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Following energy issues in the state of Connecticut and beyond.

Monday, April 13, 2009

ISO-New England, You Got Some 'Splainin' To Do...

That's what two Connecticut agencies are saying, anyway.

The state's Department of Public Utility Control (DPUC) and the Office of Consumer Counsel (OCC) want federal energy regulators to force ISO- New England to disclose details regarding an $85.8 million payment made to a pair of power plant operators who then failed to deliver the electricity they had promised.

Coming out when it did, on the eve of a long holiday weekend for many people, this news may have missed by more than a few people. But this has all the elements of being a really interesting story as well as an infuriating one for Connecticut ratepayers.

It involves gobs and gobs of money being given to companies that allegedly failed to do their jobs (Stop me if you think this sounds a little bit like the current financial services industry mess). It also has the DPUC and OCC paraphrasing an old line from the Watergate scandal, "What did ISO-NE know and when did they know it?"

Over a 26-month period between 2006 and 2009, ISO-NE paid two unnamed power plant operators $85.8 million from ratepayers across the region to provide power. That wouldn't be a problem, but the companies in question failed to live up to their end of bargain on 108 separate occasions.

You'd think that ISO-NE officials would be falling all over themselves to provide the DPUC and OCC with any information those agencies might need, rather than waiting for the federal government to step in. But ISO-NE officials will only say, in the words of spokeswoman Marcia Blomberg, that the regional electric grid operator “will comply with any FERC directive.”

The news that the DPUC and OCC want more information on these transactions shouldn't come as a surprise to ISO-NE officials.

After all, the Holyoke, Ma.-based grid operator recently filed a proposal with FERC seeking to close an alleged loophole in the forward capacity market. The market is designed to allow ISO-NE to purchase sufficient power generating capacity for future years at competitive prices.

As the economy continues to sour, consumers' patience for people getting paid enormous sums of money for a job poorly done is limited at best; witness all the anger directed at AIG employees who got bonuses.

That same level of anger ought to be applied to this case, even though none of the parties involved got any government bailout money. As ratepayers, Connecticut resident ought to be livid that ISO-NE officials apparently did anything to punish the two companies for failing to do what they said they would.

And to some of that anger ought to be directed at ISO-NE, which won’t identify the power plant owners in questions. The grid operator considers the companies' names to be "proprietary information," according to Blomberg.

You'd think $85.8 million dollars of our money would at least buy us that much information.

And although I'm no lawyer, the argument that the identities of the companies involved are proprietary seems dubious at best.

Maybe more intricate details of the companies' dealings with ISO-NE should be considered proprietary. But how does identifying the names of power plant operators that didn't provide services they got paid for meet that threshold?

The truth is, it doesn't and actually could harm consumer confidence in ISO-NE's ability to run the region's competitive power marketplace.
After all, why should ratepayers have any confidence in an entity that either:

A) Can't find loopholes in its markets and close them before someone exploits them, raking in millions of dollars they did nothing to earn.


B) Allows a few players in the market to hurt the reputations of all the other power producers.

There's no question that the markets in which the electricity we use is bought and sold are extremely complex. But from my perspective, this particular matter seems amazing simple at this point.

The way I see, where can I find the kind of work that pays me $85.8 million for doing something and then allows me to walk away unpunished when I don't do my job?


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