On Nov. 29, 2023, the California ISO filed a petition with the Federal Energy Regulatory Commission (FERC) requesting approval to distribute penalties collected for a violation of the ISO Rules of Conduct in calendar year 2020. The petition is available on the ISO website.
Section 37.9.4 of the ISO tariff requires that the ISO place all proceeds of penalties collected under section 37.9 into a trust account. After the end of the year, the ISO must allocate those proceeds, together with interest, to scheduling coordinators for eligible market participants. Eligible market participants are those that were not assessed a financial penalty under section 37 during the relevant calendar year.
The funds at issue in the November 29 filing were from a violation that was appealed to FERC. FERC rejected that appeal in an order issued on Nov. 3, 2023. With the appeal rejected, the ISO can now distributed the funds to eligible market participants.
In distributing the funds, the ISO pays eligible market participants based on the product of: (a) the amount in the trust account, including interest; and (b) the ratio of grid management charge payments by the scheduling coordinator on behalf of eligible market participants to the total of such amounts paid by all scheduling coordinators. The payment cannot be more than the amount of grid management charge paid by the scheduling coordinator on behalf of all eligible market participants that it represents. In this case, the ISO proposed the distribution based on grid management charge payments in 2020.
Subsequent to the disposition, the scheduling coordinator is responsible for distributing the amounts to the eligible market participants in proportion to their share of the grid management charge paid by the scheduling coordinator on their behalf.
The ISO will distribute these funds once it receives approval from FERC.
