Order approving audit report and directing compliance actions, Audit of Standards of Conduct, Codes of

Theyl - Ferc

Le téléchargement nécessite un accès à la bibliothèque YouScribe
Tout savoir sur nos offres

66 pages

English

Le téléchargement nécessite un accès à la bibliothèque YouScribe
Tout savoir sur nos offres

A propos
Informations
Extrait

Description

Informations

Publié par	Theyl
Nombre de lectures	31
Langue	English

Extrait

111 FERC ¶ 61,243
UNITED STATES OF AMERICA
FEDERAL ENERGY REGULATORY COMMISSION

Before Commissioners: Pat Wood, III, Chairman;
Nora Mead Brownell, Joseph T. Kelliher,
and Suedeen G. Kelly.

Florida Power Corporation Docket No. PA04-10-000

Carolina Power & Light Company Docket No. PA04-12-000

ORDER APPROVING AUDIT REPORT AND
DIRECTING COMPLIANCE ACTIONS
(Issued May 25, 2005)
1. In this order, we approve the attached Audit Report (Report) prepared by the
Division of Operational Audits (Operational Audits), Office of Market Oversight and
Investigations. The Report contains Operational Audit staff’s findings and
recommendations with respect to Carolina Power & Light Company (CP&L) and Florida
Power Corporation’s (FPC) (collectively, Progress Energy) compliance with the
Commission’s rules, regulations, and requirements. The Commission directs Progress
Energy to enact the Report’s recommended corrective actions, including the procedural
remedies outlined in this order. In addition, in order to resolve this audit, Progress
Energy has agreed to make the refunds/credits outlined in this order. This order is in the
public interest because the recommendations made in the Report provide appropriate
remedies for the findings in the Report, and also require the establishment of strict
procedures to help ensure future compliance with applicable requirements of law and the
Commission’s rules and regulations.
Background
2. On November 20, 2003, Operational Audits issued a letter to FPC in Docket No.
PA04-10-000 and CP&L in Docket No. PA04-12-000 announcing that it was
commencing an audit to determine whether CP&L and FPC were in compliance with:
(1) Standards of Conduct and Open Access Same Time Information System (OASIS)
requirements; (2) Codes of Conduct requirements; and (3) FPC and CP&L’s Open
Access Transmission Tariff (OATT) provisions. The audit period was from January 1,
2002, through October 31, 2003, and the audit measures compliance with Commission
rules, regulations, and requirements in existence during that time.

3. Operational Audits issued data requests, conducted thorough site visits, and held
multiple meetings with Progress Energy’s counsel, officials, and staff.
Discussion
4. Operational Audits determined that Progress Energy did not fully comply with
Commission rules, regulations, and requirements, and made recommendations to correct
the identified areas of non-compliance or departures from best practices.
5. The Principal Report findings are:
Codes of Conduct Findings

A. Coordination of Wholesale Marketing Strategies: During the summer and fall
of 2003, Progress Energy staff exchanged market information and failed to
make a simultaneous posting of this exchange, as required under its Codes of
Conduct. The exchange of market information occurred as part of Progress
Energy’s strategic evaluation of alternative organizational structures for its
marketing operations. Market information was exchanged during meetings at
which both wholesale merchant function (WMF) and affiliated power marketer
(APM) staff participated, when participants identified specific wholesale
customers that would be targeted by either the WMF or APMs. The
coordination of wholesale marketing strategies that occurred, including the
sharing of market information between the WMF and APMs, is inconsistent
with the explicit requirement in Progress Energy’s Codes of Conduct that
WMF and APMs operate separately to the maximum extent practical.
B. Opportunity for Exchange of Market Information via Combustion Turbine (CT)
Operations: Progress Energy organized its CT Operations group in a manner
that creates the opportunity for the exchange of market information between the
APMs and the Operating Companies and is inconsistent with the Codes of
Conduct requirement that the APMs and Operating Companies operate
separately. CT Operations, a unit within the generation function, is responsible
for the operation and maintenance of Progress Energy’s entire fleet of CTs,
including the CT fleet owned by the Operating Companies and the CT fleet
owned by APMs. One employee does outage planning for both fleets. Other

