Dive Brief:
- Illinois Attorney General Lisa Madigan and consumer advocate Public Citizen have asked federal regulators to halt a rate increase they believe is tied to Dynegy Inc.'s manipulation of power auctions in the Midcontinent ISO, the St. Louis Post-Dispatch reports.
- According to Public Citizen, the generating company may have intentionally withheld several power plants from the auction or bid them at uncompetitive prices, helping raise power prices by as much as 800%.
- The consumer watchdog group said federal regulators responded almost immediately to the allegations, with FERC giving interested parties until June 17 to comment.
Dive Insight:
When the results of a MISO auction — intended to procure supply through 2016 for much of Illinois — were revealed in April, Public Citizen said it appeared as though Dynegy had manipulated the market and pushed auction prices up from $16.75 per megawatt-day last year to $150 this year.
The group filed a complaint with FERC, noting that even if the auction was above board the dramatic price spike would also be a violation of the Federal Power Act’s requirement that rates be just and reasonable. Illinois AG Lisa Madigan's office filed a similar complaint, the Post-Dispatch reported.
The paper spoke with Tyson Slocum, director of Public Citizen’s energy program, who said Dynegy increased its ability to manipulate markets when it bought Ameren’s Illinois coal facilities in late 2013, in a deal which boosted the generator's market share in lower Illinois.
“It gave them significant control over capacity, which enabled them to withhold capacity from the auction, which allowed for the significant price increase,” Slocum told the newspaper.
Dynegy responded in a statement, saying the company "offered all of its megawatts into the MISO auction with no physical or economic withholding in accordance with MISO tariffs and as approved by the Independent Market Monitor."
The company "follows and respects all the rules, tariffs, and obligations in the markets," the Houston-based company said.
