Contract analysis

I. PREAMBLE AND PARTIES This Stipulation and Consent Agreement ("Agreement") is entered into by and between the following parties:

1. Commission Staff. The Staff of the Office of Enforcement ("Enforcement Staff" or "Staff") of the Federal Energy Regulatory Commission ("Commission" or "FERC"), located at 888 First Street NE, Washington, D.C. 20426.

2. Respondent Dunmore Energy Holdings Ltd. ("DEH"), an exempted company incorporated under the laws of the Cayman Islands, with its registered office at 4th Floor, Harbour Place, 103 South Church Street, George Town, Grand Cayman, KY1-1002, Cayman Islands, and its principal U.S. office at 2200 Post Oak Boulevard, Suite 3100, Houston, TX 77056. Employer Identification Number: 98-1347562.

3. Respondent Dunmore Power Trading LLC ("DPT"), a Delaware limited liability company, with its principal office at 2200 Post Oak Boulevard, Suite 3100, Houston, TX 77056. DPT's registered agent is Capitol Registered Agents Inc., 1209 Orange Street, Wilmington, DE 19801. Employer Identification Number: 82-4519763. DEH and DPT are collectively referred to herein as "Respondents" or "Dunmore." Enforcement Staff and Res

II. RECITALS A. Background on Respondents DEH is a privately held, vertically integrated energy holding company with diversified operations spanning upstream oil and gas production, midstream pipeline assets, and a portfolio of wind and solar generation facilities located across the U.S. Midwest and Gulf Coast regions. DEH's consolidated revenue for fiscal year 2022 was approximately $3.82 billion, with earnings befo

Section 222 of the Federal Power Act ("FPA"), 16 U.S.C. § 824v, prohibits the use or employment of any manipulative or deceptive device or contrivance in connection with the purchase or sale of electric energy or the purchase or sale of transmission services subject to the jurisdiction of the Commission. The Commission promulgated 18 C.F.R. § 1c.2 to implement Section 222 of the FPA. That regulation prohibits any ent

Section 316A of the FPA, 16 U.S.C. § 825o-1, authorizes the Commission to assess civil penalties for violations of Part II of the FPA, or any rule or order thereunder, in an amount the Commission determines to be appropriate, subject to certain procedural requirements. The Commission's regulations at 18 C.F.R. Part 1b govern non-public investigations conducted by the Office of Enforcement, including the issuance of s

1. Uneconomic Day-Ahead Bidding. Staff alleged that DPT's Senior Trader Kyle Renfro submitted Day-Ahead energy offers for Dunmore's gas-fired generation units at prices significantly below the estimated marginal cost of production — at levels as low as negative fifteen dollars per megawatt-hour (-$15/MWh) to negative forty dollars per megawatt-hour (-$40/MWh) — at the Indiana Hub pricing node. Staff alleged that thes

2. Cross-Product Manipulation. Staff alleged that DPT Trader Anastasia Petrov took Real-Time virtual positions — consisting of Increment Offers ("INCs") and Decrement Bids ("DECs") — at the Minnesota Hub pricing node. Staff alleged that these virtual transactions were designed to amplify the congestion differential created by the uneconomic Day-Ahead bids submitted at the Indiana Hub, thereby magnifying the profitabi

3. Physical-Financial Coordination. Staff further alleged that DPT coordinated the timing and volume of natural gas nominations submitted through DMP's pipeline infrastructure to support the uneconomic generation offers at the Indiana Hub. Staff alleged that this coordination between gas nominations and electricity market offers served to mask the true marginal cost of Dunmore's gas-fired generation units, thereby co

III. TERMS AND CONDITIONS NOW, THEREFORE, in consideration of the mutual covenants and agreements 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

1. Amount. Respondents shall pay a civil penalty in the aggregate amount of Four Million Seven Hundred Fifty Thousand Dollars ($4,750,000) to the United States Treasury. This civil penalty is being assessed pursuant to Section 316A of the FPA, 16 U.S.C. § 825o-1, and represents the total monetary penalty imposed under this Agreement. DEH and DPT shall be jointly and severally liable for payment of the civil penalty.

