APPENDIX A
ENHANCED COMPLIANCE PLAN
Referenced in the Stipulation and Consent Agreement Dated January 31, 2024
Docket No. IN23-7-000
Dunmore Energy Holdings Ltd. and Dunmore Power Trading LLC
and
Staff of the Office of Enforcement of the Federal Energy Regulatory Commission
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PREAMBLE AND INTRODUCTORY PROVISIONS
This Enhanced Compliance Plan ("Plan" or "ECP") constitutes Appendix A to the Stipulation and Consent Agreement executed on January 31, 2024, by and between Dunmore Energy Holdings Ltd. ("DEH"), a Cayman Islands exempted company, and Dunmore Power Trading LLC ("DPT"), a Delaware limited liability company (collectively, "Dunmore" or "Respondents"), on the one hand, and the Staff of the Office of Enforcement of the Federal Energy Regulatory Commission ("Commission Staff" or "FERC Staff"), on the other hand, in connection with Docket No. IN23-7-000.
This Plan is adopted pursuant to Section V of the Stipulation and Consent Agreement executed January 31, 2024, and approved by the Commission by order dated February 9, 2024. The Plan is designed to ensure that DEH, DPT, and their respective officers, directors, employees, consultants, agents, and any persons acting on their behalf comply with the anti-manipulation provisions of Section 222 of the Federal Power Act, 16 U.S.C. § 824v, the Commission's Anti-Manipulation Rule, 18 C.F.R. § 1c.2, and all applicable Commission regulations, orders, and market rules governing wholesale electricity trading in organized markets, including the Midcontinent Independent System Operator ("MISO") and Southwest Power Pool ("SPP") markets. The Plan reflects Dunmore's commitment to preventing, detecting, and remediating any conduct that could constitute market manipulation or otherwise violate applicable federal energy regulatory requirements.
This Plan supersedes Dunmore's prior compliance policies and procedures related to wholesale electricity market trading, including the Dunmore Power Trading LLC Compliance Manual dated March 2019 and all amendments thereto, to the extent such prior policies and procedures are inconsistent with the terms of this Plan. This Plan is effective as of the date of the Commission order approving the Stipulation and Consent Agreement, which is February 9, 2024.
Definitions. As used in this Enhanced Compliance Plan, the following terms shall have the meanings set forth below:
"ATSS" or "Automated Trade Surveillance System" means the automated monitoring system described in Section IV of this Plan.
"Board" means the Board of Directors of Dunmore Energy Holdings Ltd.
"CCO" means the Chief Compliance Officer designated under Section I of this Plan.
"Commission" or "FERC" means the Federal Energy Regulatory Commission.
"Compliance Monitoring Period" means the thirty-six (36) month period commencing on February 9, 2024 and ending on February 9, 2027.
"DMP" means Dunmore Midstream Partners LP, EIN 47-8831205, a limited partnership organized under the laws of the State of Delaware and an affiliate of Dunmore Energy Holdings Ltd.
"FERC OE" means the Office of Enforcement of the Federal Energy Regulatory Commission.
"FTR" means Financial Transmission Rights, as defined and administered by MISO and SPP in their respective tariffs.
"ICM" or "Independent Compliance Monitor" means Ridgeway Compliance Solutions LLC, or any successor entity approved by FERC OE in accordance with this Plan.
"Market-Based Rate Authorization" means DPT's authorization to sell electric energy, capacity, and ancillary services at market-based rates, granted by the Commission under Docket No. ER05-1128-000, and as amended from time to time.
"MISO" means the Midcontinent Independent System Operator, Inc.
"Plan" or "ECP" means this Enhanced Compliance Plan.
"Relevant Personnel" means all officers, directors, employees, consultants, and agents of DEH or DPT who are involved in, or who supervise persons involved in, the purchase or sale of wholesale electricity, capacity, or ancillary services, or Financial Transmission Rights, or the scheduling, nomination, or delivery of natural gas used in the generation of electricity for wholesale sale. This definition includes, without limitation, personnel of Dunmore Midstream Partners LP whose duties relate to gas scheduling, nominations, or delivery affecting wholesale electricity generation or trading by DPT.
"SPP" means the Southwest Power Pool, Inc.
"Trading Personnel" means all employees of DPT assigned to or working on any physical or virtual trading desk, including but not limited to Day-Ahead and Real-Time energy traders, FTR traders, and their direct supervisors. For purposes of this Plan, Trading Personnel are a subset of Relevant Personnel.
