FERC Denies Request For Refund On Polar Vortex Costs

On October 15, 2015, FERC denied Champion Energy Marketing LLC's ("CEM") request for a $3.1 million refund of balancing operating reserve ("BOR") costs assessed by PJM Interconnection, LLC and PJM Settlement, Inc. (collectively "PJM") related to the polar vortex of January 2014.  In the order denying CEM's request, FERC held that "PJM's actions that caused real-time BOR costs in January 2014 benefited all real-time load, including [CEM], by ensuring the continued operation and reliability of the system."

The proceeding commenced in February 2015 when CEM filed a complaint against PJM related to the actions PJM took to address system reliability issues caused by the January 2014 polar vortex.  CEM explained that it had hedged 98.75 percent of its load through forward contracts for that month, and it was even long on physical power on some days relative to cleared day-ahead load.  CEM was nevertheless assessed approximately $3.8 million total in real-time BOR deviation