FERC Rejects State Plan for Power Fines

U.S. regulators rejected a proposal by the operator of California’s electricity grid that would have allowed it to fine companies $110,000 a day for instances of power-market manipulation.

The Federal Energy Regulatory Commission said in an order that the proposed fines weren’t “just and reasonable.” The city of Santa Clara, Calif., had argued that the proposal would have allowed fines to grow as high as $95 million a day for “unproven allegations of harm.”

The fines were also opposed by power generators and marketers in the state, including units of Reliant Resources Inc., Mirant Corp., Dynegy Inc. and Williams Cos.

The system operator had argued that the fines were needed to prevent a repeat of the energy crisis of 2000-01.