Contract analysis

I. CAPTION AND INTRODUCTORY PARAGRAPH UNITED STATES OF AMERICA BEFORE THE FEDERAL ENERGY REGULATORY COMMISSION In the Matter of Dunmore Energy Holdings Ltd. and Dunmore Power Trading LLC Docket No. IN23-7-000 STIPULATION AND CONSENT AGREEMENT The Staff of the Office of Enforcement of the Federal Energy Regulatory Commission ("Commission Staff" or "FERC Staff"), Dunmore Energy Holdings Ltd. ("DEH"), an exempted compan

II. RECITALS WHEREAS, the following recitals set forth the background facts and circumstances relevant to this Agreement: A. Background of the Investigation

1. DPT holds market-based rate authority from the Commission, granted under Docket No. ER05-1128-000, pursuant to which DPT has been authorized to sell electric energy, capacity, and ancillary services at market-based rates, and has been an active participant in the wholesale electricity markets administered by the Midcontinent Independent System Operator, Inc. ("MISO") since approximately 2006.

2. On or about April 3, 2023, Velthorn Market Analytics, Inc., serving as the Independent Market Monitor ("IMM") for MISO, submitted a referral letter to the Commission's Office of Enforcement identifying certain bidding patterns by DPT in MISO's Day-Ahead and Real-Time energy markets. The IMM referral described anomalous trading patterns observed at certain pricing nodes and raised questions regarding the economic r

3. Following receipt of the IMM referral, on May 22, 2023, the Commission's Office of Enforcement issued a preliminary inquiry letter to Dunmore Energy Holdings Ltd. requesting information and documents relating to DPT's trading activity in the MISO markets during the period identified in the IMM referral.

4. On June 12, 2023, the Commission's Office of Enforcement issued a formal non-public order of investigation in this docket, Docket No. IN23-7-000, pursuant to 18 C.F.R. Part 1b, authorizing Commission Staff to investigate whether DPT's trading activity in the MISO Day-Ahead and Real-Time energy markets during the period at issue may have violated Section 222 of the Federal Power Act, 16 U.S.C. § 824v, and the Commi

5. FERC Staff has alleged that during the period from January 3, 2022 through March 17, 2023 (the "Relevant Period"), DPT engaged in trading activity in the MISO Day-Ahead and Real-Time energy markets at the Indiana Hub and Minnesota Hub pricing nodes that may have constituted a violation of Section 222 of the Federal Power Act, 16 U.S.C. § 824v, and the Commission's Anti-Manipulation Rule, 18 C.F.R. § 1c.2.

6. Specifically, FERC Staff has alleged that DPT engaged in the following three categories of conduct during the Relevant Period: (a) Uneconomic Day-Ahead Generation Offers at Indiana Hub. FERC Staff has alleged that DPT submitted Day-Ahead offers for gas-fired generation units at the Indiana Hub at prices significantly below marginal cost, including offers at price levels as low as negative fifteen dollars per megaw

7. FERC Staff has estimated that DPT's trading activity during the Relevant Period that is the subject of the allegations described in Section II.B above included: (a) Total Day-Ahead generation offers at issue of approximately 2,840 gigawatt-hours (GWh) over the Relevant Period; (b) FTR positions with a notional value of approximately Forty-Seven Million Three Hundred Thousand Dollars ($47,300,000); and (c) Virtual

8. Respondents cooperated fully and in good faith with the Commission's Office of Enforcement throughout the investigation, including: (a) Production of approximately one hundred eighty-seven thousand (187,000) documents, comprising approximately 1.24 million pages, collected from eleven (11) custodians within Respondents' organizations; (b) Making six (6) employees available for investigative testimony under 18 C.F.

9. Respondents retained outside counsel, Calderwood & Harkness LLP, to assist in responding to the investigation, and through outside counsel, maintained regular and constructive communications with Commission Staff throughout the pendency of the investigation. Respondents provided timely responses to all data requests and did not seek to delay or obstruct the investigative process. E. Respondents' Remedial Measures

10. DEH appointed Jennifer Caulfield as Chief Compliance Officer on February 6, 2023, prior to the commencement of the investigation in this docket. Ms. Caulfield reports directly to the Board of Directors of DEH and has been vested with authority and resources to oversee Respondents' compliance with the Federal Power Act, the Commission's regulations, and applicable market rules.

