The Federal Energy Regulatory Commission has issued a final order that assesses multimillion dollar penalties against Competitive Energy Services of Portland and one of its principals, Richard Silkman, based on allegations of energy market manipulation.

Following a 60-day period, the agency could go to federal court to enforce the fines.

But a spokesman for Silkman and the company said on Wednesday that FERC’s order simply affirms the agency’s allegation, and sets the stage for the company to defend itself in federal court sometime next year.

“We have not yet had a fair hearing and we still have had no opportunity to cross-examine witnesses or review FERC evidence,” said Dustin Brooks.

The agency’s order, issued Aug. 29, fined Competitive Energy Services $7.5 million and Silkman $1.25 million.

At issue is a former program run by New England’s electric grid operator, in which factories and big businesses were paid to reduce electricity use during periods of high demand. The program’s design was found to be flawed and has been terminated by the commission.

FERC charged that Silkman and the energy services company advised Rumford Paper Co. to reduce its internal power generation and buy energy for a five-day period, to set an “artificially high” baseline for its power needs. That benefited the paper mill when it was called on to reduce consumption, during a six-month period in 2007 and 2008.

Rumford Paper settled with FERC in March for $3 million. It neither admitted nor denied liability in a consent agreement with the agency.

Brooks said Rumford Paper settled the matter as part of bankruptcy negotiations. The mill’s parent company, NewPage Corp., emerged from bankruptcy protection last December.

Brooks added that Competitive Energy Services fully complied with all of FERC’s rules and regulations and blamed the faulty design of the power-saving program. He also noted that the program was being used in the same manner by dozens of other businesses in New England. The company has been unable to introduce evidence to back up its position, he said, and is looking forward to that opportunity in court.

Tux Turkel can be contacted at 791-6462 or

[email protected]


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