2. Payment Schedule. The civil penalty shall be payable in two (2) equal installments as follows: (a) First Installment. Two Million Three Hundred Seventy-Five Thousand Dollars ($2,375,000) shall be due and payable within thirty (30) calendar days of the date of the Commission order approving this Agreement. Based on the anticipated Commission order date of February 9, 2024, the first installment shall be due no late

3. Payment Method. All payments required under this Section III.A shall be made by wire transfer or electronic funds transfer to the United States Treasury in accordance with payment instructions to be provided by the Commission's Office of the Secretary. Respondents shall provide written confirmation of each payment to the Director of the Office of Enforcement within five (5) business days of the date on which each

4. Late Payment. In the event that any payment required under this Section III.A is not received by the United States Treasury by the applicable due date, interest shall accrue on the unpaid balance from the due date at the rate established by the Secretary of the Treasury pursuant to 26 U.S.C. § 6621(a)(2), compounded daily. The accrual of interest under this provision shall be in addition to, and shall not limit, a

1. General Obligation. Respondents shall implement and maintain the Enhanced Compliance Plan attached hereto as Appendix A (the "Compliance Plan") for a period of thirty-six (36) months commencing on the date of the Commission order approving this Agreement (the "Compliance Monitoring Period"). Based on the anticipated Commission order date of February 9, 2024, the Compliance Monitoring Period shall terminate on Febr

2. Key Elements of the Compliance Plan. The Compliance Plan, the full terms of which are set forth in Appendix A, includes the following key elements: (a) Chief Compliance Officer. Jennifer Caulfield shall continue to serve as Chief Compliance Officer of DEH, reporting directly to the Board of Directors of DEH. The CCO shall have authority over all compliance matters related to DPT's wholesale electricity trading act

3. Modification of Compliance Plan. Any material modification to the Compliance Plan during the Compliance Monitoring Period shall require the prior written approval of the Director, Office of Enforcement. A request for modification shall be submitted in writing to the Director and shall describe the proposed modification, the reasons therefor, and the anticipated impact on the effectiveness of the Compliance Plan. T

2. Duration. The cooperation commitment set forth in this Section III.E shall remain in effect for the duration of the Compliance Monitoring Period and for an additional twelve (12) months following the expiration of the Compliance Monitoring Period — that is, through February 9, 2028, based on the anticipated Commission order date of February 9, 2024. F. Waivers. 1. Respondents' Waivers. Respondents hereby waive the

2. Staff's Reservation. Nothing in this Agreement shall preclude Enforcement Staff from investigating or bringing enforcement actions against Respondents for conduct not specifically covered by this Agreement, including but not limited to conduct occurring after the Relevant Period. This Agreement resolves only those matters arising from the investigation in Docket No. IN23-7-000 that are described in the Recitals he

1. Authority. Each Party represents and warrants that it has full power and authority to enter into this Agreement and to perform its obligations hereunder. Martin Llewellyn, General Counsel of DEH, represents and warrants that he is duly authorized to execute this Agreement on behalf of both DEH and DPT, and that all necessary corporate and organizational approvals have been obtained. Christine Pham, Senior Attorney

2. No Other Agreements. The Parties represent and warrant that there are no other agreements, understandings, promises, or arrangements between them relating to the subject matter of this Agreement other than those expressly set forth herein or in the appendices attached hereto. No oral representations or inducements have been made to any Party that are not contained in this Agreement.

3. Voluntary Agreement. Respondents represent and warrant that they are entering into this Agreement voluntarily, with full knowledge of its terms and consequences, and upon the advice of their legal counsel, Calderwood & Harkness LLP. Respondents acknowledge that they have had a full and fair opportunity to negotiate the terms of this Agreement and that the terms set forth herein represent a fair and reasonable reso

1. Notice of Breach. In the event that Staff believes that Respondents have breached any term or condition of this Agreement, including any provision of the Compliance Plan set forth in Appendix A, Staff shall provide written notice to Respondents specifying the nature of the alleged breach in reasonable detail. Written notice shall be sent to Respondents' counsel of record, Catherine Bloom, Calderwood & Harkness LLP

2. Consequences of Breach. If Respondents fail to cure an alleged breach within the thirty (30) day cure period, or fail to demonstrate to Staff's reasonable satisfaction that no breach has occurred, Staff may seek such additional remedies as are available under the FPA and the Commission's regulations. Such remedies may include, but are not limited to: (a) assessment of additional civil penalties pursuant to Section

I. Binding Effect and Successors This Agreement shall be binding upon and inure to the benefit of the Parties and their respective successors and assigns. In the event of any corporate restructuring, merger, acquisition, change of control, or other transaction affecting the organizational structure or ownership of DEH or DPT, the obligations imposed under this Agreement — including the civil penalty obligations, the