11. In connection with the investigation and the settlement negotiations described herein, Respondents retained Ridgeway Compliance Solutions LLC, an independent compliance consulting firm, to serve as an independent compliance consultant and monitor with respect to Respondents' wholesale electricity trading operations. Ridgeway Compliance Solutions LLC, under the direction of Dr. Carolyn Whitford, Founder and Managi

12. Respondents have committed to the adoption and implementation of the Enhanced Compliance Plan attached as Appendix A hereto, which sets forth comprehensive compliance measures designed to prevent, detect, and deter potential violations of the Federal Power Act and the Commission's regulations. F. Settlement Negotiations

13. Following the issuance of FERC Staff's Preliminary Findings letter on October 2, 2023, and Respondents' Response to Preliminary Findings submitted on November 6, 2023, the Parties engaged in settlement negotiations with the goal of reaching a consensual resolution of the matters under investigation in this docket.

14. The Parties conducted settlement conferences on December 5, 2023, January 8, 2024, and January 24, 2024, and exchanged written settlement proposals and counterproposals during the period from November 2023 through January 2024.

15. The Parties have reached an agreement on the terms and conditions set forth herein in the interest of resolving this matter efficiently and without the need for further administrative proceedings, including without the need for a hearing before an Administrative Law Judge, the assessment of additional civil penalties by the Commission, or further litigation of the matters at issue. The Parties believe that the te

16. Respondents neither admit nor deny the allegations, findings, or conclusions described in this Agreement or in FERC Staff's Preliminary Findings letter dated October 2, 2023, or in any other document or communication issued by Commission Staff in connection with the investigation in Docket No. IN23-7-000. Respondents enter into this Agreement solely for the purpose of resolving the matters addressed herein, and t

17. This Agreement shall not be used as the basis for any finding of violation of the Federal Power Act or the Commission's regulations in any other proceeding, except in a proceeding to enforce the terms of this Agreement. Respondents consent to the use of this Agreement solely for purposes of assessing compliance with its terms and conditions and for any proceeding in which the Commission or Commission Staff seeks

III. TERMS AND CONDITIONS NOW, THEREFORE, in consideration of the foregoing recitals and the mutual agreements, representations, and commitments set forth herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows: A. Civil Penalty A.1. Penalty Amount.

18. Respondents shall pay a civil penalty in the total amount of Four Million Seven Hundred Fifty Thousand Dollars ($4,750,000.00) to the United States Treasury, pursuant to Section 316A of the Federal Power Act, 16 U.S.C. § 825o-1. DEH and DPT shall be jointly and severally liable for the payment of the full amount of the civil penalty. > [MARGINAL NOTE — C. Bloom, 1/26/2024]: Confirm payment is to the U.S. Treasury

19. The civil penalty shall be paid in two (2) equal installments as follows: (a) The first installment of Two Million Three Hundred Seventy-Five Thousand Dollars ($2,375,000.00) shall be due and payable within thirty (30) calendar days of the Effective Date (as defined in Section I above). (b) The second installment of Two Million Three Hundred Seventy-Five Thousand Dollars ($2,375,000.00) shall be due and payable w

20. Payment of each installment shall be made by electronic wire transfer to the United States Treasury in accordance with the wire transfer instructions to be provided by Commission Staff. Respondents shall provide written confirmation of each payment to Commission Staff within five (5) business days of each wire transfer. > [MARGINAL NOTE — H. Brinkley, 1/26/2024]: Based on the anticipated FERC order date of approx

21. In the event that Respondents fail to make timely payment of any installment of the civil penalty as required by Section III.A.2, interest shall accrue on the outstanding balance from the due date until the date of payment at the rate established by the Internal Revenue Service for the underpayment of federal income taxes under 26 U.S.C. § 6621(a)(2), as in effect on the date that payment was due. The accrual of

22. Nothing in this Agreement constitutes a representation by any Party regarding the tax deductibility of the civil penalty or any portion thereof. Respondents are solely responsible for determining the tax treatment of the civil penalty in consultation with their own tax advisors and accountants. > [MARGINAL NOTE — H. Brinkley, 1/26/2024]: Flag for Martin Llewellyn (Dunmore General Counsel) — coordinate with Presco

23. No disgorgement of profits or revenues shall be required of Respondents under this Agreement.

24. In consideration of the totality of the circumstances, including Respondents' full and timely cooperation with the investigation, the remedial measures undertaken by Respondents as described in Section II.E above, and the uncertainty inherent in quantifying any unjust profits that may have resulted from the trading activity at issue, FERC Staff has agreed that no disgorgement is warranted in connection with this

25. Respondents shall adopt and implement the Enhanced Compliance Plan attached hereto as Appendix A (the "Compliance Plan") within the timeframes specified therein. The Compliance Plan shall become effective on the Effective Date and shall remain in effect for a period of thirty-six (36) months from the Effective Date (the "Compliance Monitoring Period"), ending approximately February 9, 2027, based on the anticipat

26. Respondents shall devote such financial, personnel, and organizational resources as are reasonably necessary to ensure full and timely implementation of, and compliance with, the Compliance Plan throughout the Compliance Monitoring Period. C.2. Key Elements of the Compliance Plan.

