SunSea Penalized $5,000 for Noncompliance with NYISO’s Tariff and FERC’s Duty of Candor Rule
Summary of NERC Penalties
REGION | WHEN? | ENTITY | COMPLIANCE AREA
| VIOLATION | REASON | PENALTY AMOUNT |
|---|---|---|---|---|---|---|
NYISO | Quarter 3 - August 2024 | SunSea | FERC | NYISO Tariff Section 26.2.1.3 & FERC’s Duty of Candor Rule (18 C.F.R. § 35.41(b)) | Failure to disclose ongoing investigations by NYPSC in the CQF submission, potentially impacting financial condition, and providing misleading information. | $5,000 |
Summary:
FERC Enforcement determined that SunSea violated Section 26.2.1.3 of the credit reporting provisions of NYISO’s Tariff and the Commission’s duty of candor rule, 18 C.F.R. § 35.41(b). NYISO Tariff section 26.2.1.3 provides that, “unless prohibited by law, a Customer shall inform the ISO of the existence of any ongoing investigations of which the Customer is aware by the Securities and Exchange Commission, the Department of Justice, the Federal Energy Regulatory Commission, or the New York Public Service Commission which could have a material impact on the Customer’s financial condition.” Enforcement determined that SunSea failed to timely disclose in its March 25, 2021, CQF submission that it was under investigation by the NYPSC in multiple proceedings that could have a material impact on its financial condition. The issuance of the Revocation OSC and Revocation Order, and Denial OSC by the NYPSC make it clear that the financial impact could be material and therefore should have been disclosed. Section 35.41 (b) of the Commission’s regulations requires that a Seller, “provide accurate and factual information and not submit false or misleading information, or omit material information in any communication with [ ] Commission-approved independent system operators.” Enforcement determined that SunSea is a “Seller” subject to Section 35.41(b), and that SunSea’s failure to disclose that it was under NYPSC investigations in multiple proceedings that could have a material impact on its financial condition violated that section.
Additional Discussion:
SunSea is a privately owned competitive energy services provider, which started operating as a load serving entity in the NYISO energy and capacity markets in 2017. SunSea’s primary business is the retail marketing of gas and electric supply to residential and non-residential customers in the District of Columbia, Maryland, New York, New Jersey, and Ohio. From December 2020 to May 2021 (Relevant Period), SunSea operated as an Energy Services Company (ESCO) in New York.
Civil Penalty
SunSea agreed to pay $5,000 in a civil penalty to the United States Treasury. In recommending the appropriate remedy, FERC Enforcement considered the factors described in the Revised Policy Statement on Penalty Guidelines, including the fact that SunSea cooperated with FERC Enforcement during the investigation.
Associated Files:
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