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Pepco Energy Calls Columbia Capacity Auction 'Fatally Flawed'

Pepco Energy Services Inc. has called on FERC to conduct an investigation into the "serious problems" that allegedly occurred during a November capacity auction by Columbia Gas Transmission, which it said ultimately led to the rejection of valid bids made by Pepco and capacity being awarded to another shipper.

In a Section 5 complaint filed Tuesday, Pepco Energy called the Nov. 8 auction on Columbia's electronic bulletin board (EBB), Navigator, "fatally flawed," claiming that it failed to accept Pepco Energy's valid bids in the closing minutes of the auction, and on some bids failed to recognize Pepco Energy representatives as the bidders and mistakenly transformed the company's "unique" login information and password into data associated with a different bidder [RP07-107].

"The Navigator errors impermissibly tilted the playing field and impermissibly deprived [Pepco Energy] of its fair chance to submit valid bids that, as it turns out, would have been winning bids for a significant portion of the capacity in the auction," it noted. As a result, Pepco Energy said it lost out on capacity on Columbia that is "integral" to the provision of service to its retail customers in the Washington, DC, metropolitan area.

The Arlington, VA-based energy supplier, a subsidiary of Pepco Holdings Inc., urged the Federal Energy Regulatory Commission to order the pipeline to award capacity to Pepco Energy on which it would have had a winning bid if it had not been for the alleged EBB errors; order Columbia to reinstate Pepco Energy on its list of approved bidders; or in the alternative, declare the auction void and order Columbia to conduct a new auction.

Pepco Energy asked the Commission to act on the complaint under its fast-track procedures "to protect [Pepco] from continuing harm and to ensure that this matter is resolved as expeditiously as possible."

It has tried to resolve the matter with Columbia in a "reasonable matter, but without success," the company said. "In response, not only has Columbia denied what would have been a winning bid for the Leach-to-Loudoun [Virginia] capacity, Columbia has notified [Pepco Energy] that it was removing [it] from its approved bidders' list for a period of six months," Pepco Energy told FERC.

Pepco Energy "is suffering harm every day that it is not able to use the Leach-to-Loudoun capacity. Columbia's ban on [Pepco's] ability to accept capacity releases also creates additional burdens on [Pepco] in its efforts to serve its customers" on the Washington Gas Light distribution system, it said.

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