Couple of interesting complaints at FERC recently.
First, one that doesn't take a whole lot of explaining. Electric ratepayer Eric Morris filed a complaint against The North American Electric Reliability Corporation (NERC) and SERC Reliability Corporation (SERC) for violating the NERC Rules of Procedure (ROP) Appendix 4B Sanction Guidelines in NERC Full Notice of Penalty regarding Entergy, FERC Docket No. NP15-31 filed July 30, 2015.
In essence, the issue here is that
First, one that doesn't take a whole lot of explaining. Electric ratepayer Eric Morris filed a complaint against The North American Electric Reliability Corporation (NERC) and SERC Reliability Corporation (SERC) for violating the NERC Rules of Procedure (ROP) Appendix 4B Sanction Guidelines in NERC Full Notice of Penalty regarding Entergy, FERC Docket No. NP15-31 filed July 30, 2015.
In essence, the issue here is that
NERC has filed a settlement for your [Commission] review and approval in NP15-31 regarding Entergy. The settlement
involves six separate violations for two reliability standard requirements. The total penalty is $55,000. These violations had durations of multiple years.
The appropriate penalty (sanction) should be:
This violation is classified as Medium/Moderate on the VRF/VSL Table, which would associate to a base penalty range of $4,000 to $100,000 pursuant to Appendix A of NERC ROP App 4B.
For each day the violation persisted. SERC determined the duration of the violation to be from June 18, 2007, the date the Standard became mandatory and enforceable, through June 30, 2015, when Entergy completed its Mitigation Plan. Mr. Morris calculates that should amount to:
By my math, that is eight years and twelve days, or 2,934 days. Therefore, the base range should be $11,736,0004 to $293,400,000.
But FERC and the parties are okay with just $55,000. After all, penalties cannot be recovered from ratepayers and must be borne by utility stockholders.
Mr. Morris filed his complaint because he is not and cannot be a party to the settlement, however he has calculated that this egregious wrong could personally cost him $0.0179, therefore he has standing to file the complaint.
What I want to know is why FERC is okay with a measly $55K penalty for Entergy violating reliability standards that affected millions of people, while they went for the maximum penalty against Powhatan Energy Fund? Are there different standards for different market participants? Is reliability much less of a concern to FERC than traders profiting by exploiting a loophole in its loose market regulations? FERC fined Powhatan something north of $30M for what it says was $4M in unjust profits that should have gone to certain big utilities. Where's the logic?
Or is it just that FERC serves the interests of utilities, not consumers? I guess we'll find out if we watch Docket EL15-93. I really hope FERC can pull itself out of the gutter to restore consumer confidence in the fairness of its regulatory actions. Call me a dreamer.
Mr. Morris filed his complaint because he is not and cannot be a party to the settlement, however he has calculated that this egregious wrong could personally cost him $0.0179, therefore he has standing to file the complaint.
What I want to know is why FERC is okay with a measly $55K penalty for Entergy violating reliability standards that affected millions of people, while they went for the maximum penalty against Powhatan Energy Fund? Are there different standards for different market participants? Is reliability much less of a concern to FERC than traders profiting by exploiting a loophole in its loose market regulations? FERC fined Powhatan something north of $30M for what it says was $4M in unjust profits that should have gone to certain big utilities. Where's the logic?
Or is it just that FERC serves the interests of utilities, not consumers? I guess we'll find out if we watch Docket EL15-93. I really hope FERC can pull itself out of the gutter to restore consumer confidence in the fairness of its regulatory actions. Call me a dreamer.
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