PRIVILEGED AND CONFIDENTIAL — ATTORNEY-CLIENT PRIVILEGE / ATTORNEY WORK PRODUCT
INTERNAL MEMORANDUM
CALDERWOOD & HARKNESS LLP 1001 Fannin Street, Suite 4200 Houston, Texas 77002
December 20, 2023
TO: Catherine Bloom, Responsible Partner
FROM: Hannah Brinkley, Lead Associate
RE: Analysis of FERC Staff Revised Settlement Offer — Docket No. IN23-7-000 (Dunmore Energy Holdings Ltd. / Dunmore Power Trading LLC)
C&H MATTER NO.: 1016-00004
BILLING CODE: 71420.00001
I. Executive Summary
On December 18, 2023, FERC Staff—through Christine Pham, Senior Attorney in the Division of Investigations within the Office of Enforcement—transmitted a revised settlement offer in Docket No. IN23-7-000. The revised offer proposes a total monetary resolution of $11.7 million, comprising an $8.5 million civil penalty and $3.2 million in disgorgement of alleged unjust profits. The offer was transmitted via email to my attention with a copy to you, and was accompanied by a brief cover letter referencing the parties' December 4, 2023 settlement conference and our subsequent December 8, 2023 written settlement proposal.
This revised offer represents a reduction of $19.1 million (approximately 62%) from FERC Staff's initial demand of $30.8 million—consisting of an $18 million civil penalty plus $12.8 million in disgorgement—as set forth in Staff's October 2, 2023 Preliminary Findings letter. By any measure, the magnitude of this reduction is significant. It reflects, at minimum, Staff's recognition that its initial demand was not fully supportable and that the analytical work presented in our November 6, 2023 Response to Preliminary Findings—and, in particular, the expert report of Dr. Leonard Whitfield of Whitfield Economic Advisors LLC submitted on November 20, 2023—has materially undermined the evidentiary foundation of Staff's case.
Notwithstanding this favorable movement, the $11.7 million figure remains well above Dunmore's target settlement range of $3 million to $5 million in civil penalty with no disgorgement, as established in our November 28, 2023 Settlement Strategy and Negotiation Framework memorandum (the "Strategy Memo"). The gap between the revised offer and the midpoint of Dunmore's target range ($4 million) stands at $7.7 million. This gap, while narrower than the original $26.8 million spread, remains substantial and warrants a disciplined counter-proposal strategy.
This memorandum analyzes each component of the revised offer in detail, assesses the strengths and vulnerabilities of both FERC Staff's position and Dunmore's defenses, evaluates the litigation risk and best alternative to a negotiated agreement ("BATNA") for both parties, compares the revised offer to precedent FERC enforcement settlements in analogous cases, and recommends a counter-proposal strategy targeting a resolution closer to Dunmore's target range. The memorandum also addresses financial impact considerations relevant to Dunmore Energy Holdings Ltd. ("DEH") and its equity investors.
II. Background and Procedural Context
A. Investigation Summary
The Federal Energy Regulatory Commission's Office of Enforcement ("OE") initiated a formal, non-public investigation of Dunmore Power Trading LLC ("DPT"), a wholly owned subsidiary of DEH, by formal order of investigation dated June 12, 2023, issued pursuant to 18 C.F.R. Part 1b. The investigation was assigned to the Division of Investigations and is led by Thomas Adebayo, Lead Investigator, under the supervision of Margaret Hollowell, Director of the Division of Investigations, with Christine Pham serving as Senior Attorney and primary point of contact for settlement discussions.
The investigation concerns alleged manipulation by DPT in the Midcontinent Independent System Operator, Inc. ("MISO") Day-Ahead and Real-Time energy markets during the period from January 3, 2022 through March 17, 2023 (the "Relevant Period"). The investigation focuses on DPT's trading activity at two MISO pricing nodes: the Indiana Hub and the Minnesota Hub.
FERC Staff's allegations encompass three categories of alleged conduct:
1. Uneconomic Day-Ahead Bidding. Staff alleges that DPT submitted approximately 2,840 GWh in negative Day-Ahead energy offers at the Indiana Hub during the Relevant Period, with offer prices as low as negative $15/MWh to negative $40/MWh. Staff contends these offers were uneconomic—that is, below DPT's variable cost of generation—and were submitted for the purpose of artificially depressing Locational Marginal Prices ("LMPs") at the Indiana Hub rather than for any legitimate commercial purpose. DPT's fleet of natural gas-fired generation assets in western Indiana (the Hendricks County facility, consisting of three combined-cycle units with an aggregate nameplate capacity of 1,280 MW) is at the center of this allegation.
