FERC fails to act on complaint of New England electricity market manipulation

The federal agency that regulates the power grid failed to act on a complaint of electricity market manipulation, frustrating activists who alleged New England ratepayers will pay more because of the closing of the Brayton Point power plant in Somerset.

Consumer advocates had asked the Federal Energy Regulatory Commission to review an auction that secured commitments from power generators to meet New England’s demand for electricity in 2017. On Tuesday, FERC issued a notice saying the results of that auction would go into effect because the commission missed the deadline to rule on the complaint.

The consumer advocacy group Public Citizen filed a complaint in April alleging that ISO New England, the region’s grid operator, overpaid for future power commitments by an estimated $1.4 billion in an auction held February. To help meet the region’s future power needs, ISO New England secures the commitment of generators to provide electricity in the years ahead, paying them based on an auction.

Public Citizen accused Energy Capital Partners, a private equity firm that owns several power plants in the region, of buying Brayton Point and announcing that it would close in 2017 as a way to limit future electricity supplies and increase prices. Those increases, Public Citizen estimated, would earn Energy Capital Partners an extra $74 million from selling power generated at its other Northeastern plants.

Tyson Slocum, who runs Public Citizen’s energy program, called Tuesday’s notice “an outrage” and said his group would ask for a rehearing and seek review of the auction in federal court.

“This is a clear case of power manipulation,” Slocum said.

Energy Capital Partners did not respond to requests for comment. In past statements, the company said it was closing Brayton Point, a coal-fired power plant, for economic reasons and said charges of market manipulation were “baseless and uninformed.”

The Brayton Point plant was built in 1953. In their letter announcing its closure, its owners said that the costs of regulation and abundant supplies of cheap natural gas will make the plant unprofitable in the long run.

It is rare for FERC not to issue a ruling on a complaint about electricity rates. The commission’s four members issued statements after the notice that suggested they were deadlocked over whether the bidding process used by ISO New England to allot future power generation was “just and reasonable.”

FERC normally has five members, but one seat on the board is vacant.