

[Federal Register: November 14, 2005 (Volume 70, Number 218)]
[Notices]               
[Page 69149-69151]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr14no05-48]                         


[[Page 69149]]

=======================================================================
-----------------------------------------------------------------------

DEPARTMENT OF ENERGY

Federal Energy Regulatory Commission

 
Order Revoking Market-Based Rate Authority, Establishing Hearing 
and Settlement Judge Procedures, and Terminating Section 206 Proceeding

Issued November 3, 2005.
Before Commissioners: Joseph T. Kelliher, Chairman; Nora Mead 
Brownell, and Suedeen G. Kelly.

    In the matter of: ER98-3809-000, ER97-2867-000, ER98-4685-000, 
ER00-105-000, ER97-512-000, ER00-861-000, ER97-2132-000, ER01-2355-
000, ER00-679-000, ER98-701-000, ER01-1701-000, ER00-2945-000, ER01-
2138-000, ER90-225-000, ER99-964-000, ER97-1968-000, ER05-737-000, 
ER98-1790-000, ER96-2624-000, ER01-2071-000, ER94-1161-000, ER94-
1099-000, ER99-3098-000, ER98-2020-000, ER98-2918-000, ER96-358-000, 
ER01-2221-000, ER96-138-000, ER99-254-000, ER98-3233-000, ER01-666-
000, ER97-382-000, ER96-918-000, ER00-1258-000, ER97-3580-000, ER02-
687-000, ER96-1933-000, ER01-1078-000, ER01-2405-000, ER98-4334-000, 
ER01-3023-000, ER01-2129-000, ER96-1819-000, ER95-802-000, ER98-
3478-000, ER00-1519-000, ER01-688-000, ER00-2306-000, ER95-784-000, 
ER95-295-000, ER95-232-000, ER03-1259-000, ER94-1672-000, ER02-30-
000, ER01-1507-000, ER00-1781-000, ER99-801-000, ER99-1156-000, 
ER95-78-000, ER01-2509-000, ER02-1238-000, ER94-1593-000, ER95-192-
000, ER01-352-000, ER98-2618-000, ER99-2537-000, ER97-2681-000, 
ER96-2892-000, ER98-1915-000, ER94-152-000, ER97-1716-000, ER01-904-
000, ER98-622-000, ER02-41-000, ER98-3048-000, ER98-1125-000, ER01-
1479-000, ER02-845-000, ER97-181-000, ER99-2883-000, ER95-379-000, 
ER03-372-000, ER01-1821-000, ER99-3275-000, ER96-2303-000, ER97-
3187-000, ER96-1-000, ER01-2463-000, ER95-968-000, ER99-1876-000, 
ER96-404-018 ER02-809-000, ER96-1516-000, ER01-2217-002 ER96-2524-
000, ER01-2694-000, ER01-373-002, ER00-494-000, ER98-1055-000, ER01-
3148-000, ER01-2234-000, ER04-957-000, ER96-105-000, ER01-1709-000, 
ER02-1046-000, ER98-537-000, EL05-111-000; 3E Technologies, Inc., AC 
Power Corporation, ACN Power, Inc., AI Energy, Inc., A'Lones Group, 
Inc., Alrus Consulting, LLC, Atlantic Energy Technologies, I Inc., 
Beacon Generating, LLC, Black River Power, LLC, California Polar 
Power Broker, L.L.C., Callaway Golf Company, Candela Energy 
Corporation, Capital Energy, Inc., Chicago Electric Trading, L.L.C., 
Cielo Power Market, L.P., Colonial Energy, Inc., Commerce Energy 
Inc., Competisys LLC, Cumberland Power, Inc., Desert Power, L.P., 
Direct Electric Inc., Eclipse Energy, Inc., EGC 1999 Holding 
Company, L.P., Energy Clearinghouse Corp., Energy PM, Inc., Energy 
Resource Management Corp., Energy Transfer-Hanover Ventures, LP, 
EnergyOnline, Inc., ENMAR Corporation, Environmental Resources 
Trust, Inc., EWO Marketing, L.P., Exact Power Co., Inc., Federal 
Energy Sales, Inc., First Electric Cooperative Corporation, First 
Power, LLC, FMF Energy, Inc., Gelber Group, Inc., George Colliers, 
Inc., GNA Energy, LLC, Golden Valley Power Company, Hinson Power 
Company, LLC, Holt Company of Ohio, ICC Energy Corporation, IEP 
Power Marketing, LLC, INFINERGY Services, LLC, InPower Marketing 
Corporation, IPP Energy LLC, It's Electric &Gas, L.L.C., J. Anthony 
& Associates Ltd, Kaztex Energy Ventures, Inc., Kimball Power 
Company, Kloco Corporation, Lambda Energy Marketing Company, 
Longhorn Power, LP, Lumberton Power, LLC, Marquette Energy, LLC, 
Metro Energy Group, LLC, Michigan Gas Exchange, L.L.C., Mid-American 
Resources, Inc., Morrow Power, LLC, MPC Generating, LLC, National 
Power Exchange Corp., National Power Management Company, Natural Gas 
Trading Corporation, Nautilus Energy Company, Navitas, Inc., New 
Millennium Energy Corp., NGTS Energy Services, Nine Energy Services, 
LLC, North American Energy Conservation, Inc., North Atlantic 
Utilities Inc., North Carolina Power Holdings, LLC, North Star Power 
Marketing, LLC, North Western Energy Marketing, LLC, Northeast 
Electricity Inc., Northeast Empire L.P. 2, Northwest 
Regional Power, LLC, Northwestern Wind Power, LLC, Oceanside Energy, 
Inc., Old Mill Power Company, Peak Energy, Inc., Peak Power 
Generating Company, Power Dynamics, Inc., Power Management Co., LLC, 
Power Providers Inc., Power Systems Group, Inc., Powertec 
International, LLC, Pro-Energy Development LLC, Progas Power Inc., 
PS Energy Group, Inc., Questar Energy Trading Company, Renewable 
Energy Resources LLC, SEMCOR Energy, Sunrise Power Company, Symmetry 
Device Research, Inc., The Energy Group of America, Inc., Tiger 
Natural Gas, Inc., TransAlta Centralia Generation LLC, TransAlta 
Energy Marketing (US) Inc., TransAlta Energy Marketing Corp. (US), 
Travis Energy & Environment, Inc., TXU Electric Delivery Company, 
U.S. Power & Light, Inc., VIASYN, Inc., Walton County Power, LLC, 
Western Energy Marketers, Inc.