Scope of the Plan
This Plan applies to all wholesale electricity market activities conducted by DEH, DPT, or any subsidiary, affiliate, or agent acting on their behalf, including but not limited to Dunmore Midstream Partners LP to the extent that DMP's activities relate to gas scheduling, nominations, or delivery affecting wholesale electricity generation or trading. The Plan encompasses the full range of Dunmore's participation in organized wholesale electricity markets, including:
(a) All trading in MISO and SPP organized wholesale electricity markets, including Day-Ahead and Real-Time energy markets, virtual transaction markets (Increment Offers and Decrement Bids), and FTR markets;
(b) All physical generation bidding and offer activity at MISO and SPP pricing nodes where DPT owns, operates, or controls generation resources;
(c) All virtual trading activity, including Increment Offers and Decrement Bids submitted at any pricing node in MISO or SPP;
(d) All FTR acquisition, management, and trading activity in MISO and SPP FTR markets;
(e) All gas scheduling, nomination, and delivery activities conducted by DMP or any other affiliated entity that affect the supply of natural gas to DPT's gas-fired generation units; and
(f) Coordination between physical generation bidding, virtual trading, FTR positions, and gas nominations — i.e., cross-product transaction review designed to detect and prevent manipulative schemes that exploit the interaction among these products and activities.
The scope of this Plan is intentionally broad and shall be construed to effectuate the Plan's purpose of ensuring comprehensive compliance with all applicable FERC regulations, orders, and market rules governing wholesale electricity market participation.
SECTION I — CHIEF COMPLIANCE OFFICER
1.1 Designation. Dunmore hereby designates Jennifer Caulfield as Chief Compliance Officer. Ms. Caulfield was hired on February 6, 2023, and has served in compliance and regulatory functions within the energy sector for over fourteen years. The CCO shall report directly to the Board of Directors of DEH and shall not report to any business unit or revenue-generating function of DEH, DPT, or any affiliate. The CCO shall have a direct, unimpeded reporting line to the Board and shall have the right to appear before the Board or any committee thereof at any regularly scheduled or special meeting, without prior approval from any member of management.
1.2 Independence and Authority
The CCO shall be independent of the power marketing, trading, and business development functions of DPT and DEH. In furtherance of this independence, the following requirements shall apply:
(a) The CCO shall not report to or be supervised by the Senior Vice President, Power Marketing & Trading (currently Derek Sung), or any other officer or employee whose primary responsibilities include revenue generation from wholesale electricity trading, capacity sales, FTR trading, or any related commercial activity.
(b) The CCO shall have full and unrestricted authority to access all trading records, communications (including emails, instant messages, text messages, and recorded telephone conversations), trade capture and execution systems, risk management systems, gas scheduling systems, and any other data or systems of DPT and any affiliated entity relevant to compliance monitoring, without prior approval from any business unit, trader, officer, or other personnel.
(c) The CCO shall have authority to suspend or restrict any trading activity pending investigation of a potential compliance violation. Such suspension or restriction may be implemented immediately upon the CCO's determination that continued trading activity poses a material risk of a violation of applicable FERC regulations, market rules, or this Plan. The CCO shall promptly notify the Board and the relevant trading desk supervisor of any such suspension or restriction.
(d) The CCO's compensation, performance evaluation, and continued employment shall be determined by the Board of Directors of DEH (or a committee thereof designated for that purpose, such as the Compensation Committee or the Audit and Compliance Committee), and shall not be contingent on, or materially influenced by, the financial performance of any trading desk, business unit, or revenue-generating function.
(e) The CCO shall not hold any financial interest, bonus participation, or profit-sharing arrangement tied to the trading profits or revenues of DPT or any affiliated trading entity.
1.3 Responsibilities. The CCO shall have overall oversight and administration of this Enhanced Compliance Plan. Without limiting the generality of the foregoing, the CCO's responsibilities shall include:
(a) Overall management, coordination, and administration of all elements of this Plan, including the development and maintenance of internal policies and procedures implementing the Plan's requirements;
(b) Supervision of all compliance training programs under Section II, including curriculum development, scheduling, delivery oversight, and documentation;
(c) Coordination with the Independent Compliance Monitor (Ridgeway Compliance Solutions LLC) under Section III, including facilitating the ICM's access to records, systems, and personnel, and reviewing and responding to ICM audit reports and recommendations;
(d) Oversight of the Automated Trade Surveillance System under Section IV, including monitoring the system's operational status, reviewing alert dispositions, and ensuring that the system is functioning in accordance with the Plan's requirements;
(e) Preparation and submission of quarterly reports to FERC OE under Section V, including compilation of all required information and certification of report accuracy;
(f) Preparation and co-execution of annual compliance certifications under Section VI;
(g) Maintenance and enforcement of all policies and procedures under Section VII, including trading desk oversight policies, FTR position monitoring policies, cross-product transaction review procedures, gas nomination coordination policies, and whistleblower and internal reporting mechanisms;
(h) Prompt reporting to the Board and, as required, to FERC OE of any identified or suspected violations of FERC regulations, market rules, or this Plan;
(i) Oversight of compliance investigations, including determining the scope of investigations, directing investigative activities, and ensuring timely resolution and documentation of findings; and
(j) Liaison with FERC OE and other regulatory bodies on compliance matters related to this Plan.