2. Cross-Product Manipulation via Virtual Transactions. Staff alleges that DPT simultaneously submitted approximately 1,620 GWh in virtual transactions (increment offers and decrement bids) at the Minnesota Hub during the Relevant Period, strategically positioned to benefit from the congestion differentials allegedly created by DPT's uneconomic Day-Ahead offers at the Indiana Hub. Staff contends that these virtual transactions constituted the "harvesting" mechanism through which DPT captured the unjust profits generated by the allegedly manipulative bidding at the Indiana Hub.
3. Physical-Financial Coordination with Gas Nominations. Staff further alleges that DPT coordinated its energy market bidding with natural gas pipeline nominations made by Dunmore Midstream Partners LP ("DMP"), an affiliated entity within the DEH corporate family, to support the manipulative scheme. Specifically, Staff contends that DMP's nominations on the Horizon Gas Pipeline (which serves the Hendricks County facility) were structured to create artificial congestion on the gas system, thereby providing a pretext for DPT's negative energy offers.
Staff's analysis of DPT's Financial Transmission Rights ("FTR") portfolio identified FTR positions with a notional value of approximately $47.3 million that allegedly stood to benefit from the congestion patterns created by DPT's trading activity. This figure serves as the anchor for Staff's initial disgorgement calculation, though as discussed below, Dr. Whitfield's analysis has substantially undermined the causal link between DPT's trading and FTR portfolio gains.
The applicable statutory and regulatory provisions are Section 222 of the Federal Power Act, 16 U.S.C. § 824v (prohibiting 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 Commission's jurisdiction), and the Commission's Anti-Manipulation Rule, 18 C.F.R. § 1c.2, promulgated thereunder.
B. Investigation Originated from MISO IMM Referral
The investigation originated from a market monitoring referral. On April 3, 2023, Velthorn Market Analytics, Inc., acting in its capacity as the MISO Independent Market Monitor ("IMM"), transmitted a referral letter to FERC's Office of Enforcement. The referral letter, signed by Dr. Patricia Engel, Chief Market Analyst at Velthorn, flagged certain bidding patterns at the Indiana Hub that the IMM identified as potentially inconsistent with competitive behavior. Specifically, the IMM's automated surveillance tools detected a statistically significant correlation between DPT's negative Day-Ahead offers at the Indiana Hub and subsequent favorable congestion outcomes for FTR positions held by DPT in the same geographic corridor.
Following receipt of the IMM referral, the FERC Division of Analytics and Surveillance conducted its own preliminary analysis. Dr. Samuel Breck, Senior Economist within the Division, reviewed the trading data and confirmed the anomalies identified by the IMM. Dr. Breck's preliminary analysis formed the basis for FERC Staff's May 22, 2023 preliminary inquiry letter to DPT, which preceded the formal order of investigation. It is notable that Dr. Breck's preliminary analysis relied on the same "but for" counterfactual modeling approach that Dr. Whitfield's expert report subsequently challenged. This methodological vulnerability has been a consistent theme throughout the investigation and, as discussed in Section III.B below, has significantly weakened Staff's disgorgement claim.
C. Dunmore's Cooperation to Date
Since the commencement of the investigation, Dunmore has pursued a strategy of full, proactive cooperation with FERC Staff, consistent with the cooperation principles outlined in the Commission's Revised Policy Statement on Enforcement (18 C.F.R. § 1b.1) and the Penalty Guidelines' treatment of cooperation as a mitigating factor. Dunmore's cooperation has been exemplary and should be credited accordingly in any settlement resolution. The principal elements of Dunmore's cooperation are as follows:
Document Productions. Calderwood & Harkness has overseen three comprehensive document productions to FERC Staff, totaling approximately 187,000 documents (approximately 1.24 million pages) collected from 11 custodians within the DEH, DPT, and DMP organizations. The productions were managed in coordination with Crestline Data Solutions LLC, the e-discovery vendor engaged for this matter. The three productions were submitted on the following schedule:
• First Production (July 24, 2023): 48,200 documents, encompassing trading records, internal communications among DPT's trading desk personnel, and DPT's compliance policies and procedures;
• Second Production (August 21, 2023): 63,400 documents, encompassing DMP pipeline nomination records, inter-affiliate communications, and FTR portfolio management documentation; and
• Third Production (October 30, 2023): 75,400 documents, encompassing additional responsive materials identified through supplemental search terms negotiated with FERC Staff, including financial records, Board materials, and risk management committee minutes.