IV. SUBMISSION TO THE COMMISSION The Parties respectfully request that the Commission issue an order approving this Stipulation and Consent Agreement in its entirety, without modification or condition. The Parties represent to the Commission that this Agreement represents a fair, reasonable, and appropriate resolution of the matters investigated in Docket No. IN23-7-000. The Parties agree that this Agreement is in th

V. SIGNATURES IN WITNESS WHEREOF, the Parties have executed this Stipulation and Consent Agreement as of the date first written above. For Enforcement Staff: OFFICE OF ENFORCEMENT 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: January 31

1. Purpose and Scope Purpose. The purpose of this Compliance Plan is to ensure DPT's compliance with Section 222 of the Federal Power Act ("FPA"), 16 U.S.C. § 824v, the Commission's anti-manipulation regulation at 18 C.F.R. § 1c.2, MISO market rules, and all other applicable Commission regulations governing wholesale electricity trading. This Compliance Plan is designed to establish and maintain a robust compliance i

2. Chief Compliance Officer Jennifer Caulfield shall serve as Chief Compliance Officer ("CCO") of DEH throughout the Compliance Monitoring Period. The CCO shall report directly to the Board of Directors of DEH and shall have independent authority to investigate potential compliance issues, recommend disciplinary action against any employee or officer of DEH, DPT, or DMP, and implement remedial measures as she deems n

3. Compliance Training All DPT trading personnel — currently consisting of fourteen (14) traders, including any future hires or replacements during the Compliance Monitoring Period — shall complete a minimum of sixteen (16) hours of compliance training per calendar year during the Compliance Monitoring Period. The compliance training program shall cover the following subject areas: (a) The anti-manipulation provision

4. Independent Compliance Monitor Ridgeway Compliance Solutions LLC ("Ridgeway"), whose principal is Dr. Carolyn Whitford, Founder and Managing Director, located at 3000 Richmond Avenue, Suite 800, Houston, TX 77098, shall serve as the independent compliance monitor for the purposes of this Compliance Plan. The independent compliance monitor shall conduct quarterly compliance audits of DPT's trading operations. Each

5. Automated Trade Surveillance Systems Respondents shall design, procure, and implement automated trade surveillance systems ("Surveillance Systems") capable of detecting: (a) Bidding patterns that are inconsistent with economic fundamentals, including Day-Ahead generation offers that are priced below estimated marginal cost by a threshold amount to be determined by the CCO in consultation with the independent compl

6. Policies and Procedures Respondents shall develop and maintain comprehensive written policies and procedures governing the following areas: (a) Day-Ahead and Real-Time Bidding for Generation Assets. Policies shall establish guidelines for the formulation of generation offers, including requirements for documentation of marginal cost calculations, opportunity cost analyses, and the basis for any offers priced below

7. Quarterly Reporting to FERC OE Respondents shall submit quarterly compliance reports to the Director, Division of Investigations, Office of Enforcement, within thirty (30) days after the end of each calendar quarter during the thirty-six (36) month Compliance Monitoring Period. The first quarterly report shall cover the period from the effective date of this Agreement through March 31, 2024, and shall be due no la

8. Annual Compliance Certification No later than sixty (60) days after the end of each calendar year during the Compliance Monitoring Period, DEH's Chief Executive Officer, Gavin Harcourt, and the Chief Compliance Officer, Jennifer Caulfield, shall each provide a separate written certification to the Director, Office of Enforcement, attesting to the following: (a) That Respondents have complied in all material respec

9. Recordkeeping. All records related to compliance activities, training, audits, trade surveillance alerts, communications with the Office of Enforcement, independent monitor reports, policies and procedures, and any other records generated pursuant to this Compliance Plan shall be maintained by Respondents for a period of not less than five (5) years from the date of creation. Records shall be maintained in a manne

10. Supervision of Trading Personnel Derek Sung, Senior Vice President, Power Marketing & Trading, shall implement enhanced supervisory protocols for the MISO trading desk during the Compliance Monitoring Period. The enhanced supervisory protocols shall include, at a minimum, the following measures: (a) Pre-Trade Review for Below-Cost Offers. A pre-trade review procedure shall be established requiring supervisory rev

11. Compliance Monitoring Period The Compliance Monitoring Period shall commence on the date of the Commission order approving the Stipulation and Consent Agreement, which is anticipated to be February 9, 2024, and shall terminate thirty-six (36) months thereafter on February 9, 2027. Upon expiration of the Compliance Monitoring Period, Respondents' obligations under this Compliance Plan shall terminate, provided tha