Exelon settles with U.S. FERC over power market activity

Reuters

Oct 21 (Reuters) - U.S. electric company Exelon Corp agreed to pay more than $600,000 to settle allegations that itsConstellation Energy Commodities Group submitted falseinformation to the operator of the California power grid.

In an order issued on Friday, the U.S. Federal EnergyRegulatory Commission said the activity occurred from Januarythrough March 2010, when Constellation was an independentcompany. Exelon took over Constellation in 2012.

Exelon will pay a $500,000 civil penalty and give up$145,928, plus interest, in "unjust" gains, the order said.

The Office of Enforcement at FERC said Constellation hadviolated federal regulations by submitting bids and engaging intransactions incorrectly designated as "wheeling through" inCalifornia.

Wheeling through means the company, in this caseConstellation, moves power through California from a sourceoutside the state to another point outside the state. FERC saidConstellation, however, lacked a point outside California todeliver the power to.

Companies participating in power markets need to identifytheir transactions properly, in part so grid operators can keepan accurate count of how much power is flowing into and throughthe grid.

The FERC Office of Enforcement said it had startedinvestigating Constellation's activities after a referral by themarket monitor at the California Independent System Operator,the state's power grid operator.

Exelon admitted to Constellation's violations and agreed topay the penalties, the order said.

In recent years, FERC has become more aggressive in pursuingmarket violations and has issued more than $1 billion in finessince the Energy Policy Act of 2005 significantly increased thepenalty the commission can impose to $1 million per day perviolation from $10,000.

In 2012, FERC imposed one of its biggest fines - $135million - on Constellation for violating power market rules inNew York and PJM, the old Pennsylvania-New Jersey-Maryland powergrid, in 2007-2008, and forced it to give up $110 million inunjust gains. The ruling came before the company's merger withExelon.

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