Witness Testimony. Dunmore made six employees available for sworn testimony pursuant to 18 C.F.R. § 1b.12, conducted at FERC's offices in Washington, D.C. The key witnesses included:
• Kyle Renfro (Senior Trader, DPT), testified September 5, 2023 — provided testimony regarding DPT's Day-Ahead bidding strategy, generation dispatch economics, and portfolio optimization rationale for negative offers;
• Anastasia Petrov (Director of FTR Trading, DPT), testified September 12, 2023 — provided testimony regarding DPT's FTR acquisition strategy, the timing of FTR positions relative to the Relevant Period, and the economic rationale for the FTR portfolio; and
• Derek Sung (Vice President, Risk Management, DEH), testified September 19, 2023 — provided testimony regarding DEH's risk management framework, inter-affiliate transaction policies, and the relationship between DPT's trading and DMP's pipeline operations.
Three additional employees provided testimony on dates in October 2023, addressing compliance functions, gas nomination procedures, and market analysis.
Written Submissions. Calderwood & Harkness submitted a comprehensive Response to Preliminary Findings on November 6, 2023, consisting of approximately 45 pages of legal argument and factual analysis supported by extensive exhibits. The Response challenged each of Staff's three categories of alleged conduct, presented the legitimate business justification for DPT's trading activity, and argued that Staff's market impact analysis was fundamentally flawed.
Expert Report. Dr. Leonard Whitfield of Whitfield Economic Advisors LLC submitted his expert report to FERC OE on November 20, 2023. Dr. Whitfield's report, which totaled 72 pages plus appendices containing detailed quantitative analyses, concluded that (i) the actual market impact of DPT's trading was no more than $2.1 million, as compared to Staff's initial claim of $12.8 million in unjust profits; (ii) the congestion patterns at the Indiana Hub during the Relevant Period were primarily attributable to a series of well-documented transmission outage events on the AEP-MISO transmission interface rather than DPT's bidding behavior; and (iii) DPT's negative Day-Ahead offers were economically rational when considered in the context of DPT's contractual minimum generation obligations under its tolling agreement with Hendricks County Energy Partners LLC and the portfolio-wide economics of DPT's combined generation and trading position.
D. Prior Settlement Discussions
Following submission of the Response to Preliminary Findings, Calderwood & Harkness initiated settlement discussions with FERC Staff. The timeline of settlement-related interactions is as follows:
October 10, 2023: Catherine Bloom and I attended a meeting at FERC's offices in Washington, D.C., with FERC Enforcement leadership, including Margaret Hollowell (Director, Division of Investigations), Thomas Adebayo (Lead Investigator), and Christine Pham (Senior Attorney). The meeting was convened at Calderwood & Harkness's request to discuss the path forward following the Preliminary Findings letter. At that meeting, we previewed the substance of our forthcoming Response and signaled Dunmore's interest in achieving a consensual resolution. FERC Staff indicated that a negotiated settlement was preferable to contested proceedings, provided the resolution adequately addressed Staff's enforcement objectives.
December 4, 2023: The first formal settlement conference was conducted at FERC's offices. Catherine Bloom, I, and Martin Llewellyn (General Counsel, DEH) attended on behalf of Dunmore. Christine Pham, Thomas Adebayo, and Dr. Samuel Breck attended on behalf of FERC Staff. The conference was productive. FERC Staff acknowledged the significance of Dr. Whitfield's expert analysis and indicated that the disgorgement figure was under review. Staff, however, maintained that a substantial civil penalty was warranted given the volume of allegedly uneconomic bidding and the scale of DPT's FTR positions. The parties agreed that Calderwood & Harkness would submit a written settlement proposal following the conference.
December 8, 2023: Calderwood & Harkness submitted a written settlement proposal to Christine Pham, proposing the following terms: (i) a civil penalty within Dunmore's target range of $3 million to $5 million (we proposed $3 million as the starting point); (ii) no disgorgement; (iii) a 36-month Enhanced Compliance Plan incorporating the elements described in Section III.C below; and (iv) standard "neither admit nor deny" consent agreement language. The written proposal was accompanied by a five-page letter summarizing the key arguments in support of the proposed terms.
The revised settlement offer of $11.7 million received on December 18, 2023, constitutes FERC Staff's response to our December 8, 2023 proposal. We now turn to a detailed analysis of each component of the revised offer.
