FERC authorized another hefty penalty concerning fraudulent demand response in the MISO capacity market, this time approving an $18 million settlement over Voltus reportedly falsifying registrations and overstating capacity from 2017 to 2021.

Voltus — the first retail customer aggregator to participate in MISO capacity auctions — and FERC finalized a settlement Jan. 6 that has Voltus paying a $10.9 million civil penalty and reimbursing $7.1 million in profits to settle allegations that the company manipulated MISO’s demand response market (IN21-10). The settlement also directs Voltus co-founder and former CEO Gregg Dixon to pay a $1 million fine and step down from the Voltus Board of Directors.

Additionally, Voltus must file annual compliance monitoring reports to FERC enforcement staff for two years, with the potential for another two years of monitoring reports beyond that.

Voltus announced in early 2024 that Dixon stepped down as CEO but would remain on the company’s board of directors.

FERC’s Office of Enforcement concluded Voltus inappropriately gained access to customer data and used it to deceptively register load-modifying resources over four MISO capacity auctions. It said both Voltus and Dixon cooperated with its investigation, which began in 2021.

FERC staff said under Dixon’s direction, Voltus employees registered Ameren Illinois ratepayers as load-modifying resources without their knowledge or consent. Employees used Ameren account numbers on the utility’s website to download data required by MISO to register them.

Dixon reportedly learned from an employee sometime before MISO’s 2017/18 capacity auction that non-public data on Ameren’s customers could be obtained by registering as an Ameren business partner and then entering customer account numbers on its website.

According to Dixon, Ameren had “advanced metering infrastructure and meter data available” that enabled Voltus to “measure performance for dispatches of demand response without having to install our technology.”

Voltus in late 2016 rolled out what it called “Operation Violet” with a goal of selling 200 MW of demand reduction in MISO’s Zone 4 in southern Illinois. Voltus in some cases requested copies of Ameren customers’ utility bills to conduct analyses of what they could earn by participating in DR, FERC said, and noted that the bills contained account numbers.

For legitimate customers who entered Voltus’ aggregation program, FERC staff said Voltus employees — again at Dixon’s direction — would inflate on paper the levels of curtailment that the customers agreed to provide. FERC said Voltus employees registered some resources as if they would completely shut down if called upon without regard to whether that was possible or whether resources had agreed to it in their contracts.

According to FERC, a third-party contractor Voltus hired to help manage demand response registrations reportedly became uncomfortable over the possibility for fines and the “reputational risk for Voltus” and resigned in early 2017.

‘Scranta’

By summer 2017, Voltus had designed a computer program named “Scranta” based on a portmanteau of “scrape” and “Santa,” which scraped data from Ameren by submitting “tens of millions” of potential account numbers to the website. When the program landed on a genuine account number, it would collect customer data for a Voltus database.

When Voltus found accounts with peak demand above 50 kW, those accounts were added to an automated email distributed to Voltus leadership and a sales team to either become leads or involuntary participants in Voltus’ demand response program.

FERC said a Voltus employee sent an August 2017 email stating, “We should exercise caution increasing the scraping rate, as it would be very easy for [Ameren] to make this much harder for us with some simple server config changes.”

FERC said in its first MISO Planning Resource Auction for 2017/18, Voltus registered about 41 MW of load modifying resources without contracts. After rolling out Scranta, Voltus registered an uncontracted 207 MW with MISO in the 2018/19 PRA, 216 MW in the 2019/20 PRA and 65 MW in the 2020/21 PRA. The uncontracted megawatts included some resources that Voltus approached with unsuccessful sales pitches.

FERC said uncontracted or above-contract demand response made up 96% of Voltus’ MISO portfolio in the 2017/18 planning year, 49% in the 2018/19 planning year, 45% in the 2019/20 planning year and 29% in the 2020/21 planning year. FERC said over those years, MISO didn’t require aggregators to prove they had contractual relationships with the load-modifying resources they claimed to have at the ready.

FERC staff said Dixon acknowledged in testimony that Voltus didn’t know whether its DR resources without legitimate contracts would respond to MISO dispatch by reducing demand.

“I … noticed that you could just plug in any account number, that, you know, you could go to the [Ameren] website and just plug in — you know, you could essentially script the URL. It’s a 10-digit account number code. You could plug that in, just cycle through them, and it would identify — we created a program that would identify any loads,” Dixon told FERC staff during the investigation.

In an early 2019 Slack conversation with Voltus employees, Dixon likened the unauthorized DR registrations to his hobby clearing mountain biking trails on a nature preserve. Dixon said because he didn’t have explicit permission to cut new paths, he would work under the cover of darkness to clear brush.

An unnamed Voltus employee reportedly responded with, “If we sat around waiting for MISO to create the perfect rules for DR and always played by their exact rules there wouldn’t be DR in MISO at all!”

Parallels with Ketchup Caddy

The settlement is the latest in a string of disciplinary action from FERC regarding companies deceptively offering demand response in MISO’s capacity auctions.

This also is the second time Ameren’s website has been connected to phony demand response schemes in MISO. From 2019 to 2021, the founder of an obscure, Texas-based LLC meant to sell in-car ketchup holders used a random number generator on an Ameren website to land on actual customer accounts and cull data for fraudulent DR registrations. (See In a Pickle: FERC Issues $27M in Fines over Ketchup Caddy DR Deceit.)

Ameren did not return RTO Insider’s request for comment on whether it has addressed vulnerabilities within its website that allow companies to use random number generators to reveal customer account numbers and gain access to usage data.

Voltus Neither Admits nor Denies

Voltus said the settlement should not be construed as it admitting to market manipulation.

“Under the terms of the settlement agreement, we are not acknowledging wrongdoing in connection with bringing demand response to MISO for the first time. We have not been accused of, let alone admit to, any market manipulation. Rather, we are entering a no-admit/no-deny settlement on tariff violations. Moving forward, we will continue to act according to the letter and spirit of all applicable laws, regulations and market rules,” the company said in an emailed statement to RTO Insider.

Voltus said with the settlement behind it, its “team is free to put its undivided focus on creating opportunities for customers and on delivering a more reliable, affordable and sustainable electric grid.”

“Voltus will continue to work with regulators, including FERC, to ensure that tariffs that govern demand-side resources are clear and consistently applied,” the company said.

Voltus said it remains proud of the $175 million it has paid customers over the past nine years, “much of which comes from markets that previously did not allow demand response.”