if Gates and Chen even HAVE $35m?
I've read some of the OE FERC staff report, and I gotta say I'm not feeling the outrage in the same way everyone was outraged at the Enron schemes. It reads like a witch hunt, and I kinda feel sorry for Gates and Chen. So, FERC staff is all up on its high horse about protecting consumers, but I'm left wondering where that $4.7M in marginal loss surplus allocations would have ended up if Chen had not made these trades. It would have ended up in the pockets of other traders. It would not have ended up in the pockets of electric ratepayers.
What is FERC going to do with the money, if it manages to prevail in this matter? $4.7M will be re-distributed to other traders, Robin Hood style. That leaves $30M in penalties. What is FERC going to spend that on? Maybe they could spend it hiring some smarter guys to design and monitor their markets... like Gates and Chen?
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