1.4 Removal or Replacement
The CCO may not be removed, replaced, terminated, or reassigned to duties that would materially diminish the CCO's compliance oversight responsibilities without thirty (30) days' prior written notice to FERC OE. Such notice shall include a statement of reasons for the proposed removal or replacement and shall identify any proposed successor CCO. Any successor CCO must have qualifications, experience, and independence comparable to those of the initial CCO, Jennifer Caulfield. FERC OE shall have fifteen (15) business days from receipt of the notice to object to a proposed successor CCO. If FERC OE objects, Dunmore shall not appoint the proposed successor and shall engage in good faith consultations with FERC OE to identify an acceptable alternative.
1.5 Resources. Dunmore shall provide the CCO with adequate staff, budget, and technological resources to fulfill the responsibilities described in this Plan. The CCO shall have authority to engage external counsel, consultants, or experts as reasonably necessary to carry out the CCO's duties under this Plan, subject to Board budget approval. The Board shall not unreasonably withhold or delay approval of the CCO's budget requests. The CCO shall have dedicated compliance staff reporting directly to the CCO, and such staff shall not be subject to direction or supervision by Trading Personnel or the SVP, Power Marketing & Trading.
SECTION II — ANNUAL COMPLIANCE TRAINING
2.1 Requirement. All Trading Personnel shall complete a minimum of sixteen (16) hours per year of compliance training during the Compliance Monitoring Period. This training requirement applies to every calendar year (or portion thereof) during the Compliance Monitoring Period, beginning with calendar year 2024. For any partial calendar year (such as the period from February 9, 2024 through December 31, 2024, and the period from January 1, 2027 through February 9, 2027), the sixteen-hour requirement shall be prorated based on the number of full months within the Compliance Monitoring Period that fall in such partial calendar year, provided that in no event shall the training requirement for any partial year be less than eight (8) hours.
All Relevant Personnel who are not Trading Personnel but whose duties involve supervision of, or interaction with, Trading Personnel in connection with wholesale electricity market activities shall complete a minimum of eight (8) hours per year of compliance training during the Compliance Monitoring Period. The same proration principles shall apply to partial calendar years for this category of personnel.
2.2 Training Content — Core Curriculum
The compliance training program shall include a core curriculum covering the following subjects:
(a) Section 222 of the Federal Power Act and the Anti-Manipulation Rule. Comprehensive instruction on 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), including the elements of market manipulation (fraudulent or deceptive conduct, in connection with a jurisdictional transaction, with the requisite scienter), categories of prohibited conduct, the scienter requirement and how it is evaluated, and the distinction between legitimate trading strategies and manipulative schemes.
(b) FERC Penalty Guidelines. An overview of the Commission's Penalty Guidelines, including the methodology for calculating civil penalties, the role of base penalty amounts, aggravating factors (such as obstruction, prior violations, and organizational size), and mitigating factors (such as cooperation, compliance programs, and self-reporting).
(c) MISO and SPP Tariff Provisions. Detailed instruction on the tariff provisions of MISO and SPP governing Day-Ahead and Real-Time market bidding, virtual transactions (Increment Offers and Decrement Bids), and FTR markets, including applicable bidding rules, offer caps and floors, must-offer requirements, and market participant obligations.
(d) Cross-Product Manipulation Risks. Analysis of the risks of manipulation arising from coordination between physical generation offers, virtual positions, FTR portfolios, and gas nominations. This module shall address the economic and legal framework for evaluating cross-product manipulation, including how seemingly legitimate individual transactions can, when combined, form a manipulative scheme.
(e) Case Studies. Examination of case studies drawn from FERC enforcement actions, including, without identifying the instant matter by name, scenarios involving uneconomic bidding designed to affect locational marginal prices, creation of artificial congestion at specific pricing nodes, cross-product manipulation schemes involving coordinated physical and financial positions, and schemes involving gas nomination manipulation to support uneconomic generation offers.
(f) Reporting Obligations. Instruction on how to identify and report potential compliance violations internally through Dunmore's compliance hotline and reporting mechanisms, as well as the obligation to cooperate with FERC investigations and the protections available to whistleblowers.
