Summary of NERC Penalties
Quarter 1 - January 2024
Vitol Inc. and Federico Corteggiano
Section 1c.2 of the Commission’s Regulations and Section 222a of the Federal Power Act
Selling physical power at a loss in the CAISO market to manipulate congestion and affect Vitol’s congestion revenue rights. This was established following an Order to Show Cause proceeding and a subsequent Order Assessing Civil Penalties.
On January 4, 2024, the Federal Energy Regulatory Commission (FERC) issued an Order approving a Stipulation and Consent Agreement (Agreement) between the FERC Office of Enforcement (Enforcement) and Vitol and Corteggiano (VIC). The Agreement resolves the litigation between Defendants and the Commission for violations of section 1c.2 of the Commission’s regulations and section 222a of the Federal Power Act in FERC v. Vitol Inc. and Federico Corteggiano, Case No. 2:20-CV-00040-KJM-AC (E.D. Cal.). Vitol will pay $2,225,000 in civil penalties to the United States Treasury, and Mr. Corteggiano will pay $75,000 in civil penalties to the United States Treasury, for a total payment of $2,300,000 in civil penalties. VIC is a Delaware corporation, with its principal place of business in Houston, Texas. It is a power marketer that trades wholesale electric power in the California Independent System Operator’s (“CAISO”) electric power market. Mr. Corteggiano resides in Texas and is an employee of VIC.
Following an order to Show Cause proceeding, the Commission issued an Order Assessing Civil Penalties on October 25, 2019, against Vitol, Inc., (Vitol) and Federico Corteggiano (Corteggiano), finding that Vitol and Corteggiano violated section 1c.2 of the Commission’s regulations and section 222a of the Federal Power Act (FPA) by selling physical power at a loss in the California Independent System Operator’s wholesale electric market in order to eliminate congestion that they expected to cause losses on Vitol’s congestion revenue rights. The order assessed disgorgement and civil penalties as outlined for the violations. During the Order to Show Cause proceeding, Vitol and Corteggiano elected the procedures of FPA section 31(d)(3), in which the Commission assesses a civil penalty and if it is not paid within 60 days, the Commission institutes an action in federal district court to affirm the assessment. The Commission filed suit against Vitol and Corteggiano in the Eastern District of California on January 6, 2020.
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