AES Corporation Received $2.97 Million Penalty in Disgorgement to CAISO and a Civil Penalty of $3.03 Million in Violation of 18 C.F.R., § 35.41(b), and § 35.41(a)

FERC Violation Determinations

• FERC enforcement determined that AES violated CAISO Tariff section 4.6.4, Identification of Generating Units, which requires that, “All information provided to the CAISO regarding the operational and technical constraints in the Master File shall be accurate and actually based on physical characteristics of the resources. . . .” Enforcement determined that this violation consisted of the Resources’ failure to reach their Master File Pmax value, which demonstrates that the Master File Pmax values were not “accurate or actually based on the physical characteristics of the resources.”
• Enforcement determined that AES violated CAISO Tariff section 37.3.1.1, Expected Conduct, which states, “Market Participants must submit Bids for Energy, RUC Capacity and Ancillary Services and Submissions to Self-Provide an Ancillary Service from resources that are reasonably expected to be available and capable of performing at the levels specified in the Bid, and to remain available and capable of so performing based on all information that is known to the Market Participant or should have been known to the Market Participant at the time of submission.” 
• Enforcement determined that this violation consisted of AES regularly bidding a Resource’s full Master File Pmax into the CAISO day-ahead and real-time energy markets and being financially compensated for RA capacity even though the Resources could not “reasonably be expected to be available and capable of performing at the levels specified in the Bid, and to remain available and capable of so performing.”
• Enforcement determined that AES violated 18 C.F.R. § 35.41(b), Communications, which provides that, “A Seller must provide accurate and factual information and not submit false or misleading information, or omit material information, in any communication with the Commission, Commission-approved market monitors, Commission-approved regional transmission organizations, Commission-approved independent system operators, or jurisdictional transmission providers, unless Seller exercises due diligence to prevent such occurrences.” Enforcement determined that this violation consisted of AES’s submission of Master File Pmax values to CAISO that were not accurate and its failure to exercise due diligence to ensure that the submitted Pmax values reflected the actual physical capacity of the Resources.  
• Enforcement determined that AES violated 18 C.F.R. § 35.41(a), Unit Operation, which states that, “Where a Seller participates in a Commission-approved organized market, Seller must operate and schedule generating facilities, undertake maintenance, declare outages, and commit or otherwise bid supply in a manner that complies with the Commission-approved rules and regulations of the applicable market.” 
• Enforcement determined that this violation consisted of AES’s registration of inaccurate Master File Pmax values, bidding up to the Resources’ Master File Pmax value in CAISO’s energy markets, and selling capacity through RA contracts that the Resources could not reasonably provide in violation of the CAISO Tariff.