    1. In this order, the Commission revokes the market-based rate 
authority of the companies that failed to comply with the Commission's 
May 31, 2005 Order \1\ and the conditions under which the Commission 
granted them market-based rate authority. In addition, the Commission 
will revoke the market-based rate authority of two entities who 
responded to the May 31 Order, but did so in a patently deficient 
manner. The market-based rate tariffs of these entities are terminated 
effective on the date of issuance of this order. Furthermore, we will 
direct these entities to inform the Commission whether they have made 
any sales pursuant to their market-based rate tariffs after the refund 
effective date established in this proceeding, and, for those entities 
that have made such sales or that fail to respond, we will establish 
hearing and settlement judge procedures to determine whether and in 
what amount these entities should be required to disgorge their profits 
from these sales. In addition, this order accepts filings notifying the 
Commission that certain entities were inadvertently included in the May 
31 Order.\2\
---------------------------------------------------------------------------

    \1\ 3E Technologies, Inc., 111 FERC ] 61,295 (2005) (May 31 
Order).
    \2\ The Commission has also received a number of updated and 
revised market power analyses in response to the May 31 Order, which 
will be addressed in a separate order.
---------------------------------------------------------------------------

Background

    2. As a condition of receiving market-based rate authority, the 
Commission requires market-based rate sellers to submit an updated 
market power analysis every three years \3\ to allow the Commission to 
evaluate the reasonableness of their charges and to provide for ongoing 
monitoring of their ability to exercise market power. In the absence of 
an updated market power analysis, the Commission cannot exercise its 
statutory duty to ensure that market-based rates are just and 
reasonable and that market-based rate sellers continue to lack the 
potential to exercise market power so that market forces are in fact 
determining the price.
---------------------------------------------------------------------------

    \3\ See, e.g., Western Resources, Inc., 94 FERC ] 61,050 at 
61,247 (2001); Entergy Services, Inc., 58 FERC ] 61,234 at 61,760 
(1992); PSI Energy, Inc., 51 FERC ] 61,367 at 62,209 (1990).
---------------------------------------------------------------------------

