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Maxim Power faces FERC manipulation investigation

  • Märkte: Electricity, Natural gas
  • 05.11.14

The Federal Energy Regulatory Commission's (FERC) enforcement office has accused merchant generator Maxim Power of using three "schemes" to collect millions of dollars in inflated payments from New England's power markets.

FERC enforcement staff in a notice of violation released 3 November said the company gamed market rules and made "false and misleading statements" to New England's electric grid operator so it could collect inflated make-whole and capacity payments. The notice said these schemes violated FERC's anti-manipulation rule.

Maxim, based in Calgary, Alberta, owns three power plants in New England with 306MW of capacity. The company first disclosed the investigation late last year, when Patriot Power Holdings terminated a deal to buy Maxim's US power business because of the investigation.

In the first alleged scheme, the notice said Maxim in 2012-13 received millions of dollars in inflated make-whole payments by gaming a market power mitigation rule for power plants needed for grid reliability. The notice does not describe which generating units were involved.

Maxim in the second alleged scheme told New England's grid operator in July-August 2010 that its electricity sales price was based on high oil prices because of gas supply problems, allowing it to collect make-whole payments. FERC enforcement staff said Maxim in those two months ended up burning cheaper gas that in many cases it bought before submitting its offers.

In the final alleged scheme, the notice said, Maxim collect inflated capacity payments from 2010 to 2013 by taking "extraordinary measures" during capacity testing that raised the reported output of its three New England plants.

The notice alleges that Maxim president John Bobenic and another employee, Kyle Mitton, were involved in some of these schemes.

The investigation will not become a formal proceeding until FERC's commissioners vote to advance the investigation. If that were to occur, Maxim said this week it would "vigorously defend itself" and that it was "confident it can demonstrate that the conduct set forth in the notice did not violate FERC's anti-manipulative rule or any other rule."

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