FERC Waives Penalties for Prior Late Meter Data Submissions in CAISO, Declines to Revise Penalty Rules

May 20, 2011
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FERC granted the California ISO's request to waive the imposition of penalties, for the period starting from the November 1, 2009 trade date through the February 1, 2011 trade date, on scheduling coordinators that submitted amended meter data between 43 calendar days and 61 business days from the trade date.

The Commission declined, however, to grant the relief requested by the Alliance for Retail Energy Markets, which had said that the CAISO's new submission timeline imposes penalties for even de minimis modifications.

CAISO's accelerated payment initiative changed the submission deadline for such meter data, and CAISO believes that the tariff was unclear enough concerning the deadline to waive such penalties.

Under the new deadline, CAISO requires that scheduling coordinators submit complete and accurate meter data no later than 43 calendar days from the trade date, the deadline for the submission of meter data for the first Recalculation Settlement Statement. CAISO treats the submission of new or amended meter data later than 43 calendar days after the trade date as a failure to submit complete and accurate meter data, which is subject to penalties under the tariff.

This new process is significantly different from the process that was in place prior to the payment acceleration initiative. Previously, as long as a market participant submitted accurate meter data in time for the Recalculation Settlement Statement, and before CAISO had to produce a special settlement statement to correct the error, the scheduling coordinator was not subject to penalty.

Absent a waiver, CAISO calculated that penalties for the late submission of meter data under the new timeline amounted to $1.29 million.

FERC granted the waiver, and also directed CAISO to clarify its tariff to avoid any further confusion in the future, specifically ordering CAISO to revise the tariff to reflect that amended meter data submitted later than 43 calendar days after the trading date will be subject to penalties.

AReM had noted that CAISO's tariff provisions imposing penalties for even de minimis changes submitted after 43 calendar days from the trade date are against the longstanding practices of investor-owned utilities, who are the predominant meter data management agents in the California market for almost all market participants. AReM explained that, in practice, these utilities regularly update meter usage data after the regular meter read date without regard to the settlement deadlines prescribed by the CAISO tariff and business practice manuals.

AReM argued that it is unjustified that this commonly accepted practice is treated as a violation of the rules of conduct and made subject to penalties. Moreover, AReM noted that scheduling coordinators have no prior knowledge of existing meter reading errors in the data submitted by the meter data management agents.

AReM further protested that the CAISO tariff has no materiality threshold for the meter data penalties.

FERC declined to grant AReM's request relief.

The matter was docketed as EL11-41 and ER11-2819.

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