FERC Pursues Unique Remedies for MidAmerican's Open-Access Transgressions

Not only did FERC affirm its staff's findings that in recent years MidAmerican Energy Co. persistently had violated core provisions of its open-access transmission tariff, but in a September 29 order FERC pursued unique remedies against MidAmerican "• remedies that underscore the premium that FERC places on improvements to the transmission grid.  The violations were documented in an audit, from January 1, 2002, through April 30, 2004, of MidAmerican's compliance with its open-access transmission tariff provisions relating to interconnection and transmission services, Standards of Conduct, OASIS system, and the electronic posting requirements of Order No. 2004.

In its audit, FERC staff found three major open-access fouls: (1) MidAmerican permitted its wholesale merchant function to use network transmission service to import power to make possible off-system (i.e., non-network) sales;  (2) MidAmerican provided transmission services to its wholesale merchant function that were not clearly available to unaffiliated entities; and (3) MidAmerican did not require its wholesale merchant function to comply with certain tariff provisions concerning the designation of network resources.  In contrition, MidAmerican acceded to FERC's demand that it build $9.2 million in unplanned transmission system upgrades and accelerate $14.7 million in planned transmission improvements.  [MidAmerican Energy Company, 112 FERC ¶ 61,346 (2005)]