FERC last Wednesday issued an order directing Exelon Corp. and affiliates PECO Energy Co., Exelon Generation Co. LLC and Power Team to show cause whether they violated a key section of the Federal Power Act (FPA) and standards of conduct in FERC regulations by operating PECO’s transmission system in an unduly preferential manner or sharing non-public information related to the timing and location of maintenance outages.

The order seeks to determine whether PECO operated its transmission system in a manner that benefited its affiliate, Power Team, and provided Power Team with an information advantage that was not available to any other user on its transmission system.

The Commission said that a non-public investigation has produced evidence that PECO may have operated its transmission system to provide Power Team with additional congestion revenues, or provided Power Team with advance knowledge of where congestion might occur on PJM’s transmission systems, or both.

FERC said that if the allegations are correct, the conduct would be a violation of the FPA and the Commission’s standards of conduct. The standards of conduct are intended to prevent transmission owners from providing wholesale merchant employees or wholesale merchant employees of affiliates with transmission-related information not available to all customers at the same time through public posting on the Open Access Same-Time Information System (OASIS).

The Commission said that it appears that PECO may have provided Power Team with preferential treatment either in access to transmission information or in the way the transmission facilities were operated.

PECO may have violated section 205(b) of the FPA by derating certain transmission facilities to the benefit of Power Team, and by providing maintenance outage information to benefit Power Team’s fixed transmission rights (FTRs) positions. Because PECO may have operated its transmission system in a manner preferential to Power Team, it may have violated the FPA prohibition against granting an undue preference or advantage to any person.

Also, by derating certain transmission facilities and benefiting Power Team’s FTR positions, PECO may have violated Commission regulations that require, respectively, that PECO function independently of the employees of its affiliated companies, and that PECO apply its tariff in a fair and impartial manner.

With regard to providing Power Team with an informational advantage by providing access to maintenance outage information other than that posted on OASIS, PECO may have violated a Commission regulation that prohibits PECO from providing access to any transmission-related information to any customer that it has not posted on its OASIS.

FERC said that if it finds violations, it may order remedies that include disgorgement of net revenues from the FTR transactions and restrictions on Power Team’s market-based rate authority. Also, the Commission may require that PECO be precluded from derating or removing any transmission-related equipment from service without first receiving approval from PJM.

PECO would be required to immediately report to Commission staff any deratings or removal of transmission-related equipment from service for a specified period. FERC said that based on the responses to this order and any other information that comes to its attention, the federal agency may issue further orders, as appropriate.

FERC, in a companion order, directed PJM to report to the Commission on its current transmission oversight processes and procedures related to maintenance and derating decisions. FERC said it is concerned about the degree of oversight of transmission operations, particularly outages and deratings, that is exercised by PJM.

The Commission said it is interested in reviewing PJM’s procedures and, if necessary, exploring ways to strengthen PJM’s oversight in the future.

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