FERC commissioners last Thursday agreed to order Carolina Power & Light (CP&L) to credit revenue from energy imbalance penalties to “non-offending transmission customers,” emphasizing that this is a policy switch which will be imposed in any cases going forward. The move puts power transmission penalties on the same footing as gas transportation penalties.

The commissioners did not actually vote on this and several other items discussed at the regular meeting, holding them for notational voting at a later date at the request of Commissioner William Massey, who was unable to attend the meeting due to illness. All three commissioners present, however, said they supported the policy which was part of a rehearing order on imbalance penalties for CP&L (ER01-1807). The Commission originally rejected a shipper’s petition to have penalty revenue credited to customers when it first issued the order, saying it was expected that RTOs, soon to be in place, would address the issue through the creation of energy imbalance markets.

FERC has decided, however, to reverse that decision to “encourage the promotion of market-based imbalance solutions.” The crediting of imbalance penalty revenues to non-offending customers already is the policy for natural gas pipelines. The revenue crediting “should provide appropriate economic incentives for transmission customers to minimize their energy imbalances, while at the same time removing any incentive for CP&L to hinder the development of other imbalance services that do not rely on penalties.”

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