FERC Must Rehear Case on Dynegy Market Manipulation That Cost Illinois Ratepayers $100 Million
Case Dismissal Was Arbitrary, Capricious, Contrary to Law
WASHINGTON, D.C. – Energy company Dynegy, Inc. stands accused of manipulating markets in a 2015-2016 power auction, costing 6 million southern Illinois ratepayers more than $100 million. But in July, the Federal Energy Regulatory Commission (FERC) dismissed complaints about the company’s market manipulation scheme and the resulting excessive rates based on secret information.
FERC’s action was a brazen violation of the Administrative Procedure Act, and the agency needs to rehear the case, Public Citizen said on Monday in a filing. Nothing in the public record refutes Public Citizen’s original contention that Dynegy manipulated markets and ripped off millions of Illinois consumers.
“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’s rehearing request reads. “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.”
Dynegy’s alleged market manipulation occurred in connection with a Midcontinent Independent System Operator (MISO) Zone 4 auction in 2015-2016, which set electricity rates in southern Illinois. Dynegy had recently acquired several coal plants in Zone 4, effectively giving the company the ability to dictate rates in that zone. The company then inflated market rates in the auction to $150 per megawatt-day – more than 43 times the rates in all other MISO zones and nearly nine times the Zone 4 rate in the previous year.
Public Citizen is asking FERC to rehear the case and, ultimately, establish a process to refund ripped-off Illinois consumers.