III. Detailed Analysis of the Revised Offer
A. Penalty Component: $8.5 Million
1. Reduction from Initial Demand
FERC Staff's initial penalty demand, as set forth in the October 2, 2023 Preliminary Findings letter, was $18 million. Staff calculated this figure under the FERC Penalty Guidelines as a base penalty of approximately $9 million, which was then doubled to account for the alleged duration and geographic scope of the manipulative scheme (spanning 14 months across two MISO pricing hubs). The revised offer of $8.5 million represents a 52.8% reduction from the initial penalty demand.
2. Implicit Methodology Assessment
FERC Staff's revised offer letter does not provide a detailed explanation of the methodology underlying the $8.5 million figure. However, based on our understanding of the Penalty Guidelines framework, the $8.5 million figure implies one of two adjustments by Staff, or a combination thereof:
(a) Reduction of the Duration/Scope Multiplier. Staff may have reduced or eliminated the 2x multiplier applied to the base penalty in the initial demand. At $8.5 million—slightly below the $9 million base penalty initially calculated—Staff appears to be applying a multiplier closer to 1x on the base penalty, or possibly applying the base penalty without enhancement and then making a modest downward adjustment.
(b) Reduction of the Base Penalty. Alternatively, Staff may have reduced the base penalty calculation itself, possibly crediting Dunmore's extensive cooperation and proactive compliance efforts as mitigating factors warranting a downward departure from the otherwise-applicable base penalty. Under this interpretation, Staff may have calculated a reduced base penalty (perhaps in the range of $5 million to $6 million) and then applied a modest multiplier.
Without further transparency from Staff regarding the derivation of the $8.5 million figure, it is difficult to determine which of these adjustments was applied. We should request that Christine Pham provide additional detail on Staff's revised penalty calculation during the next settlement conference. Understanding the analytical basis for the $8.5 million figure will help us calibrate our counter-proposal and identify areas where further reductions can be justified.
3. Comparison to FERC Penalty Guidelines Factors
The FERC Penalty Guidelines identify a number of factors that may increase or decrease a base penalty. Dunmore's position with respect to the key mitigating factors is exceptionally strong:
(i) Cooperation. Dunmore has provided full and timely cooperation throughout the investigation, including three comprehensive document productions totaling 187,000 documents from 11 custodians, the availability of six employees for sworn testimony, a detailed written Response to Preliminary Findings, and the submission of Dr. Whitfield's expert report. The breadth and timeliness of Dunmore's cooperation exceed what is typical in FERC enforcement matters and should be credited as a significant mitigating factor.
(ii) Pre-Existing Compliance Program. DPT maintained a compliance program prior to the commencement of the investigation. Importantly, Dunmore proactively hired Jennifer Caulfield as Chief Compliance Officer in February 2023—before the investigation was formally initiated in June 2023 and before even the preliminary inquiry letter of May 2023. This proactive investment in compliance leadership demonstrates Dunmore's commitment to regulatory compliance and should be credited as an independent mitigating factor.
(iii) No Prior Enforcement History. Neither DEH, DPT, nor any of their affiliates has been the subject of a prior FERC enforcement action, nor has any entity within the DEH corporate family been the subject of enforcement action by the Commodity Futures Trading Commission ("CFTC"), the Securities and Exchange Commission ("SEC"), or any state public utility commission. DPT has maintained its FERC market-based rate authority since 2005 (Docket No. ER05-1128-000) without any compliance issues.
(iv) Voluntary Engagement of Independent Compliance Consultant. Dunmore voluntarily engaged Ridgeway Compliance Solutions LLC (under the direction of Dr. Carolyn Whitford, a nationally recognized energy compliance consultant) on October 15, 2023, to conduct an independent review of DPT's compliance program and to recommend enhancements. This engagement was initiated by Dunmore voluntarily, without any requirement or request from FERC Staff, and represents a substantial investment in compliance infrastructure.
4. Assessment. The $8.5 million penalty remains approximately $3.5 million to $5.5 million above Dunmore's target range of $3 million to $5 million. While the 52.8% reduction from the initial demand is meaningful, significant room for further reduction exists given the strength of the mitigating factors outlined above and the substantive weaknesses in FERC Staff's case on the merits, as discussed in Section V below. We believe that a penalty in the range of $3.5 million to $5 million is appropriate and well-supported by the Penalty Guidelines, the evidentiary record, and comparable settlement precedent.
