Mistakes chiefly affect how much customers pay
Tom Johnson reports for NJ Spotlight:
Public Service Enterprise Group will pay $39 million to settle allegations of numerous violations by a subsidiary concerning its bidding into the nation’s largest energy market.
In a consent agreement signed Monday and made public Wednesday with the Federal Energy Regulatory Commission, PSEG Energy Resources & Trade, LLC admitted to the facts set forth in the stipulation while neither admitting nor denying the violations.
The violations involved assorted errors in bids the company submitted to PJM Interconnection, the operator of the regional power grid, dating back to 2005. The bids largely determine how much consumers pay for electricity.
The notice of the investigation earlier this month came as PSEG is on the verge of gaining approval for a controversial bill (S-2313) to direct up to $300 million a year in subsidies from ratepayers to prop up three nuclear power plants in South Jersey. Without the subsidies, PSEG has threatened to close the plants because they are economically challenged.
Unproven claims
Critics of the bill, now awaiting action by Gov. Phil Murphy, contend the company has failed to prove its claim that the units will turn unprofitable within the next few years.
In the consent decree with FERC, the company, the trading arm of PSEG Power, which runs the plants, agreed to pay a civil penalty of $8 million. The company also will disgorge $26.9 million in unjust compensation for the incorrect bids, as well as $4.5 million in interest.
“It’s a lot of money,’’ noted Division of Rate Counsel Stefanie Brand. Most of it involves disgorgement, which is the profit the company should not have made, she noted.
The federal agency was made aware of the incorrect bids, which staff alleged were false and misleading, as a result of the company’s self-reporting of the problem in April 2014.
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