N.H. eligible for piece of Constellation-FERC $250m settlement

A trading group of Constellation Energy, an independent power provider for business users in New Hampshire and other states, has agreed to pay nearly $250 million to settle charges of price manipulation. A fraction of that money could be claimed on behalf of the state’s ratepayers.The settlement, approved by the Federal Energy Regulatory Commission on March 9, is the largest of its kind in the agency’s history.Constellation – which did not admit any wrongdoing – agreed to pay $135 million to the federal government and $110 million to “disgorge unjust profits.”Some $20 million of that disgorgement would be set aside for the benefit of energy consumers in the states participating in ISO New England, the grid that serves all of New England, including New Hampshire.Agencies in the affected states – in New Hampshire they include Public Utilities Commission, the Office of Consumer Advocate and the Attorney’s General Office – can apply for those funds through FERC.How the $20 million will be divided among the states was not clear in the settlement. The settlement also did not spell out whether the funds would be used for rebates or some other program to benefit consumers.The FERC enforcement staff alleged that the group engaged in a pattern of “virtual” trading between September 2007 and December 2008, not to earn the largest profit but to widen the difference in price between day-ahead and real-time markets, benefiting those who speculated on that difference.The staff charged that the manipulation of both the “physical and virtual markets” resulted in “widespread economic losses to market participants who bought and sold energy in ISO New England” and other independent power organizations. The manipulation distorted price discovery for all market participants, which contributes not only to trading decisions, but to a variety of industry-wide determinations, FERC said.Constellation neither admitted nor denied the allegations. Calls to Constellation’s point man in New Hampshire were not returned, but in its releases the company said, “While Constellation disagrees with the FERC staff’s claims, we believe it is in the interest of all parties to settle this case and avoid expensive, protracted litigation. While the company admitted no wrongdoing, Constellation has implemented a number of measures to enhance its trading policies and practices since 2008, and the settlement acknowledges these enhancements.”The New Hampshire PUC will be “looking to see what, if any funds, we are able to get” as a result of the settlement, said Steve Mullen, of the agency’s Electric Division, but it’s is too early to tell whether the agency will apply for them. — BOB SANDERS/NEW HAMPSHIRE BUSINESS REVIEW

Categories: News