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California and the West

FERC flexes new muscle, fines 5 firms

January 19, 2007|From Bloomberg News

The Federal Energy Regulatory Commission used its enforcement authority for the first time Thursday, levying $22.5 million in civil penalties on five power companies.

PacifiCorp, Scana Corp., Entergy Corp., NorthWestern Energy Corp. and NRG Energy Inc. agreed to pay fines of $500,000 to $10 million for violating commission rules.

"We've been very deliberate in the way we've approached this first use" of the penalty authority, Chairman Joseph Kelliher said. "None of these settlements impose maximum penalties."

The commission was granted the power to fine companies as much as $1 million a day per violation through energy legislation signed into law in August 2005. Congress granted the authority after the agency found violations by companies in Western power markets during 2000 and 2001.

Four of the five companies reported their violations to the commission, Kelliher said.

The agreements between commission staff and the companies paying the fines were approved Thursday in a unanimous vote at the panel's open meeting in Washington.

"We are now an enforcement agency capable of oversight," Kelliher said. "Our actions today show that."

Portland, Ore.-based PacifiCorp, a subsidiary of billionaire Warren E. Buffett's MidAmerican Energy Holdings Co., faces the largest fine, $10 million, and it also agreed to pay $884,000 to certain transmission customers. FERC staff members found 329 violations by PacifiCorp of rules governing how the utility lets customers and its own subsidiaries use its power lines.

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