FERC on Monday approved settlements with two demand response aggregators for allegedly bidding more resources than they could provide to CAISO’s market.
OhmConnect (IN23-6) agreed to pay a fine of $141,094 and disgorge $8,906 to the ISO, while Leapfrog Power (IN23-7) agreed to pay $73,880 and disgorge $46,120. Both companies agreed to heightened compliance monitoring in order to shut down enforcement probes over their DR bidding activities.
Both firms were participating in the California Public Utilities Commission’s Demand Response Auction Mechanism (DRAM) pilot program, in which they contract with load-serving entities to provide a set amount of demand response every month. The program required them to tell the LSE they were working with how much DR they would have available in a month 90 days ahead of time.
Ohm’s allegedly problematic bids happened between January and June 2018, and it made $8,906 more than it should have, while Leapfrog’s came between February and August 2019, and it made $46,120 more than it should have.
The two have different business models, with the California-based Ohm focusing on home energy management via customers’ smart meters. It allows residential customers to earn rewards for their energy reductions, which it sells into the markets.
Ohm signed up to provide 109 MW of DR for the 2018 delivery year, but it was not able to sign up enough customers to provide that much, with shortfalls ranging from 32 to 63%.
Leapfrog connects electric vehicle, battery storage, smart thermostat and other flexible technologies to provide DR and enrolls them in the wholesale markets in aggregated portfolios. Leapfrog was a startup and it first bid into the DRAM program in 2018 for 2019 delivery, but it was never able to sign up enough customers to support its bids. Most of the bids it made from February to August exceeded the registered metered load of customers it had signed up, with shortfalls ranging from 54 to 98%.
CAISO’s tariff requires that market participants make bids from resources that are reasonably expected to be available and capable of performing at the levels specified in their bid and to remain so based on all information that is or should have been known to the market participant when their bids were made.
FERC Office of Enforcement staff determined that both Ohm and Leapfrog made a “substantial majority” of their bids when they could not reasonably expect to fulfill them during the relevant periods. In both cases their bids “exceeded the registered metered load of all” their customers.
Both firms stipulated to some facts laid out in the agreement, but neither admitted nor denied the violations that enforcement staff alleged.
Both firms cooperated with the investigations and FERC found that the deals they signed with its staff were fair and equitable resolutions of the matters concerned and are in the public interest because they reflect the allegations’ seriousness and are in line with the regulator’s penalty guidelines.
CAISO will distribute the $55,000 in disgorgements on a pro-rata basis to its network load.