2.3 Training Content — Specialized Modules
In addition to the core curriculum, the following specialized training modules shall be provided to the designated categories of personnel:
(a) Day-Ahead Trading Desk Personnel. Economic versus uneconomic bidding analysis, including methodologies for determining marginal cost and evaluating whether a generation offer is economically justified. This module shall also address marginal cost determination for various fuel types and generation technologies, the role of opportunity costs and contractual obligations in bidding decisions, and legitimate portfolio optimization strategies that may involve offers priced below short-run marginal cost.
(b) Real-Time Trading Desk Personnel. Virtual transaction compliance, including the regulatory framework for Increment Offers and Decrement Bids, the relationship between Day-Ahead and Real-Time positions, permissible hedging strategies involving virtual transactions, and the risks associated with virtual trading patterns that may be construed as manipulative.
(c) FTR Trading Personnel. FTR acquisition and hedging policies, monitoring FTR positions for potential conflicts with physical or virtual trading activity, the regulatory framework for FTR markets, and the specific risks associated with acquiring FTR positions at pricing nodes where the trader's physical or virtual trading activity could affect FTR values.
(d) Gas Scheduling and Midstream Coordination Personnel. Compliance with gas nomination practices, including the applicable pipeline tariff requirements, the prohibition on coordination of gas nominations to support uneconomic generation offers, the documentation requirements for gas nominations, and the obligation to ensure that gas scheduling decisions are based on legitimate operational and commercial considerations.
(e) Supervisors (including SVP, Power Marketing & Trading). Supervisory responsibilities under the Federal Power Act and FERC regulations, failure-to-supervise liability, escalation protocols for potential compliance issues identified by Trading Personnel, and the supervisor's role in establishing and maintaining a culture of compliance within the trading organization.
2.4 Training Format and Delivery
Training may be delivered through a combination of live in-person sessions, live webinar or virtual sessions, and recorded instructional modules, provided that at least eight (8) hours per year of training for Trading Personnel are delivered live (in-person or virtual) with interactive question-and-answer sessions that allow participants to engage with the trainer and discuss real-world compliance scenarios.
The initial training session for all current Trading Personnel shall be completed within ninety (90) days of the effective date of this Plan, i.e., by May 10, 2024. Any new Trading Personnel hired or assigned to a trading desk after the effective date of this Plan must complete the full core curriculum training within thirty (30) days of commencing trading activities. No new Trading Personnel shall be permitted to engage in unsupervised trading activity until the initial core curriculum training has been completed and a passing assessment score has been achieved.
2.5 Training Administration
The CCO shall be responsible for scheduling, administering, and documenting all compliance training required under this Section II. Training curricula shall be developed in consultation with the Independent Compliance Monitor, Ridgeway Compliance Solutions LLC (Dr. Carolyn Whitford, Founder and Managing Director), and shall be approved by the CCO prior to delivery. The CCO shall maintain comprehensive records of all training sessions, including:
(a) The date and time of each training session;
(b) The duration of each training session;
(c) A list of all attendees, with signatures or electronic attestations confirming attendance;
(d) The identity and qualifications of the trainer(s) delivering each session;
(e) Copies of all training materials used, including presentations, handouts, case studies, and reference materials; and
(f) Results of any assessments administered in connection with the training session.
Training records shall be retained for a minimum of five (5) years from the date of the training session and shall be made available to FERC OE upon request.
2.6 Training Assessment
Each training session shall include a written or electronic assessment (in the form of a quiz, examination, or practical exercise) designed to confirm participant comprehension of the subject matter covered. Assessments shall be tailored to the specific training module and shall test the participant's understanding of applicable regulations, prohibited conduct, reporting obligations, and practical compliance scenarios.
Trading Personnel who fail to achieve a passing score of seventy percent (70%) or higher on any training assessment shall be required to complete remedial training within fifteen (15) business days. Remedial training shall be targeted to the subject areas in which the participant demonstrated insufficient comprehension. Participants who fail to achieve a passing score on the remedial assessment shall be referred to the CCO for further action, which may include additional training, temporary suspension from trading activities, or other appropriate measures.
Results of all assessments, including initial and remedial assessment scores, shall be documented and maintained by the CCO as part of the training records described in Section 2.5.
SECTION III — QUARTERLY COMPLIANCE AUDITS BY INDEPENDENT COMPLIANCE MONITOR
3.1 Designation of Independent Compliance Monitor
Dunmore has engaged Ridgeway Compliance Solutions LLC ("Ridgeway") as the Independent Compliance Monitor for purposes of this Plan. Ridgeway is located at 3000 Richmond Avenue, Suite 800, Houston, Texas 77098. Ridgeway is led by Dr. Carolyn Whitford, Founder and Managing Director, who is a former attorney in the FERC Office of Enforcement with extensive experience in energy market compliance, enforcement defense, and compliance program design.