    3. In the May 31 Order, the Commission announced its policy with 
respect to entities that have failed to comply with the conditions 
under which the Commission granted them market-based rate authority, 
namely, the requirement to submit an updated or revised market power 
analysis. In that order, the Commission directed these market-based 
rate sellers to file their updated or revised market analyses within 60 
days from the issuance of that order or to provide satisfactory support 
for why they should not be required to do so. The Commission also 
established a refund effective date under section 206 of the Federal 
Power Act (FPA) for the protection of customers.\4\
---------------------------------------------------------------------------

    \4\ 16 U.S.C. 824e (2000).
---------------------------------------------------------------------------

    4. On June 8, 2005, in response to the May 31 Order, Questar Energy 
Trading Company (Questar) filed only a statement that there has been no 
change in the facts relied upon by the Commission when it initially 
granted Questar market-base rate authority.
    5. On June 28, 2005, in response to the May 31 Order, Tiger Natural 
Gas, Inc. (Tiger) refiled its initial application for market-based 
rates, which it originally filed November 6, 2000.

[[Page 69150]]

Discussion

Revocation of Market-Based Rate Authority and Termination of Market-
Based Rate Tariffs

    6. The entities listed in Appendix A of this order have made no 
filing in response to the Commission's May 31 Order. In the May 31 
Order, we stated that we would revoke the market-based rate authority 
and terminate the market-based rate tariff of any market-based rate 
seller that failed to file the required updated or revised market power 
analysis. Accordingly, we hereby revoke the market-based rate authority 
of the entities identified in Appendix A of this order and terminate 
their market-based rate tariffs, effective on the date of issuance of 
this order.
    7. We find that the filings submitted by Questar and Tiger do not 
satisfy the Commission's directive in the May 31 Order. We note that 
Questar did not submit any market power analysis whatsoever and instead 
states that there have been no changes since its market-based rate 
tariff was accepted on January 29, 1996. Tiger simply refiled the same 
initial application for market-based rate authorization that it 
submitted five years ago. The Commission requires that an updated 
market power analysis contain current information. The submissions of 
Questar and Tiger are patently deficient and thus fail to comply with 
the clear directive in the May 31 Order. Accordingly, we revoke 
Questar's and Tiger's market-based rate authority and terminate their 
market-based rate tariffs, effective on the date of issuance of this 
order.
    8. Furthermore, any waivers and authorizations previously granted 
in connection with the market-based rate authority of the entities 
listed in Appendix A, Questar, and Tiger are no longer applicable.

Disgorgement of Profits

    9. As discussed above, the May 31 Order established a refund 
effective date in this proceeding. If any of the entities listed in 
Appendix A, Questar, or Tiger made sales pursuant to their market-based 
rate tariffs after the refund effective date established in this 
proceeding, they may be required to disgorge their profits from those 
sales. Accordingly, we direct the entities listed in Appendix A, 
Questar, and Tiger to inform the Commission within five days of the 
issuance of this order whether they have made such sales at market-
based rates during this period. For the entities that inform the 
Commission that they have not made any such sales during this period, 
the Commission will terminate the section 206 proceeding with respect 
to them and will not impose the remedy of disgorgement.
    10. For any entities that inform the Commission that they have made 
such sales or that fail to respond, we will establish hearing and 
settlement judge procedures to determine whether and in what amount 
these entities should be required to disgorge their profits from these 
sales. These entities have failed to comply with the conditions of 
their market-based rate authorizations, namely, the obligation to file 
an updated market power analysis when requested to do so by the 
Commission. Their failure to comply with this express obligation 
impeded the Commission's ability to ensure that utilities do not 
acquire market power and that rates remain just and reasonable. Under 
these circumstances, we find that disgorgement of the profits earned on 
transactions during this period is justified.
    11. While we are setting these matters for a trial-type evidentiary 
hearing, we encourage the parties to make every effort to settle their 
dispute before hearing procedures are commenced. To aid the parties in 
their settlement efforts, we will hold the hearing in abeyance and 
direct that a settlement judge be appointed, pursuant to Rule 603 of 
the Commission's Rules of Practice and Procedure.\5\ If the parties 
desire, they may, by mutual agreement, request a specific judge as the 
settlement judge in the proceeding; otherwise, the Chief Judge will 
select a judge for this purpose.\6\ The settlement judge shall report 
to the Chief Judge and the Commission within 60 days of the date of 
this order concerning the status of settlement discussions. Based on 
this report, the Chief Judge shall provide the parties with additional 
time to continue their settlement discussions or provide for 
commencement of a hearing by assigning the case to a presiding judge.
---------------------------------------------------------------------------

