AICPA SOC Service Organizations - Certrec

Smart One Incurs $5,000 Fine for NYISO Tariff Violation

Summary of NERC Penalties








Federal Energy Regulatory Commission (FERC)

Quarter 2 - February 2024

Smart One

NYISO's Tariff Regulations

Section of the NYISO Tariff

Smart One failed to report significant financial downturns after losing key retail natural gas customers, leading to a 60% drop in net sales, a 27% decrease in assets, and an 80% reduction in cash from 2019 to 2020. Net income plummeted by 80% between 2019 and 2020. This failure, as evidenced by substantial declines in revenue following penalties by MPSC and VSCC, constituted a breach of Section of the NYISO Tariff.



FERC Enforcement determined that Smart One violated Section of the credit reporting provisions of NYISO’s Tariff (Material Change in Financial Status). Section provides: A Customer shall inform the ISO of any material change in its financial status within five (5) business days, including but not limited to: (a) a downgrade of a long- or short-term debt rating by any ISO-approved rating agency; (b) placement on a negative credit watch by any ISO approved rating agency; (c) a bankruptcy filing, insolvency, or a default under any financing agreement; (d) resignation or termination of a key officer; (e) initiation of a lawsuit that could materially and adversely impact current or future financial performance; or (f) restatement of prior financial statements.

Additional Discussion:

FERC Enforcement determined that Smart One’s financial statements indicate that after losing its retail natural gas customers in Maryland and Virginia, Smart One’s net sales decreased approximately 60 percent, assets decreased approximately 27 percent, and cash decreased by approximately 80 percent from 2019 to 2020. Smart One’s net income also declined by 80 percent between 2019 and 2020. Thus, Enforcement concluded that Smart One violated Section by failing to timely report this material change in its financial condition as evidenced by the significant decline in its net revenue following the sanctions imposed by MPSC and VSCC.

Smart One is a competitive energy services provider which commenced service in 2009, operating in New York as aretail marketer of electricity and natural gas, with retail gas supply comprising its core operations and the largest component of its business. During calendar years 2020 and 2021, Smart One greatly reduced its retail clientele in New York and subsequently exited New York’s electricity markets in August 202

Associated Files: 20240312-186FERC61181-IN23-13-000-Smart One Energy LLC-Settlement Agreement_0

About Certrec:
Certrec is a leading provider of regulatory compliance solutions for the energy industry with the mission of helping ensure a stable, reliable, bulk electric supply. Since 1988, Certrec’s SaaS applications and consulting expertise have helped hundreds of power-generating facilities manage their regulatory compliance and reduce their risks.

Certrec’s engineers and business teams bring a cumulative 1,500 years of working experience in regulatory areas of compliance, engineering, and operations, including nuclear, fossil, solar, wind facilities, and other Registered Entities generation and transmission.

Certrec has helped more than 200 generating facilities establish and maintain NERC Compliance Programs. We manage the entire NERC compliance program for 80+ registered entities in the US, Canada, and Mexico that trust us to decrease their regulatory and reputational risk. Certrec is ISO/IEC 27001:2013 certified and has successfully completed annual SOC 2 Type 2 examinations.

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