Ridgeway's engagement covers compliance program design, training support, and quarterly monitoring audits for an initial twelve (12) month period at a flat fee of $385,000. After the initial twelve-month period, the ICM engagement shall continue for the remainder of the thirty-six (36) month Compliance Monitoring Period, on terms to be agreed between Dunmore and Ridgeway (or a successor ICM approved by FERC OE). In the event that Ridgeway is unable or unwilling to continue serving as ICM, Dunmore shall promptly notify FERC OE and shall engage a successor ICM with comparable qualifications and independence, subject to FERC OE's written approval. FERC OE shall have fifteen (15) business days to approve or object to any proposed successor ICM.
3.2 Independence of ICM
The ICM shall be independent of Dunmore's management and trading operations. The ICM shall not accept direction from any Dunmore officer, employee, or agent regarding the scope, methodology, or conclusions of the ICM's audit activities. The ICM shall report its findings directly to the CCO and the Board, with copies provided to FERC OE as part of the quarterly reporting described in Section V. Dunmore shall not interfere with, direct, or limit the scope of the ICM's audit activities, and shall not retaliate against or take adverse action against the ICM for any findings, conclusions, or recommendations made in connection with the ICM's audit responsibilities.
3.3 Scope of Quarterly Audits
Each quarterly audit shall cover all trading activity of DPT in MISO and SPP markets during the preceding calendar quarter. The quarterly audits shall be conducted in accordance with a work plan developed by the ICM in consultation with the CCO, and shall include, at a minimum, the following areas of focus:
(a) Day-Ahead Generation Offers. Review of Day-Ahead generation offers at all pricing nodes at which DPT submits offers, with particular attention to offers below estimated marginal cost, including offers at negative prices. The audit shall evaluate whether such offers are supported by documented economic rationale and whether the offers are consistent with DPT's written bidding policies.
(b) FTR Portfolio Positions. Review of FTR portfolio positions and any correlation between FTR positions and contemporaneous physical or virtual trading activity at the same or related pricing nodes. The audit shall evaluate whether FTR acquisitions and positions are consistent with legitimate hedging or portfolio management objectives.
(c) Virtual Transactions. Review of virtual transactions (Increment Offers and Decrement Bids) at all pricing nodes, with particular attention to transactions at the Indiana Hub and Minnesota Hub. The audit shall evaluate whether virtual trading patterns are consistent with legitimate arbitrage strategies and whether there are any indications of cross-product manipulation.
(d) Gas Nominations. Review of gas nominations through Dunmore Midstream Partners LP and coordination between gas scheduling and generation bidding. The audit shall evaluate whether gas nominations are consistent with stated generation plans and legitimate operational needs.
(e) ATSS Effectiveness. Assessment of the functioning and effectiveness of the Automated Trade Surveillance System described in Section IV, including review of alert volumes, alert types, investigation outcomes, and any system issues or gaps identified during the quarter.
(f) Compliance Incidents. Review of any compliance incidents, investigations, or reports during the quarter, including the timeliness and adequacy of Dunmore's response to identified issues.
(g) Training Compliance. Assessment of training completion rates and assessment passage rates for Trading Personnel and Relevant Personnel during the quarter.
(h) Personnel and Policy Changes. Review of any changes to trading desk personnel, supervisory structure, compliance policies, or the ATSS during the quarter, with an assessment of the compliance implications of such changes.
3.4 Audit Methodology
The ICM shall have unrestricted access to all records, systems, and personnel necessary to conduct the quarterly audits. Specifically:
(a) The ICM shall have access to all trading records, communications (including emails, instant messages, text messages, and recorded telephone lines), trade capture systems, risk management systems, gas scheduling systems, compliance records, and any other records or systems relevant to the audit.
(b) The ICM may interview any Trading Personnel, Relevant Personnel, or other Dunmore employees as necessary to conduct the audit. Dunmore shall make such personnel available for interviews within a reasonable time frame, and personnel shall cooperate fully and truthfully with the ICM.
(c) The ICM shall employ quantitative analysis of trading patterns, including but not limited to statistical analysis of offer prices relative to marginal costs, correlation analysis between physical and virtual positions at common pricing nodes, congestion impact analysis evaluating the effect of DPT's trading activity on locational marginal prices and congestion components, and profitability analysis of cross-product trading strategies.
(d) The ICM may engage specialized consultants, data analysts, or other experts as necessary to assist in the conduct of the quarterly audits, subject to applicable confidentiality protections.