    \5\ 18 CFR 385.603 (2005).
    \6\ If the parties decide to request a specific judge, they must 
make their joint request to the Chief Judge by telephone at (202) 
502-8500 within five days of this order. The Commission's Web site 
contains a list of Commission judges and a summary of their 
background and experience (http://www.ferc.gov_click on Office of 

Administrative Law Judges).
---------------------------------------------------------------------------

Entities Inadvertently Included in May 31 Order

    12. The inclusion in the May 31 Order of the entities listed in 
Appendix B of this order was inadvertent, and we hereby terminate the 
section 206 proceeding with regard to them.
    The Commission orders:
    (A) The market-based rate authority of the entities listed in 
Appendix A, Questar, and Tiger is hereby revoked. The market-based rate 
tariffs of those entities are terminated effective on the date of 
issuance of this order and any waivers and authorizations previously 
granted in connection with the market-based rate authority of these 
entities are no longer applicable.
    (B) The entities listed in Appendix A, Questar, and Tiger are 
directed to inform the Commission within five days of the issuance of 
this order whether they have made any sales pursuant to their market-
based rate tariffs after the refund effective date established in this 
proceeding, as discussed above.
    (C) Pursuant to the authority contained in and subject to the 
jurisdiction conferred upon the Federal Energy Regulatory Commission by 
section 402(a) of the Department of Energy Organization Act and by the 
Federal Power Act, particularly sections 205 and 206 thereof, and 
pursuant to the Commission's Rules of Practice and Procedure and the 
regulations under the Federal Power Act (18 CFR, Chapter I), a public 
hearing shall be held in Docket No. EL05-111 to determine whether and 
in what amount the entities listed in Appendix A, Questar, and Tiger 
should be required to disgorge any profits from sales made pursuant to 
their market-based rate tariffs after the refund effective date 
established in this proceeding, as discussed in the body of this order. 
However, the hearing shall be held in abeyance to provide time for 
settlement judge procedures, as discussed in Paragraphs (D) and (E) 
below.
    (D) Pursuant to Rule 603 of the Commission's Rules of Practice and 
Procedure, 18 CFR 385.603 (2005), the Chief Administrative Law Judge is 
hereby directed to appoint a settlement judge in this proceeding within 
fifteen (15) days of the date of this order. Such settlement judge 
shall have all powers and duties enumerated in Rule 603 and shall 
convene a settlement conference as soon as practicable after the Chief 
Judge designates the settlement judge. If the parties decide to request 
a specific judge, they must make their request to the Chief Judge 
within five (5) days of the date of this order.
    (E) Within sixty (60) days of the date of this order, the 
settlement judge shall file a report with the Commission and the Chief 
Judge on the status of the settlement discussions. Based on this 
report, the Chief Judge shall provide the parties with additional time 
to continue their settlement discussions, if appropriate, or assign 
this case to a presiding judge for a trial-type

[[Page 69151]]

evidentiary hearing, if appropriate. If settlement discussions 
continue, the settlement judge shall file a report at least every sixty 
(60) days thereafter, informing the Commission and the Chief Judge of 
the parties' progress toward settlement.
    (F) If settlement judge procedures fail and a trial-type 
evidentiary hearing is to be held, a presiding judge, to be designated 
by the Chief Judge, shall, within fifteen (15) days of the date of the 
presiding judge's designation, convene a prehearing conference in these 
proceedings in a hearing room of the Commission, 888 First Street, NE., 
Washington, DC 20426. Such a conference shall be held for the purpose 
of establishing a procedural schedule. The presiding judge is 
authorized to establish procedural dates and to rule on all motions 
(except motions to dismiss) as provided in the Commission's Rules of 
Practice and Procedure.
    (G) The section 206 proceeding instituted in Docket No. EL05-111-
000 is hereby terminated with regard to the entities listed in Appendix 
B of this order.
    (H) The Secretary is directed to publish a copy of this order in 
the Federal Register.

