By Christen Smith

Shell Energy last week asked the D.C. Circuit Court of Appeals to review two FERC rulings in the GreenHat Energy default case after the commission denied the company a role in settlement negotiations in August.

Attorneys for Shell filed its challenge Oct. 21, appealing the commission’s June 5 and Aug. 22 orders that established a paper hearing for PJM’s failed waiver request and denied rehearing arguments that the company should participate in subsequent settlement proceedings. (See Shell Demands Seat at GreenHat Settlement Table and FERC Denies Shell, ODEC GreenHat Settlement Role.)

PJM filed an agreement with FERC earlier this month that would see the RTO pay $12.5 million to two trading firms that alleged economic harm after its waived its own liquidation rules to settle GreenHat’s 890 million MWh defaulted financial transmission rights portfolio in July 2018. (See PJM to Pay $12.5 million to End GreenHat Dispute.) PJM also asked the commission to waive the comment period should it receive no negative feedback on the agreement, due with FERC on Oct. 29 (ER18-2068).

It’s unclear if Shell will protest the settlement or request payout from the $5 million fund PJM would establish for additional claimants, per the agreement. Jonathan Franklin, Shell’s attorney, did not respond to RTO Insider’s request for comment. Attempts to contact Shell itself were also unsuccessful.

Shell pleaded with the commission in July for a role in settlement negotiations, saying it was “uniquely situated” in the proceeding and could bear a disproportionate financial burden based on its outcome. The company filed one of the more than 20 late motions to intervene that were dismissed by FERC in the June 5 order.

In its request for rehearing, Shell said a PJM Tariff provision caused its tardiness, a circumstance that it says none of the other petitioners faced. It had explained that it entered into three bilateral contracts with GreenHat that involved transferring FTRs back and forth between the two companies. Liquidating the GreenHat portfolio “could substantially affect the amount sought by PJM from Shell for the guarantee and indemnification claim” the RTO placed on the portion that was transferred. (See Shell Energy Seeks to Avoid Liability in GreenHat Trades.)

In August, the commission said it found Shell’s argument “unpersuasive,” reiterating that the company had no excuse for an untimely intervention.

Jeff Shields, a PJM spokesperson, told RTO Insider on Friday the RTO doesn’t expect Shell’s appeal to affect the settlement proceeding, noting that “obviously FERC will be able to take into account any comments that are filed.”