On October 18, 2013, the Federal Energy Regulatory Commission (“Commission”) approved a Stipulation and Consent Agreement between the Office of Enforcement (“Enforcement”) and Exelon Corporation (“Exelon”) to resolve an investigation of Constellation Energy Commodities Group, Inc. (“CECG”), which Exelon acquired in March 2012.  Exelon agreed to pay a civil penalty of $500,000, to disgorge $145,928 in unjust profits, plus interest, and to submit compliance reports to Enforcement through at least April 2015. 

CECG purchased and sold energy in the western and California Independent System Operator (“CAISO”) markets with market-based rate authority.  From January 22, 2010 through March 24, 2010 (“Relevant Period”), CECG’s trading team looked for CAISO intertie balancing authority areas where price spreads were large enough to cover the transmission costs and attendant charges and fees. CECG designated its bids as Wheeling Through so that if CAISO awarded CECG’s bid, it would award both intertie bids—at the import point and the export point—and CECG would then capture the price spread between them.  If CAISO awarded CECG’s bids, CECG would then schedule transmission outside of CAISO from the CAISO export point back to the import point, forming a circular schedule.  CECG profited from the Wheeling Through transactions because it was awarded the bid only when the price at the import point (sale) was greater than the price at the export point (purchase) and because it bid a spread great enough to cover its costs. CECG bid this circular scheduling strategy every day and nearly every hour during the Relevant Period.  During the investigation, Exelon twice incorrectly asserted to Enforcement that CAISO supported closing the investigation without penalty. Because Exelon failed to ensure that these assertions to Enforcement staff were accurate, it received no cooperation credit in arriving at a penalty.