FERC has determined that certain market participants were not to
blame for unintended electricity flows around Lake Erie.
Concluding a yearlong, nonpublic investigation in response to
requests from the New York Independent System Operator (NYISO)
Market Monitoring and Performance Department, that arose amid
significant political outcry, the Federal Energy Regulatory
Commission (FERC) adopted and released the findings of the Office
of Enforcement (OE) Staff Report (OE Report), which determined that
certain market participants were not to blame for unintended
physical electricity flows around Lake Erie (loop flows) from
January to July 22, 2008, alleged to have resulted in additional
uplift costs to the wholesale electricity market in New York.
Rather, FERC concluded that a series of market design and
operational decisions by system operators culminated in pricing
incentives, which encouraged market participants to undertake
economically rational conduct. FERC found
