Duke Energy Trading and Marketing has agreed to pay $550,000 to settle charges of energy market manipulation, including participating in a variety of trading and power transportation schemes during the California’s 2000-2001 electricity crisis. The agreement was approved last Monday by an administration law judge with the Federal Energy Regulatory Commission.

Although it denies the allegations, Duke agreed to pay $458,737 to settle allegations that it “double sold” 6,575 MWh during March, May, June, and July 2000. It also agreed to pay $41,701 for allegedly engaging in “cutting non-firm” practices on five days, spanning a total of 19 hours.

Duke agreed to pay $49,535 to settle charges of seven occurrences or 44 hours of potential “circular scheduling” transactions. The agreement also stated that Duke may have to pay an additional $1.5 million if FERC finds it guilty of other deceptive trading practices, ALJ Carmen A. Cintron said.

“The [Duke] settlement provides a reasonable resolution of the issues set for hearing in this proceeding,” Cintron wrote. “There was insufficient evidence to proceed with any further claims against Duke.”

According to the proposed settlement, Duke would neither admit nor deny charges it violated any rules or tariffs. FERC in June 2003 identified Duke as one of 43 entities that may have used questionable trading strategies during California’s crisis, which brought rolling blackouts and the bankruptcy of a state utility. Most of the other firms have reached similar deals with FERC to settle charges. The biggest proposed settlement is with Sempra Energy for about $7.2 million.

The Duke settlement still must be approved by FERC commissioners before it is finalized.

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