3.5 Audit Reports
The ICM shall prepare a comprehensive written report following each quarterly audit. Each audit report shall include the following components:
(a) A description of the scope and methodology of the audit, including the time period covered, the records and systems reviewed, and the analytical techniques employed;
(b) A summary of the trading activity reviewed, including aggregate volumes, transaction counts, and key metrics for each product type (physical, virtual, and FTR);
(c) Findings regarding compliance with this Plan, applicable FERC regulations, and MISO and SPP tariff provisions;
(d) Identification of any potential violations, compliance deficiencies, or areas of concern, with supporting analysis and documentation;
(e) Recommendations for corrective action to address identified deficiencies or concerns; and
(f) A status report on the implementation of corrective actions recommended in prior audit reports.
Audit reports shall be completed within thirty (30) days of the end of each calendar quarter. The ICM shall provide each audit report to the CCO, the Board, and FERC OE. Audit reports provided to FERC OE shall be included as part of the quarterly reporting under Section V.
3.6 Corrective Action
If the ICM identifies any potential violation or compliance deficiency in a quarterly audit report, the CCO shall develop and implement a corrective action plan within thirty (30) days of receiving the audit report. The corrective action plan shall identify the specific deficiency or violation, the root cause (if determinable), the corrective measures to be implemented, the timeline for implementation, and the person(s) responsible for implementation. The corrective action plan shall be communicated to the Board and FERC OE. Implementation of corrective actions shall be verified by the ICM in the subsequent quarterly audit, and the ICM shall include an assessment of the adequacy and effectiveness of corrective actions in its next audit report.
SECTION IV — AUTOMATED TRADE SURVEILLANCE SYSTEM
4.1 Implementation Requirement
Dunmore shall implement an Automated Trade Surveillance System ("ATSS") capable of real-time and post-trade monitoring of DPT's wholesale electricity market trading activity in MISO and SPP. The ATSS shall be designed to identify potentially manipulative or non-compliant trading activity on a timely basis and to generate alerts for review by compliance staff and the CCO.
The ATSS shall be fully operational within one hundred twenty (120) days of the effective date of this Plan, i.e., by June 8, 2024. Dunmore shall notify FERC OE in writing when the ATSS becomes fully operational, and shall include in such notice a description of the system's capabilities, the vendor or developer of the system, and confirmation that the system has been tested and validated by the ICM in accordance with Section 4.4.
4.2 System Capabilities — Minimum Requirements
The ATSS shall have, at a minimum, the following capabilities:
(a) Below-Cost Offer Monitoring. Real-time monitoring of all Day-Ahead and Real-Time market bids and offers submitted by DPT, with automated alerts for bids or offers that fall below a configurable threshold relative to estimated marginal cost. The initial threshold shall be set to generate an alert for any offer priced below $0/MWh. The CCO may adjust this threshold from time to time based on experience and the recommendations of the ICM, provided that any adjustment shall be documented and reported to FERC OE in the next quarterly report.
(b) FTR Correlation Monitoring. Monitoring of FTR portfolio positions and automated alerts for potential correlations between new or existing FTR positions and contemporaneous physical or virtual trading activity at the same or related pricing nodes. The system shall be capable of identifying instances where DPT acquires or holds FTR positions that could benefit from locational marginal price movements caused by DPT's physical or virtual trading activity.
(c) Virtual Transaction Monitoring. Monitoring of virtual transactions (Increment Offers and Decrement Bids) with automated alerts for patterns that may indicate cross-product manipulation, including concentrations of virtual positions at pricing nodes where DPT simultaneously holds FTRs or physical generation assets. The system shall be capable of evaluating virtual transaction profitability and identifying patterns of persistent uneconomic virtual trading.
(d) Cross-Product Surveillance. Automated identification of instances where DPT holds simultaneous positions across physical generation, virtual transactions, and FTRs at the same or related pricing nodes. The system shall apply specific monitoring protocols for activity at the Indiana Hub and Minnesota Hub, consistent with the areas of concern identified in the underlying investigation.
(e) Gas Nomination Monitoring. Monitoring of gas nominations through Dunmore Midstream Partners LP relative to generation unit dispatch and Day-Ahead offers, with automated alerts for gas nominations that appear inconsistent with stated generation plans. The system shall be capable of comparing gas nomination volumes with expected generation output based on Day-Ahead commitments and Real-Time dispatch instructions.
(f) Pattern Detection. Pattern detection algorithms designed to identify potentially manipulative trading strategies, including but not limited to uneconomic bidding designed to affect locational marginal prices, artificial congestion creation at specific pricing nodes, wash trading or trading with an affiliate for a non-economic purpose, and fraudulent price manipulation.
(g) Audit Trail and Logging. Comprehensive audit trail and logging of all alerts generated by the system, all investigations triggered by alerts, and the disposition of each alert and investigation. The audit trail shall be tamper-resistant and shall maintain a complete chronological record of all compliance monitoring activity.
