Dive Brief:
- FERC staff alleged an independent power producer in Canada engaged in three separate schemes from 2010 to 2013 aimed at misrepresenting the output of its generation and the cost of its fuel into the ISO-NE market, RTO Insider reports.
- The Nov. 3 notice names Calgary-based Maxim Power Corp., CEO John Bobenic , and Director of Corporate Development Kyle Mitton in the investigation.
- According to staff, the company fraudulently took in millions by misrepresenting its fuel costs, gaming market rules and obtaining inflated capacity payments.
Dive Insight:
According to FERC enforcement staff, from 2010 to 2013 Maxim Power engaged in a series of schemes that violated market rules and bilked ISO-New England out of millions.
Staff alleges that during 2012-13, Maxim gamed an ISO-New England market rule intended to mitigate the market power of generators needed for reliability. "Through this scheme, Maxim received millions of dollars in make-whole payments," the Notice of Alleged Violations said.
In July and August of 2010, Maxim submitted offers to the ISO based on high oil prices because, it said, it could not procure enough natural gas. The company then collected make-whole payments based on those high prices, "but in fact burned much less expensive gas. In many cases Maxim had already purchased gas when it submitted Day Ahead offers based on oil prices because of supposed gas supply issues," staff said.
In the third scheme, executed from 2010 through 2013, staff alleges Maxim obtained inflated capacity payments from ISO-NE by artificially raising the reported output of three of its plants. "Maxim did this by employing extraordinary measures during capacity tests that it did not use, and did not intend to use, during the ordinary operation of the plants," staff said.
According to RTO Insider, earlier this year Maxim revealed FERC had accused the company of $23 million in improper gains, and the company said it had given back about $3 million. The company did not comment on FERC's notice of investigation.
