On June 24th and 27th, 2022 FERC approved two stipulations and consent agreements between FERC’s Office of Enforcement (“Enforcement”) and two separate project developers. First, sPower Development Company, LLC (“sPower Devco”) agreed to a civil penalty of $24,000 after Enforcement determined that sPower Devco violated PJM Interconnection, L.L.C.’s (“PJM’s”) Tariff by submitting inaccurate information in PJM’s interconnection process. Second, Salem Harbor Power Development LP (“Harbor Power Devco”) agreed to a civil penalty of $17 million, to disgorge $26.7 million in profits, and to submit to compliance monitoring after Enforcement found that it collected capacity revenues on a project that had not yet been built nor was in commercial operation.
In its June 24 order, FERC approved a stipulation and consent agreement stemming from Enforcement’s investigation into whether sPower Devco violated the PJM Tariff by submitting two interconnection study agreements that inaccurately stated that sPower Devco had site control over the property for the proposed interconnection of its Hokiebird Solar Project. sPower Devco stipulated that it submitted a System Impact Study Agreement in June 2017, and Facilities Study Agreement in January 18, identifying an irrevocable option to purchase (“POA”) a 1700-acre parcel in Prince Edward County, Virginia in both agreements. However, sPower Devco’s affiliate terminated the POA in January 2017. The affiliate failed to follow certain internal procedures, which resulted in sPower Devco personnel being unaware the POA had been terminated. PJM sent sPower Devco a letter on February 8, 2019 after learning of the site control issue through sources other than sPower Devco. PJM’s letter asked sPower Devco to confirm the accuracy of its prior representations regarding site control. Upon receipt, sPower Devco acknowledged the POA had been terminated and surrendered its queue position.
After an investigation, Enforcement determined that sPower Devco violated the PJM Tariff by submitting inaccurate information and by failing to notify PJM that the POA had been terminated. FERC’s June 24 order stated that sPower Devco should have had processes in place to prevent it from submitting incorrect information to PJM. sPower Devco agreed to pay a civil penalty of $24,000 and to submit two annual compliance monitoring reports, with a third annual report at Enforcement’s option.
In its June 27 order, FERC approved a stipulation and consent agreement stemming from Enforcement’s investigation into Harbor Power Devco’s receipt of capacity payments from ISO-New England Inc. (“ISO-NE”) for its New Salem Harbor Generating Station project (Project) during the 2017-18 Capacity Commitment Period, during which the Project had neither been built nor commenced commercial operation. Harbor Power Devco stipulated that in 2016, it learned that engineering, procurement, and subcontractor management issues had delayed construction of the Project. With knowledge of the delays, Harbor Power Devco communicated to ISO-NE that the project was on schedule and did not include or mention any details regarding the status of the Project or the delays.
After an investigation, Enforcement determined that from September 2016 through February 2017, Harbor Power Devco failed to provide relevant information to ISO-NE including “complete updated version[s] of [its] critical path schedule” as required by the ISO-NE Tariff. Enforcement also determined that Harbor Power Devco violated FERC’s Duty of Candor Rule because while the contractor provided updated schedules to Harbor Power Devco on four occasions, Harbor Power Devco did not provide complete updated schedules to ISO-NE in any format. Harbor Power Devco agreed to pay a civil penalty of $17,100,000, disgorge $26,693,237.67 in profits, and submit to compliance monitoring.