Progress refund will settle power information violation
By LOUIS HAU
Published May 26, 2005
The Federal Energy Regulatory Commission said Wednesday that Progress Energy Inc. will refund $6.5-million to its customers to settle violations of rules aimed at ensuring open access to information about wholesale power trading.
In a statement, FERC said a recent audit had found the Raleigh, N.C., parent of Progress Energy Florida of St. Petersburg had violated rules restricting communications between a utility's regulated and unregulated wholesale power operations.
FERC, the federal agency that regulates the transmission of electricity between states, oil and natural gas, requires that such operations remain as independent of each other as possible to ensure the open and nondiscriminatory sale of wholesale electricity across transmission lines, according to FERC spokesman Bryan Lee.
The FERC audit found that Progress' regulated and unregulated power trading operations had reported to the same executive, a structure that has since been changed. The audit also found instances of regularly scheduled meetings and conference calls involving transmission and unregulated wholesale power personnel.
While the contacts didn't appear to involve any inappropriate exchange of information, auditors said they created opportunities to do so and recommended that Progress find other means of transferring such information.
Internal deliberations over Progress' recent corporate restructuring included inappropriate contact among personnel in the company's regulated and unregulated operations, the audit said. The audit also found that the company had filed as many as eight different versions of its codes of conduct for employees, contributing to a "lack of uniformity."
Progress has agreed to refund its retail customers in Florida and the Carolinas a total of $5.4-million. Wholesale customers, such as municipal utilities and other power resellers, will be refunded $1-million. Progress also will return $100,000 to customers to reflect the value of power brokering services provided at no cost to a Progress affiliate. Progress spokesman Garrick Francis said the affiliate paid for the services but acknowledged the amount paid was $100,000 less than it should have been.
Progress hasn't determined when the refunds will appear on customer bills or what portion of the refund will be passed on to customers in Florida, Francis said.
[Last modified May 26, 2005, 01:17:14]
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