FERC Issued a Civil Penalty of $390,000 to GenOn and a Disgorgement of $172,306 Plus Interest

Summary:

The Federal Energy Regulatory Commission (FERC) approved a stipulation and consent agreement regarding GenOn Holdings Inc.’s violations of market offering requirements in the PJM energy markets. GenOn was assessed a civil penalty of $390,000 and a disgorgement of $172,306 plus interest. Despite being alerted by PJM’s Independent Market Monitor (IMM) in July 2021, GenOn continued to offer below its ICAP Obligations for several units.​While corrections were made for most units by September 11, 2021, three units reverted to using outdated templates due to administrative oversights, with the last unit correcting its offers on March 2, 2022. The following Market Behavior Rule Violations were determined: (1) 18 C.F.R. ​ § 35.41(a): GenOn failed to operate and schedule generating facilities in compliance with Commission-approved rules and regulations and (2) 18 C.F.R. § 35.41(b): GenOn submitted inaccurate or misleading information to PJM, violating the Commission’s Market Behavior Rule on Communications.​GenOn’s actions resulted in discrepancies between its obligations and actual offers, leading to violations of the PJM Tariff, Operating Agreement, and Commission regulations.​

Additional Discussion:

Background:

1. Investigation: The Federal Energy Regulatory Commission (FERC) investigated GenOn Holdings, Inc. for potential violations of the PJM Open Access Transmission Tariff (Tariff), PJM Operating Agreement, and Commission regulations during the period of August 2021 to March 2022. ​
2. Relevant Units: The investigation focused on eight generating units owned by GenOn within the PJM footprint. ​

Violations:

1. Must Offer Requirement: GenOn failed to offer the full Installed Capacity (ICAP) equivalent of its cleared Unforced Capacity (UCAP) commitment into PJM’s energy markets, as required by the PJM Tariff and Operating Agreement. ​
2. Inaccurate Templates: The violations stemmed from GenOn’s use of outdated daily spreadsheet offer templates, which did not reflect updated capacity ratings approved by PJM. ​
3. Market Behavior Rules: GenOn’s actions violated 18 C.F.R. ​ § 35.41(a) (Unit Operation) and § 35.41(b) (Communications) by submitting inaccurate or misleading information to PJM. ​

Remedies and Sanctions:

1. Civil Penalty: GenOn agreed to pay $390,000 to the U.S. Treasury. ​
2. Disgorgement: GenOn agreed to pay $172,306, plus interest, to PJM for allocation to benefit PJM customers. ​
3. Compliance Monitoring: GenOn will submit annual compliance monitoring reports for one year, with a potential second year at Enforcement’s discretion.

Resolution:

1. Agreement Approval: FERC approved the Stipulation and Consent Agreement, concluding it is fair, equitable, and in the public interest. ​
2. Effective Date: The agreement becomes effective upon FERC’s approval without material modification. ​

Additional Notes:

1. Cooperation: GenOn fully cooperated with Enforcement during the investigation.
2. Future Obligations: GenOn is required to comply with the terms of the agreement, including timely payments and compliance reporting. ​ Failure to comply may result in additional enforcement actions. ​

Associated Files: 20250520-191FERC61144-IN25-3-000-GenOn Holdings, Inc. Settlement Agreement