Rumford Paper settles for $3M in FERC case
Rumford Paper Co. will pay more than $3 million to settle allegations from federal energy regulators that the company profited from manipulating a regional program aimed at reducing peak demand on the electricity grid.
The Bangor Daily News reported Rumford Paper, owned by the bankrupt Ohio-based NewPage Corp., signed a consent agreement Friday agreeing to a $10 million fine and over $3 million in payments to the Federal Energy Regulatory Commission. Because the company declared bankruptcy in 2011, FERC agreed to settle for slightly more than $3 million, the paper reported.
Rumford is the first of three Maine-based companies and one individual facing similar allegations — and millions in fines — to reach a resolution.
In the Rumford settlement, the company does not deny the allegations nor admit guilt in response to FERC's claim that it fraudulently manipulated ISO-New England's Day-Ahead Load Response Program. The program pays large industrial power users for lowering consumption at times of high demand as an alternative to expanding transmission infrastructure.
The other parties facing similar allegations — Lincoln Paper & Tissue, the Portland-based energy consulting firm Competitive Energy Services and that firm's managing partner, Richard Silkman — told the paper they have not yet reached agreements with FERC. Regulators are seeking a civil penalty of $1.25 million from Silkman and a $7.5 million penalty for his company, which FERC says improperly advised the Rumford mill on how to participate in the Day-Ahead Load Response Program.
From Lincoln Paper & Tissue, regulators are seeking a civil penalty of $4.4 million for alleged misuse of the program.
Both Silkman's representative and a Lincoln mill spokesman told the paper they expect the matter to go to court.
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