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Abuse of 'Native Load' Preference and Improper Conduct Proves Costly as IDACORP Companies Settle with FERC

The Federal Energy Regulatory Commission (FERC) has reached a consent agreement with three IDACORP entities: IDACORP Inc. (IDACORP), Idaho Power Co. (Idaho Power) and IDACORP Energy L.P. (IDACORP Energy). At issue was Idaho Power's improper use of the "native load" priority for transmission service by its affiliate, IDACORP Energy, for electricity imports.

IDACORP is the holding company of Idaho Power, a public utility and transmission provider, and IDACORP Energy, Idaho Power's power marketing affiliate. FERC's order, along with the Stipulation and Consent Agreement, held that:

• Idaho Power improperly favored its wholesale merchant affiliate, IDACORP Energy, in the way Idaho Power provided access to its transmission system. It accepted the representation on numerous occasions that certain requests for non-firm transmission were necessary to serve Idaho Power's "native load" obligations when, in fact, they were not. That access gave IDACORP Energy "a priority over competing power marketers that also requested non-firm transmission service."


• Idaho Power violated its standards of conduct on file with FERC by allowing affiliate employees unduly preferential access to non-public transmission information by:
  
  
  
  • Allowing employees involved in wholesale merchant activities unescorted access after regular business hours to Idaho Power's transmission control area and computer access to transmission-specific information, including the flow of electricity over Idaho Power's system;
    
  • Allowing wholesale merchant and transmission employees to discuss transmission and integrated resource planning issues on a preferential basis;
    
  • Failing to post on its OASIS site all personnel transfers between affiliates;
    
    
  • Allowing transmission employees, after being prompted by calls from merchant traders, to convey decisions regarding transmission requests over the telephone, which is a non-public forum.
  
  
• Idaho Power failed to invoice IDACORP Energy for services provided for 10 months under an ancillary services contract. The firm also failed to charge IDACORP Energy for certain transmission service on Idaho Power's system for a period in 2001. "These failures meant that Idaho Power forewent revenues to benefit its marketing affiliate," FERC's order said.

The consent agreement provided for payments of $203,318 to entities that were "harmed by Idaho Power's incorrect use of, and its acquiescence to the incorrect use of, native load priority to access its transmission system."

IDACORP Energy also is required to transfer to Idaho Power net revenues totaling $5,820,456 derived from contracts that were not filed with or authorized by FERC, in violation of sections 205 and 203 of the Federal Power Act; along with payments in the amount of $118,200 for additional violations of Section 203.


Finally, Idaho Power has to hire a compliance officer to deter future violations and retain an independent firm to audit compliance with its standards of conduct.

Contact: Doug Austin