27. The Compliance Plan, the full text of which is set forth in Appendix A, includes the following key elements, which are summarized here for convenience and are subject in all respects to the detailed provisions of Appendix A: (a) Chief Compliance Officer. Jennifer Caulfield shall serve as Respondents' Chief Compliance Officer ("CCO") for the duration of the Compliance Monitoring Period. The CCO shall report direct

28. Respondents may seek modification of the Compliance Plan upon written request submitted to Commission Staff describing the proposed modification and the reasons therefor. Any modification of the Compliance Plan shall be subject to the prior written approval of Commission Staff, which approval shall not be unreasonably withheld, conditioned, or delayed. In the event that Commission Staff does not respond to a writ

29. Respondents neither admit nor deny the allegations, findings, or conclusions described in this Agreement or in FERC Staff's Preliminary Findings letter dated October 2, 2023, or in any other document, communication, or submission by Commission Staff in connection with the investigation in Docket No. IN23-7-000. Nothing in this Agreement shall be construed as an admission of any violation of the Federal Power Act,

30. Respondents consent to the Commission's use of this Agreement and the findings and recitals herein solely for purposes of this proceeding, Docket No. IN23-7-000, and any proceeding to enforce the terms of this Agreement. This Agreement shall not be used against Respondents as the basis for any finding of violation, or as evidence of any admission or acknowledgment of wrongdoing, in any other proceeding before the

31. The Parties acknowledge that this Agreement is entered into for the sole purpose of resolving the matters described herein and is not intended to, and shall not, establish any precedent or standard applicable to any other proceeding, investigation, or enforcement action. > [MARGINAL NOTE — C. Bloom, 1/26/2024]: Reiterate — this is the single most important protective provision for the Respondents. I have strength

32. Respondents agree to continue cooperating with the Commission's Office of Enforcement in connection with any related investigations or proceedings arising from the same facts and circumstances as those investigated in Docket No. IN23-7-000. Such cooperation shall include, upon reasonable request by Commission Staff and upon reasonable notice: (a) Making current employees available for interviews and investigative

33. The cooperation obligations set forth in this Section III.E shall continue for the duration of the Compliance Monitoring Period. Nothing in this Section shall be construed to require Respondents to waive any applicable privilege, including the attorney-client privilege and the work product doctrine, or to produce materials protected by such privileges. > [MARGINAL NOTE — H. Brinkley, 1/26/2024]: I have limited th

34. Respondents waive their right to a hearing before an Administrative Law Judge on the matters addressed in this Agreement, including any hearing that might otherwise be available under Section 31(d) of the Federal Power Act, 16 U.S.C. § 823b(d), or under the Commission's Rules of Practice and Procedure.

35. Respondents waive their right to seek rehearing of any Commission order approving this Agreement that is consistent with the terms set forth herein, pursuant to Section 313(a) of the Federal Power Act, 16 U.S.C. § 825l(a). Respondents further waive their right to seek judicial review of any such order in any federal court of appeals or any other court. F.2. Staff Waivers.

36. In consideration of Respondents' agreement to the terms and conditions set forth in this Agreement, FERC Staff waives the right to pursue any further civil penalty claims, disgorgement claims, or other enforcement actions against Respondents arising from or relating to the conduct described in this Agreement during the Relevant Period (January 3, 2022 through March 17, 2023). This waiver extends to DEH, DPT, and

37. This Agreement resolves all claims by FERC Staff against Respondents arising from or relating to the conduct described in this Agreement during the Relevant Period. Upon the Effective Date, the non-public investigation in Docket No. IN23-7-000 shall be closed with respect to the Respondents named herein, subject to the terms and conditions of this Agreement, including the Compliance Monitoring Period and the coop

38. This Agreement does not resolve, and shall not be construed to resolve or preclude, any claims, actions, or proceedings that may be brought by any other federal or state regulatory agency, any law enforcement authority, any Regional Transmission Organization or Independent System Operator, or any private party arising from or relating to the conduct described herein or any other conduct by Respondents. Nothing in

39. This Agreement shall be binding upon Respondents and their respective successors, assigns, and transferees. In the event of any corporate reorganization, merger, acquisition, change of control, or similar transaction involving DEH or DPT (a "Change of Control"), Respondents shall provide written notice to Commission Staff at least thirty (30) calendar days prior to the effective date of such transaction. For purp