    By the Commission.
Magalie R. Salas,
Secretary.

Appendix A

    The following market-based rate sellers have failed to submit a 
response to the Commission's May 31 Order. As discussed above, we 
revoke the following entities' authority to sell power at market-based 
rates and terminate their electric market-based rate tariffs: 3E 
Technologies, Inc., AC Power Corporation, ACN Power, Inc., AI Energy, 
Inc., A'Lones Group, Inc., Alrus Consulting, LLC, Astra Power, LLC, 
Atlantic Energy Technologies, Inc., Beacon Generating, LLC, Black River 
Power, LLC, California Polar Power Broker, L.L.C., Callaway Golf 
Company, Candela Energy Corporation, Capital Energy, Inc., Chicago 
Electric Trading, L.L.C., Cielo Power Market, L.P., Colonial Energy, 
Inc., Competisys LLC, Cumberland Power, Inc., Direct Electric Inc., 
Eclipse Energy, Inc., EGC 1999 Holding Company, L.P., Energy 
Clearinghouse Corp., Energy PM, Inc., Energy Resource Management Corp., 
Energy Transfer-Hanover Ventures, LP, EnergyOnline, Inc., ENMAR 
Corporation, Environmental Resources Trust, Inc., Exact Power Co., 
Inc., Federal Energy Sales, Inc., First Electric Cooperative 
Corporation, First Power, LLC, FMF Energy, Inc., Gelber Group, Inc., 
George Colliers, Inc., GNA Energy, LLC, Golden Valley Power Company, 
Hinson Power Company, LLC, Holt Company of Ohio, ICC Energy 
Corporation, IEP Power Marketing, LLC, INFINERGY Services, LLC, InPower 
Marketing Corporation, IPP Energy LLC, It's Electric & Gas, L.L.C., J. 
Anthony & Associates Ltd, Kaztex Energy Ventures, Inc., Kimball Power 
Company, Kloco Corporation, Lambda Energy Marketing Company, Longhorn 
Power, LP, Lumberton Power, LLC, Marquette Energy, LLC, Metro Energy 
Group, LLC, Michigan Gas Exchange, L.L.C., Mid-American Resources, 
Inc., Morrow Power, LLC, National Power Exchange Corp., National Power 
Management Company, Natural Gas Trading Corporation, Nautilus Energy 
Company, Navitas, Inc., New Millennium Energy Corp., NGTS Energy 
Services, Nine Energy Services, LLC, North American Energy 
Conservation, Inc., North Atlantic Utilities Inc., North Carolina Power 
Holdings, LLC, North Star Power Marketing, LLC, Northeast Electricity 
Inc., Northeast Empire L.P. 2, Northwest Regional Power, LLC, 
Northwestern Wind Power, LLC, Oceanside Energy, Inc., Old Mill Power 
Company, Peak Energy, Inc., Peak Power Generating Company, Power 
Dynamics, Inc., Power Management Co., LLC, Power Providers Inc., Power 
Systems Group, Inc., Powertec International, LLC, Pro-Energy 
Development LLC, Progas Power Inc., PS Energy Group, Inc., Renewable 
Energy Resources LLC, SEMCOR Energy, Symmetry Device Research, Inc., 
The Energy Group of America, Inc., Travis Energy & Environment, Inc., 
U.S. Power & Light, Inc., VIASYN, Inc., and Western Energy Marketers, 
Inc.

Appendix B

    The following market-based rate sellers were inadvertently included 
on the May 31 Order. We therefore terminate the section 206 proceeding 
instituted in Docket No. EL05-111-000 with regard to these entities: 
Commerce Energy, Inc., Desert Power, L.P., EWO Marketing, L.P., MPC 
Generating, LLC, NorthWestern Energy Marketing, L.L.C., Sunrise Power 
Company, LLC, TransAlta Centralia Generation LLC, TransAlta Energy 
Marketing (US) Inc., TransAlta Energy Marketing Corp. (US), TXU 
Electric Delivery Company, and Walton County Power, LLC.

 [FR Doc. E5-6241 Filed 11-10-05; 8:45 am]

BILLING CODE 6717-01-P
