By Tom Kleckner
Westar Energy will pay a civil penalty of $180,000 for submitting inaccurate mitigated energy offer curves (EOCs) under a settlement with FERC’s Office of Enforcement.
Westar also agreed to be subject to Enforcement monitoring under the settlement, which was approved by FERC on Thursday (IN15-8). The Kansas utility will submit annual compliance monitoring reports for two years, with a third year possible at the office’s discretion.
The violations occurred between October 2014 and February 2015, when Westar submitted cost inputs three times for its State Line plant that FERC said were “inconsistent” with the cost parameters on file with SPP’s Market Monitoring Unit. The incorrect data resulted in the utility receiving make-whole payments of about $60,000.
The MMU requested in March that Westar produce data validating its mitigated EOCs. It found the data insufficient and referred the company to Enforcement.
Mitigated EOCs in the RTO’s Integrated Marketplace must be based on an individual resource’s costs and unit characteristics. They are generated according to a formula that contains several inputs, including a fuel cost adder for variable operations and maintenance (VOM) costs.
Enforcement’s investigation determined a Westar employee inadvertently increased the fuel VOM charge from 5 cents to 50 cents for the company’s share of the two State Line units. Staff also found the utility submitted incorrect heat rate coefficients for one of the units.
The utility voluntarily refunded the $60,000 to SPP in June 2015 and took “effective measures to identify mitigated EOCs that [it] failed to properly update,” FERC said.
The commission noted that the utility cooperated throughout the investigation and promptly responded to requests for data and testimony. The utility filed a detailed report in June 2015 explaining the origin of the errors, the steps taken to correct them and the plans implemented to prevent them in the future.
Westar is the largest electric company in Kansas, serving 690,000 residential, commercial and industrial customers in the eastern third of the state.
