NEW YORK'S UTILITY PROJECT : AARP Files Comments with FERC on State Recommendations for Use of $104 Million Disgorged by Alleged NYISO Market Manipulator

On September 26, 2012, AARP filed Comments with the Federal Energy Regulatory Commission (FERC) regarding proposals made by state agencies for using a $104 Million fund from profits disgorged by an alleged manipulator of the New York Independent System Operator's (NYISO's) wholesale electricity spot markets. Because it was impossible to ascertain with precision the harm caused several years ago by the alleged manipulation of spot market and financial derivatives markets by Constellation Energy Commodities Group, FERC invited state utility regulation commissions, state attorneys general, and state utility consumer advocates to suggest possible ways for FERC to apportion the disgorged funds "for the benefit of electric energy consumers."

The AARP Comments urged FERC to apply the following criteria in reviewing proposals:

The disgorged funds should benefit electric energy consumers, not utilities or other market participants.
The proposed use of disgorgement funds should not supplant funding that otherwise would be available to fund a project or activity.
The proposal should enhance protection of consumers and therefore help reduce the possibility of future abuse, malfunction, or manipulation of wholesale electricity markets.
The proposed allocation should alleviate hardship for consumers likely to have suffered most from higher bills for electric service caused by the manipulation, i.e., low income customers.
The proposed use should have lasting or long term beneficial impact for electric energy consumers

AARP's September 26, 2012 comments urged FERC to approve, modify, or reject a variety of specific proposals from 19 states and the District of Columbia, which are within the geographic areas served by the NYISO, PJM, and New England ISO regional transmission utilities.

Updates

Replies to AARP Comments: On September 28, 2012, FERC Deputy Chief Administrative Law Judge issued an Order granting 15 days for state agencies proposing allocations to reply to comments, including those of AARP.

Delaware: On September 28, 2012, Delaware state agencies (the Delaware Public Service Commission and the Delaware Division of the Public Advocate) filed a joint proposal to support the PJM area consumer advocates' CAPS proposal, See MOTION OF INDICATED JOINT PJM STATE CONSUMER ADVOCATE AGENCIES TO PROPOSE APPORTIONMENT OF MONIES IN PJM FUND AND PROPOSAL, FERC Case No. IN12-7, filed July 10, 2012. The Delaware agencies further proposed to use any additional funds for Delaware for energy assistance to low-income electricity customers through the Delaware Energy Assistance Program. AARP had recommended this in its comments.

Background

WEDNESDAY, SEPTEMBER 19, 2012
FERC ALJ Sets Date for Comments and Oral Argument Regarding Use of $104 Million Fund Disgorged by Alleged NYISO Market Gamers

MONDAY, SEPTEMBER 10, 2012

States File Recommendations with FERC for Use of Funds Disgorged by Alleged Wholesale Electric Market Manipulator