FERC on Friday ordered IDACORP Inc. subsidiaries Idaho Power Co. and IDACORP Energy to return $6.14 million to customers after finding the utility provided preferential access on its transmission system to its power marketing affiliate between 2000 and 2002, and flagrantly violated the agency’s standards of conduct for regulated companies.

In a FERC-approved consent agreement between the Office of Marketing Oversight and Investigations’ Enforcement Division and the companies, Boise, ID-based Idaho Power and IDACORP Energy agreed to refund a total of $203,318 to customers who were denied transmission access due to the utility’s favorable treatment for its power marketer; IDACORP Energy agreed to return to Idaho Power ratepayers $5.8 million in revenues that were derived from 12 unauthorized sales agreements between the affiliates; and Idaho Power agreed to pay a total of $118,200 to counterparties of 1,182 contracts involving the off-system sale of power for resale, which were assigned to IDACORP Energy without FERC approval.

“While we ‘can order equitable remedies, such as disgorgement of unjust enrichment, the Commission does not have authority to order treble damages as under antitrust laws,” said the FERC order in approving the consent deal.

Some of the companies that will be paid the $203,318 for being denied transmission access include Aquila Merchant Services, Arizona Public Service Co., Avista, BPA Power, Mirant Americas Energy Marketing, PacifiCorp, Powerex Corp., PP&L Montana, Public Service Company of Colorado and Sierra Pacific Power Co.

Following a non-public investigation, FERC enforcement authorities found that Idaho Power, in extending preferential access, often accepted at face value IDACORP Energy’s claim that its requests for non-firm transmission were needed to serve Idaho Power’s native load, “when in fact they were not.” As a result, the power marketer affiliate was able to gain a “priority over competing power marketers that also requested non-firm transmission service from Idaho Power,” according to the order. This activity occurred from Jan. 1, 2000 through April 17, 2002.

IDACORP Energy, which marketed both power and natural gas, is in the process of winding down its operations. FERC said it saw no need to suspend IDACORP Energy’s market-based sales authority — which would be the normal punishment — since it is exiting the energy marketing business. “In the event that IDACORP Energy ever intends to take any action [to re-enter the business], it must first advise the Commission in writing,” the order said.

In addition to the refunds, Idaho Power has been ordered to appoint a compliance officer to ensure the utility in the future provides transmission access to its native-load customers first, and to hire an independent firm to audit its compliance with the agency’s standards of conduct and to file an audit report with FERC within six months.

FERC enforcement authorities said IDACORP Energy employees were given “unescorted access” after regular business hours to Idaho Power’s transmission control area and had computer access to transmission-specific information, and discussed “transmission information on a preferential basis” with Idaho Power employees. At the same time, Idaho Power failed to disclose the transfers of personnel between the two affiliates, FERC said.

“These activities violated Idaho Power’s standards of conduct and indicate unduly preferential access to non-public transmission information by employees with duties related to sales functions,” the agency order said. Idaho Power admitted it violated its code of conduct on file with the Commission.

“While civil penalties are not available under the Federal Power Act to address Idaho Power’s standard of conduct violations, the Commission nonetheless regards these violations as serious,” it noted. FERC can assess penalties against regulated gas companies for standards-of-conduct violations under the Natural Gas Act, however.

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