40. Any successor, assign, or transferee of Respondents shall be bound by the terms and conditions of this Agreement to the same extent as Respondents, and Respondents shall ensure that the terms of this Agreement are incorporated into any transaction or agreement effecting a Change of Control. > [MARGINAL NOTE — H. Brinkley, 1/26/2024]: Confirm this is acceptable to Pendleton Capital Partners (27% equity holder in D

41. In the event that Commission Staff reasonably determines that Respondents have breached any material term or condition of this Agreement, including any provision of the Compliance Plan, Commission Staff shall provide Respondents with written notice specifying the nature of the alleged breach in reasonable detail (a "Breach Notice").

42. Respondents shall have thirty (30) calendar days from receipt of a Breach Notice to cure the alleged breach to the reasonable satisfaction of Commission Staff (the "Cure Period"). Minor or inadvertent deviations from the Compliance Plan that are promptly identified and corrected by Respondents shall not constitute a material breach of this Agreement.

43. If Respondents fail to cure the alleged breach within the Cure Period, or if the breach is not reasonably susceptible to cure, Commission Staff may, in its discretion: (a) Seek to enforce the terms of this Agreement before the Commission; (b) Seek additional civil penalties from the Commission for the breach of this Agreement; and/or (c) Petition the Commission to reopen the investigation in Docket No. IN23-7-000

44. Nothing in this Section III.I shall limit or restrict any other rights or remedies available to Commission Staff under the Federal Power Act, the Commission's regulations, or applicable law. > [MARGINAL NOTE — C. Bloom, 1/26/2024]: I have added the cure period (paragraph 42) and the "minor or inadvertent deviations" carve-out. These are important protections — without the cure period, a technical compliance hiccu

45. The terms of this Agreement, once approved by the Commission, shall be public and shall be published in accordance with the Commission's customary practice for consent agreements and stipulations approved by Commission order.

46. The underlying investigative record, including all documents produced by Respondents during the investigation, transcripts of investigative testimony, Commission Staff's work papers and analysis, and all communications between the Parties during the investigation and settlement negotiations, shall remain non-public and confidential and shall be subject to the protections of 18 C.F.R. § 1b.9 and any other applicab

47. This Agreement shall be governed by and construed in accordance with federal law, including the Federal Power Act, 16 U.S.C. §§ 791a et seq., and the regulations of the Commission promulgated thereunder. L. Entire Agreement

48. This Agreement, together with Appendix A (Enhanced Compliance Plan), which is attached hereto and incorporated herein by reference, constitutes the entire agreement between the Parties with respect to the subject matter hereof and supersedes all prior and contemporaneous agreements, understandings, negotiations, and discussions, whether oral or written, between the Parties relating to the subject matter hereof.

49. No amendment, modification, or waiver of any provision of this Agreement shall be effective unless set forth in a writing signed by all Parties or their duly authorized representatives. M. Counterparts.

50. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original, and all of which together shall constitute one and the same instrument. Facsimile and electronic signatures, including signatures transmitted in Portable Document Format (PDF) by electronic mail, shall be deemed original signatures for all purposes.

IV. SIGNATURE BLOCKS IN WITNESS WHEREOF, the Parties have executed this Stipulation and Consent Agreement as of the dates set forth below. FOR THE STAFF OF THE OFFICE OF ENFORCEMENT OF THE FEDERAL ENERGY REGULATORY COMMISSION: By: ________ Name: Christine Pham Title: Senior Attorney, Division of Investigations Office of Enforcement Federal Energy Regulatory Commission 888 First Street NE Washington, D.C. 20426 Date:

V. APPENDIX A — ENHANCED COMPLIANCE PLAN Cross-Reference and Summary Appendix A to this Stipulation and Consent Agreement is the Enhanced Compliance Plan, which is a separate document prepared in coordination with Ridgeway Compliance Solutions LLC and is incorporated by reference into this Agreement. The Enhanced Compliance Plan is attached hereto and made a part hereof for all purposes. The Enhanced Compliance Plan

VI. C&H INTERNAL ANNOTATIONS AND REVIEW NOTES [INTERNAL — NOT FOR DISTRIBUTION TO FERC STAFF] > [OVERALL ASSESSMENT — Catherine Bloom, Partner, Calderwood & Harkness LLP, 1/26/2024]: > > This draft reflects the terms agreed on January 24, 2024: > > - Civil penalty: $4.75 million (paid in two installments) > - Disgorgement: waived entirely > - Compliance plan: 36-month Enhanced Compliance Plan with independent monitor