Original Source: RTO Insider By Rory D. Sweeney
GreenHat Energy’s default is one of the largest in RTO’s financial transmission rights (FTR) markets.
The investigation comes amid pressure from PJM members for answers regarding the June default, with losses expected to exceed $100 million.
The default highlighted flaws in the FTR market that allowed GreenHat traders, who had already been linked to a 2013 energy-market scandal, to amass the largest-ever portfolio of positions — 890 million MWh — on $600,000 in collateral.
East Kentucky Power Cooperative’s Chuck Dugan, the committee’s chair, detailed members’ concerns in an Oct. 10 letter to PJM CEO Andy Ott. Dugan said several questions about the default were raised at the meeting and members are “pleased” the board agreed to the investigation.
The letter outlines six questions members have about PJM’s awareness, responsiveness and transparency regarding GreenHat’s portfolio, including why staff, after apparently learning about the potential default in February 2017, failed to inform members and instead proposed modifications to the RTO’s credit policy for members’ endorsement as if they were unprovoked.