4.3 Alert Review and Escalation
All alerts generated by the ATSS shall be subject to the following review and escalation procedures:
(a) All alerts shall be reviewed by compliance staff within one (1) business day of generation. The initial review shall include a preliminary assessment of whether the alert indicates a potential compliance issue warranting further investigation or is a false positive that can be resolved and documented.
(b) Alerts that, upon initial review, require further investigation shall be escalated to the CCO within two (2) business days of the initial alert generation.
(c) The CCO shall determine whether an escalated alert warrants a formal compliance investigation and, if so, shall initiate such investigation within five (5) business days of receiving the escalated alert. The CCO's determination shall be documented, including the reasons for initiating or declining to initiate an investigation.
(d) The CCO shall maintain a comprehensive log of all alerts generated by the ATSS, all investigations initiated, and the disposition of each alert and investigation. The alert log shall be made available to the ICM for purposes of the quarterly audits under Section III and to FERC OE upon request.
4.4 System Testing and Validation
Prior to becoming fully operational, the ATSS shall be tested and validated by the ICM (Ridgeway Compliance Solutions LLC) to confirm that the system meets the minimum requirements specified in Section 4.2 and is capable of performing its intended monitoring functions. The testing and validation process shall include:
(a) Functional testing of each alert type using historical trading data and simulated trading scenarios;
(b) Validation that the system accurately captures and processes all required data feeds from DPT's trade capture systems, MISO and SPP market systems, gas scheduling systems, and related data sources;
(c) Verification that alert thresholds are properly calibrated and that the system generates appropriate alerts in response to test scenarios; and
(d) Assessment of the system's audit trail and logging capabilities.
The ICM shall provide a written validation report to the CCO, the Board, and FERC OE upon completion of the testing and validation process. The validation report shall confirm whether the ATSS meets the minimum requirements of this Plan and shall identify any deficiencies or recommendations for improvement.
The ATSS shall be reviewed and, if necessary, updated or recalibrated at least annually during the Compliance Monitoring Period. The annual review shall be conducted by the CCO in consultation with the ICM, and any material changes to the system's configuration, alert thresholds, or capabilities shall be reported to FERC OE in the next quarterly report.
4.5 Data Retention
All data captured by the ATSS, including alert logs, investigation records, system configuration parameters, and audit trail data, shall be retained for a minimum of five (5) years from the date of generation. Data shall be stored in a format that is readily accessible and searchable for audit, review, and regulatory purposes. Dunmore shall implement appropriate data security measures to protect the integrity and confidentiality of ATSS data, including access controls, encryption, and backup procedures.
SECTION V — QUARTERLY REPORTING TO FERC OFFICE OF ENFORCEMENT
5.1 Reporting Obligation
Dunmore shall submit quarterly compliance reports to the FERC Office of Enforcement for the duration of the thirty-six (36) month Compliance Monitoring Period (February 9, 2024 through February 9, 2027). Reports shall be submitted within forty-five (45) days of the end of each calendar quarter, on the following schedule (subject to adjustment if the applicable date falls on a weekend or federal holiday, in which case the report shall be due on the next business day):
• Quarter ending March 31: report due by May 15
• Quarter ending June 30: report due by August 14
• Quarter ending September 30: report due by November 14
• Quarter ending December 31: report due by February 14 of the following year
Reports shall be submitted to the Director, Division of Investigations, Office of Enforcement, Federal Energy Regulatory Commission, 888 First Street NE, Washington, D.C. 20426, currently Margaret Hollowell, or such other address or person as FERC OE may designate in writing to the CCO.
5.2 Report Contents
Each quarterly compliance report shall include the following:
(a) Trading Activity Summary. A summary of DPT's trading activity in MISO and SPP during the quarter, including total trading volumes (in MWh), number of Day-Ahead and Real-Time transactions, number and aggregate notional value of virtual transactions (Increment Offers and Decrement Bids), and number and aggregate notional value of FTR transactions.
(b) ATSS Alert Summary. A summary of all ATSS alerts generated during the quarter, categorized by alert type (e.g., below-cost offer, FTR correlation, virtual transaction pattern, cross-product, gas nomination), together with the disposition of each alert (e.g., resolved as false positive, investigated and closed, investigated and corrective action taken, referred to FERC OE).
(c) Compliance Investigations. A description of any compliance investigations initiated or concluded during the quarter, including the facts giving rise to the investigation, the investigative steps taken, findings, and any corrective actions implemented.
(d) ICM Audit Report. A copy of the ICM's quarterly audit report prepared pursuant to Section III of this Plan.
(e) Training Activities. A summary of compliance training activities conducted during the quarter, including the number of personnel trained (by category — Trading Personnel and Relevant Personnel), total hours of training completed, topics covered, and assessment results (including any remedial training required and completed).