B. Disgorgement Component: $3.2 Million
1. Reduction from Initial Demand
FERC Staff initially sought $12.8 million in disgorgement of alleged unjust profits derived from DPT's trading activity during the Relevant Period. The revised offer of $3.2 million in disgorgement represents a 75% reduction from Staff's initial demand—a far more dramatic reduction than the 52.8% reduction in the penalty component.
2. Significance of the Reduction
The magnitude of this reduction is of particular strategic significance. A 75% reduction in the disgorgement component effectively concedes that Dr. Whitfield's expert analysis rebutting Staff's unjust profits calculation had substantial merit. As noted above, Dr. Whitfield's report concluded that the actual market impact of DPT's trading was no more than $2.1 million, and that the congestion patterns at the Indiana Hub during the Relevant Period were primarily driven by a series of transmission outage events on the AEP-MISO transmission interface—events wholly unrelated to DPT's bidding behavior—rather than by DPT's negative Day-Ahead offers. Dr. Whitfield's analysis included a detailed examination of MISO transmission outage logs, Transmission Loading Relief ("TLR") data, and real-time congestion reports, all of which demonstrated that the most significant congestion events at the Indiana Hub coincided with planned and unplanned transmission outages, not with DPT's bidding activity.
The fact that FERC Staff reduced the disgorgement demand by 75%—from $12.8 million to $3.2 million—strongly suggests that Staff's own review of Dr. Whitfield's analysis led to a substantial downward revision of Staff's internal assessment of unjust profits. This represents a significant concession by Staff and provides powerful leverage for eliminating the disgorgement component entirely.
3. Staff's Apparent Revised Methodology
While Staff's revised offer letter does not explain the derivation of the $3.2 million figure, the number appears to reflect a revised calculation that partially credits Dr. Whitfield's transmission outage analysis while retaining some measure of attributed market impact above Dr. Whitfield's $2.1 million estimate. Specifically, the $3.2 million figure is approximately $1.1 million above Dr. Whitfield's $2.1 million estimate, suggesting that Staff may be attributing some incremental market impact to DPT's bidding beyond what Dr. Whitfield conceded. This incremental attribution is likely based on Staff's view that not all of the congestion at the Indiana Hub can be explained by transmission outages, and that some residual portion is attributable to DPT's negative offers.
However, this incremental attribution is analytically weak. Dr. Whitfield's analysis accounted for the full range of congestion drivers at the Indiana Hub, including load variability, generation outages at non-DPT facilities, and weather-related demand spikes, in addition to transmission outages. The residual unexplained congestion in Dr. Whitfield's model is within the margin of error of the regression analysis and does not support a reliable estimate of unjust profits attributable to DPT's bidding.
4. Continuing Vulnerability of Disgorgement Claim
Even at the reduced $3.2 million level, the disgorgement figure remains speculative and cannot be quantified with the certainty required for a just resolution. The key weaknesses in Staff's disgorgement calculation include:
(a) Flawed "But For" Counterfactual Model. FERC Staff's Dr. Samuel Breck relied on a "but for" counterfactual model that assumes all congestion differentials at the Indiana Hub during the Relevant Period were caused by DPT's bidding—an assumption that Dr. Whitfield's analysis, based on actual transmission outage data and MISO market reports, has thoroughly refuted. Dr. Breck's model fails to control for the well-documented transmission outage events that were the primary drivers of congestion during the Relevant Period, resulting in a materially overstated estimate of DPT's market impact.
(b) Failure to Account for Legitimate Portfolio Optimization. Staff has not adequately accounted for the legitimate portfolio optimization rationale for DPT's Day-Ahead offers. The evidence in the record—including testimony from Kyle Renfro and documentary evidence of DPT's tolling agreement with Hendricks County Energy Partners LLC—demonstrates that DPT's negative offers were consistent with a rational strategy of minimizing losses on must-run generation during periods of low market prices. DPT's contractual minimum generation obligations required the Hendricks County facility to maintain a minimum output level, making negative offers an economically rational response to below-cost market conditions. Staff's failure to account for this legitimate commercial rationale inflates the attributed market impact.
(c) Temporal disconnect in FTR Positions. DPT's FTR positions were acquired in MISO's annual FTR auction months before the commencement of the Relevant Period, as part of DPT's routine hedging strategy for its generation fleet. The temporal disconnect between FTR acquisition and the alleged manipulative trading undermines the causal nexus required to support a disgorgement claim. Anastasia Petrov's testimony confirmed that DPT's FTR positions were acquired based on long-term congestion forecasts and were not structured in anticipation of DPT's Day-Ahead bidding strategy during the Relevant Period.
