FERC on Dec. 5 approved a $150,000 civil penalty on Black Hills Corp. (BHC) and its three electric public utility subsidiaries for their failure to timely file 103 jurisdictional agreements (IN23-10).
The stipulation and consent agreement between FERC’s Office of Enforcement (OE) and BHC and its subsidiaries — Black Hills Power; Cheyenne Light, Fuel and Power; and Black Hills Colorado Electric — stems from a prolonged FERC investigation triggered by the utilities’ self-reporting of their omissions.
Jurisdictional agreements detail rates, terms and conditions of services regulated by FERC and are essential for ensuring transparency, regulatory compliance and fair pricing.
On July 14, 2017, Black Hills Power reported to FERC that it had failed to submit six jurisdictional agreements as mandated by the Federal Power Act and FERC regulations (ER17-2095). This lapse led to Black Hills Power refunding $8,621 to customers.
This incident prompted BHC to conduct a more extensive investigation into its subsidies to determine if there were any other unfiled contracts.
By November 2021, BHC expanded its self-report to include an additional 97 unfiled contracts, leading to an estimated $1.2 million in refunds.
As of October 2021, BHC had filed all 103 previously unfiled agreements with FERC, some of which have been accepted, while others are still under review.
“As a result of these violations,” the stipulation said, “Black Hills provided jurisdictional services without an accepted just and reasonable rate on file at the commission.”
The agreements consisted mainly of short-term firm and nonfirm transmission service contracts, but also included transmission wires-to-wires interconnection agreements, delivery service to wholesale customers over distribution assets agreements, and joint ownership agreements and operation and maintenance services agreements on transmission assets.
FERC acknowledged BHC’s cooperation with the OE throughout the investigation.
In addition to the financial penalty payable to the Treasury, BHC was required to admit its non-compliance and implement measures to prevent future violations.
These measures include submitting semi-annual status reports that detail the status of each of the 103 previously unfiled agreements every six months for two years or until FERC has accepted or disposed of all the unfiled agreements. It must also undergo compliance monitoring for two years following the acceptance or final disposition of all filed agreements by the commission.
BHC must pay the civil penalty within 20 days of the agreement’s effective date and submit its first semiannual status report six months thereafter.
FERC Commissioner James Danly did not participate in the order.