(f) Personnel and Policy Changes. A description of any changes to trading desk personnel, supervisory structure, compliance policies, or the ATSS during the quarter, together with an assessment of the compliance implications of such changes.
(g) Corporate Structure Changes. A description of any material changes to Dunmore's corporate structure, ownership, or business operations relevant to wholesale electricity market activities, including but not limited to mergers, acquisitions, divestitures, new market entry, or changes to Market-Based Rate Authorizations.
(h) Corrective Action Status. A report on the status of implementation of any corrective actions recommended by the ICM or required by FERC OE, including a description of each corrective action, the implementation timeline, the current status, and any obstacles encountered.
(i) CCO Certification. A certification by the CCO that the quarterly report is accurate and complete to the best of the CCO's knowledge, information, and belief.
5.3 Supplemental Reporting
In addition to the quarterly reports, Dunmore shall promptly report to FERC OE certain matters requiring immediate attention:
(a) Dunmore shall report to FERC OE within five (5) business days of identifying any compliance violation or suspected violation, whether identified through the ATSS, ICM audits, internal reporting through the compliance hotline, self-monitoring, or any other means. The report shall describe the nature of the violation or suspected violation, the facts known at the time of reporting, the steps being taken to investigate, and any immediate corrective measures implemented.
(b) Dunmore shall promptly report to FERC OE any material change in the status or qualifications of the CCO, including any proposed removal, replacement, or reassignment of the CCO, in accordance with Section I.4 of this Plan.
SECTION VI — ANNUAL COMPLIANCE CERTIFICATION
6.1 Certification Requirement
Within sixty (60) days of the end of each calendar year during the Compliance Monitoring Period, the Chief Executive Officer and the Chief Compliance Officer of Dunmore shall execute and submit to FERC OE a joint annual compliance certification. Three annual certifications are required during the Compliance Monitoring Period:
(a) The first annual certification shall cover the period from February 9, 2024 through December 31, 2024, and shall be submitted no later than March 1, 2025.
(b) The second annual certification shall cover calendar year 2025 (January 1, 2025 through December 31, 2025) and shall be submitted no later than March 1, 2026.
(c) The third and final annual certification shall cover the period from January 1, 2026 through February 9, 2027 (or such portion of calendar year 2027 as falls within the Compliance Monitoring Period), and shall be submitted no later than April 10, 2027.
6.2 Certification Content
Each annual certification shall include the following statements:
(a) That Gavin Harcourt, Founder, Chairman, and Chief Executive Officer (or his successor in that position), and Jennifer Caulfield, Chief Compliance Officer (or her successor in that position), have reviewed this Enhanced Compliance Plan and Dunmore's compliance with its terms during the applicable certification period;
(b) That, to the best of their knowledge, information, and belief, Dunmore has complied in all material respects with the terms of this Plan during the certification period;
(c) That all required compliance training under Section II has been completed by all Trading Personnel and Relevant Personnel during the certification period, including any required remedial training;
(d) That the Automated Trade Surveillance System has been operational and functioning in accordance with Section IV during the certification period;
(e) That all quarterly reports required under Section V and all ICM quarterly audit reports required under Section III have been timely prepared and submitted to FERC OE during the certification period;
(f) That any known or suspected violations of FERC regulations, market rules, or this Plan identified during the certification period have been investigated and reported as required by this Plan; and
(g) Identification of any material exceptions, qualifications, or limitations to the foregoing certifications, together with a detailed explanation of each such exception, qualification, or limitation, the reasons therefor, and the steps taken or planned to address the matter.
6.3 Personal Accountability
The annual certification shall be signed personally by Gavin Harcourt in his capacity as Chief Executive Officer of Dunmore Energy Holdings Ltd. and by Jennifer Caulfield in her capacity as Chief Compliance Officer of Dunmore Energy Holdings Ltd., or by their respective successors in those positions. The signing officers shall certify under penalty of perjury that the statements contained in the annual certification are true and correct to the best of their knowledge, information, and belief. The personal certification requirement is intended to ensure individual accountability at the highest levels of Dunmore's management for compliance with this Plan and with applicable FERC regulations.
SECTION VII — POLICIES AND PROCEDURES
7.1 Trading Desk Oversight
DPT shall maintain and enforce comprehensive written policies and procedures governing oversight of all trading desk activities. These policies and procedures shall include, at a minimum, the following elements:
(a) Supervisory Structure. Clear lines of supervisory authority for the MISO and SPP trading desks, currently under the supervision of Derek Sung, Senior Vice President, Power Marketing & Trading. The policies shall identify each trading desk, the personnel assigned to each desk, the direct supervisor of each desk, and the escalation chain for compliance and risk issues. Any changes to the supervisory structure shall be documented and reported to the CCO and included in the next quarterly report to FERC OE.