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

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

In an order issued on Friday, the U.S. Federal Energy Regulatory Commission said the activity occurred from January through March 2010, when Constellation was an independent company. 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 had violated federal regulations by submitting bids and engaging in transactions incorrectly designated as "wheeling through" in California.

Wheeling through means the company, in this case Constellation, moves power through California from a source outside the state to another point outside the state. FERC said Constellation, however, lacked a point outside California to deliver the power to.

Companies participating in power markets need to identify their transactions properly, in part so grid operators can keep an accurate count of how much power is flowing into and through the grid.

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

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

In recent years, FERC has become more aggressive in pursuing market violations and has issued more than $1 billion in fines since the Energy Policy Act of 2005 significantly increased the penalty the commission can impose to $1 million per day per violation from $10,000.

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