The winter’s high gas and power prices have busted budgets and left state regulators and consumer advocates scrambling for answers.

“Our sources of emergency funding [for low income customers] are running out, arrearages are going up,” Maryland Public Service Commissioner Lawrence Brenner told the FERC technical conference Tuesday. “It’s a bad situation.”

Paula Carmody, head of the Maryland Office of People’s Counsel, said many retail electric customers with variable rate plans saw their bills jump as much as four-fold. Customers don’t understand the terms of their contracts and what would trigger rate hikes, she said.

Citing PJM’s high outage rates in January, Carmody called on FERC to investigate whether generator operators had properly maintained their units. PJM should examine whether it has sufficient incentives for maintenance and penalties for nonperformance, she said.

She also echoed the call by the Consumer Advocates of PJM States for an investigation into whether market manipulation or withholding contributed to the high prices. “There needs to be a thorough review of potential market power abuse,” said Carmody, who acknowledged she had no evidence of improprieties. “Either address it or take it off the table.”

The PJM Market Monitor told FERC in a filing last week that seven generators that sought reimbursement for operating costs above the RTO’s $1,000/MWh offer cap had inflated their claims. The Monitor’s report concluded that all but $9,118 of the nearly $584,000 in requested make-whole payments should be rejected. (See Stakeholders Preview Offer-Cap Debate.)

FERC officials told the conference Tuesday that the commission’s Office of Enforcement has found no evidence of manipulation or withholding to date. Although staff is continuing its review, its preliminary conclusion is that natural gas spot prices were driven by “high demand, pipeline flow restrictions, covering of physical short positions and concern for pipeline penalties.”

Enforcement Tools

FERC’s Division of Analytics and Surveillance, created in 2012, uses computer algorithms to analyze public and non-public data for anomalies that could suggest market manipulation.

Among the sources screened are market data from PJM and other RTOs, including offers, uplift and outages; Financial Transmission Rights holdings; e-Tags; transactions on the Intercontinental Exchange; Electronic Quarterly Reports; and Form 552, which records natural gas trades.

Staff also used its recently granted access to the Commodity Futures Trading Commission’s Large Trader Report to identify companies’ financial incentives at volatile trading hubs.

The screens, built by division staff based on market rules and known manipulative schemes, generated multiple alerts in January and February for New England, the Mid-Atlantic, the Midwest and California, FERC said.

Enforcement staff responded by conducting discussions with RTO and market monitoring officials. It also issued data requests to some companies and conducted “dozens” of interviews with generators, gas suppliers and traders to gather intelligence on operations and bidding behavior.