By Amanda Durish Cook

Public Citizen asked FERC Monday to rehear its ruling dismissing complaints over MISO’s 2015/16 capacity auction, saying the commission failed to justify its finding that there was no market manipulation.

The public interest group said FERC’s conclusion that Dynegy did not manipulate the market and that the ensuing $150/MW-day clearing price in Southern Illinois’ Zone 4 was reasonable was wrong on both counts (EL15-70).

The Zone 4 clearing price was a nine-fold price increase compared with just $16.75/MW-day a year earlier. MISO’s other nine local resource zones cleared below $3.50/MW-day that year. Public Citizen, the Illinois Attorney General and Southwestern Electric Cooperative had questioned Dynegy’s market behavior because the company controlled a significant portion of the capacity available in Zone 4.

In mid-July, FERC wrapped up a three-year-old investigation into MISO’s 2015/16 Planning Resource Auction by finding no market manipulation on Dynegy’s part. The commission also found Zone 4’s $150/MW-day clearing price just and reasonable, declining to set up an evidentiary hearing to possibly recalibrate the auction results. (See FERC Clears MISO 2015/16 Auction Results.) FERC said a clearing price isn’t unjust simply because it’s higher than expected.

Public Citizen charged that FERC is in “brazen violation” of the Administrative Procedure Act.

“The commission did not include the evidence from the nonpublic investigation in the record, did not allow the parties to address it and did not say in even the most general terms what, in its view, that evidence showed. Nor did the commission address the arguments advanced by the parties as to whether manipulation had occurred,” Public Citizen said. “The commission offered no account of what, in its view, Dynegy had in fact done or of why that conduct did not amount to manipulation.”

FERC ruled that although Dynegy had pivotal supplier status and that substantial price separation occurred between Zone 4 and the rest of MISO, the RTO had conducted the auction in accordance with its Tariff and market power mitigation rules.

Public Citizen said it didn’t appear that FERC examined whether MISO’s circa-2015 market power provisions were effective. The omission was “striking,” Public Citizen said, because just eight months after the auction, FERC ruled that MISO’s rules for the 2016/17 auction were not just and reasonable. FERC said MISO didn’t accurately gauge power exports and its $155.79/MW-day maximum bid should be set closer to $25. (See FERC Orders MISO to Change Auction Rules.)

Commissioners Cheryl LaFleur and Richard Glick expressed displeasure last month that they were not consulted before Chairman Neil Chatterjee closed the investigation. In a dissent, Glick called July’s order a “wholly unsatisfactory response to the allegations of market manipulation,” saying FERC didn’t provide “even the scantiest reasoning to support its finding that the nearly 1,000% year-over-year increase in the MISO Zone 4 capacity price had nothing to do with market manipulation.”

Tyson Slocum, director of Public Citizen’s Energy Program, acknowledged the group’s chances of prevailing in the rehearing request were slim.

“We’re in this for the long haul,” he said in an interview. “The request for rehearing is not necessarily to change the commission’s vote but to get this before a federal court.”