employees in the company’s Raleigh headquarters that may work on only the
Operating Companies’ fleet work side-by-side with employees who work on
only the APMs’ fleet. These employees perform operational functions (rather
than support functions) and have access to market information for both fleets of
CTs.
C. Access to Market Information via the Company’s Intranet: On several
occasions, Progress Energy’s WMF and APMs had access, via the company’s
intranet, to prohibited outage, cost and operations data for generating plants
owned by the APMs and the Operating Companies.
D. Potential Exchange of Market Information via Forward Curves: Employees of
Progress Ventures’ risk analytics group creates and distributes forward curves
to traders in both WMF and APM. In part, these forward curves are based on
price data collected separately by the WMF and APM trading groups. The
price data collected separately by the Operating Companies’ trading group is
market information, under the definition of market information in the
company’s Codes of Conduct. By providing access to these price data in the
shared forward curves, the shared employees of the risk analytics group act as a
conduit of market information.
E. Charges to Affiliated Power Marketers for Brokering Services: Progress
Energy’s brokering activities prior to March 2002 were inconsistent with the
requirements of Codes of Conduct and Commission Orders. Progress Energy
has provided no evidence that the charges for brokering activities were set
equal to the higher of cost or market value and that the actual charges were
posted on the company’s EBB.
F. Exchange of Market Data and Insufficient Disclosure of the Exchange: During
a February 2003 meeting that both WMF and APM employees attended, market
information was exchanged. Codes of Conduct require that when market
information is exchanged, simultaneous posting of the market information is
required. Nine days after the market information was shared, a redacted
version of a presentation made at the meeting was posted on Progress Energy’s
Electronic Bulletin Board (EBB).
G. Lack of Oversight of Instant Messaging between Wholesale Merchant Function
and APM Employees: RCO and CCO traders use instant messaging (IM) to
survey the market and initiate trades. Progress Energy’s lack of oversight over
instant messaging inhibits its ability to verify that marketing employees do not
use instant messages to exchange market information, which would be
inconsistent with the Codes of Conduct.
Standards of Conduct Findings
H. Information Exchange during Daily Unit Commitment Phone Calls: Employees
of the WMF and the transmission function take part in a teleconference each
morning that could lead to the exchange of transmission information off-
OASIS, which would be inconsistent with the Standards of Conduct. Staff’s
primary concerns are that these conversations could facilitate such
inappropriate off-OASIS communications.
I. Information Exchange during Hourly Phone Calls between Generation
Dispatcher and Hourly Traders: A WMF hourly trader and the generation
dispatcher/AGC operator at the Energy Control Centers talk by phone each
hour to discuss the capacity on-line and available to sell. These phone calls
could lead to the exchange of transmission information off-OASIS, which
would be inconsistent with the Standards of Conduct.
J. Frequent Visits by Merchant Function Employees to the ECCs: WMF and
APM employees frequently visit the ECCs operated by Progress Energy,
particularly the ECC in Raleigh. While such visits are not per se violations of
the Standards of Conduct, such visits increase the opportunity for marketing
employees to gain access to commercially-valuable transmission information
that is not publicly available. The controls in place at the ECCs are not
sufficient to demonstrate the purpose or the details of such visits, which
exacerbates staff’s concerns that such visits may facilitate marketing employees
having off-OASIS access to transmission information.
K. FPC’s Transmission Function Does Not Log or Post Uses of Discretion: FPC
does not log or post on OASIS instances when its dispatchers ask its senior
engineer to recalculate ATC in order to confirm a pending transmission service
request. FPC dispatchers do not consider this an act of discretion and thus do
not keep a log of such requests or post documentation of the requests on
OASIS. In staff’s view, such a request is an act of discretion and should be
logged and posted on OASIS.
L. Inappropriate Access to Market and Transmission Data: On several
occasions, WMF employees have had direct or indirect access to market or
transmission data via the Energy Management System (EMS). The WMF had
access to the generation levels of independent merchant generators in Florida
Power Corporation’s control area for at least two months. In ad