5. Recommendation. We recommend that Dunmore continue to argue for zero disgorgement in the counter-proposal. The 75% reduction from $12.8 million to $3.2 million demonstrates that Staff is not confident in this component of its case. The speculative nature of the calculation, the fundamental methodological weaknesses in Dr. Breck's "but for" model, and the strength of Dr. Whitfield's rebuttal provide compelling grounds for eliminating the disgorgement component entirely. Moreover, the precedent in FERC enforcement settlements demonstrates that disgorgement is typically reserved for cases in which the unjust profits are clearly quantifiable—a standard that FERC Staff has not met in this matter.
C. Non-Monetary Terms (Implicit in Offer)
The revised offer letter from Christine Pham references "standard consent agreement terms" including a compliance plan and continuing cooperation commitment, but does not specify the details of these non-monetary terms. This presents an opportunity for Dunmore to shape the non-monetary component of the settlement in a manner that advances its interests while providing additional value to FERC Staff in lieu of monetary relief.
Dunmore's previously proposed 36-month Enhanced Compliance Plan remains available and represents a significant mitigating factor that should further reduce the monetary component of any settlement. The key elements of the proposed compliance plan are as follows:
• Chief Compliance Officer Reporting Structure. Jennifer Caulfield, as CCO, will report directly to the Board of Directors of DEH (currently chaired by Margaret Forsyth), bypassing the management reporting chain. This ensures the independence and visibility of the compliance function at the highest level of corporate governance.
• Annual Compliance Training. All DPT trading personnel (currently 34 individuals) will complete a minimum of 16 hours per year of compliance training, covering FERC's Anti-Manipulation Rule, MISO market rules, cross-product trading restrictions, and the identification and escalation of potential compliance concerns. Training will be conducted by a combination of internal compliance staff and external subject-matter experts.
• Quarterly Independent Compliance Audits. Ridgeway Compliance Solutions LLC, under Dr. Carolyn Whitford, will conduct quarterly compliance audits of DPT's trading activity for the 36-month duration of the compliance plan. Each quarterly audit will include a review of all Day-Ahead and Real-Time energy market transactions, virtual transactions, FTR trading activity, and gas pipeline nominations, with findings reported directly to the CCO, the General Counsel, and the Board of Directors.
• Automated Trade Surveillance System. DPT will implement an automated trade surveillance system capable of identifying potentially manipulative trading patterns in near-real-time. The system will incorporate algorithmic monitoring of cross-product correlations, uneconomic bidding alerts, and anomaly detection based on historical trading baselines. DPT is currently evaluating three vendor proposals for this system and anticipates implementation by Q2 2024.
• Quarterly Reporting to FERC OE. DPT will submit quarterly compliance reports to FERC's Office of Enforcement for the 36-month duration of the compliance plan. Each report will summarize the results of the quarterly Ridgeway audit, describe any compliance issues identified and remedial actions taken, and provide an update on the implementation and operation of the automated trade surveillance system.
• Annual Compliance Certification. The CEO of DEH (Gavin Harcourt) and the CCO (Jennifer Caulfield) will each execute an annual compliance certification attesting to DPT's compliance with the terms of the consent agreement and the effectiveness of the compliance plan.
In addition to the compliance plan, the settlement must include "neither admit nor deny" language—standard consent agreement language in which the respondent neither admits nor denies the findings and conclusions set forth in the Commission's order approving the settlement. This language is essential for Dunmore given several critical business considerations:
• DEH's private equity investor base, including Pendleton Capital Partners, LP (holding approximately 27% of DEH's equity) and Greenvale Infrastructure Fund III (holding approximately 19% of DEH's equity), would view an admission of market manipulation as a material adverse event with potential implications for their investment and for DEH's ability to raise capital in the future.
• DPT's ongoing participation in the MISO markets under its market-based rate authority (Docket No. ER05-1128-000) could be jeopardized by an admission of manipulation. An admission could serve as a basis for challenges to DPT's market-based rate authorization or for enhanced scrutiny by the MISO IMM.
• An admission of manipulation could create collateral estoppel or evidentiary issues in potential private litigation by counterparties claiming damages from DPT's trading activity.
For these reasons, "neither admit nor deny" language is non-negotiable from Dunmore's perspective. We anticipate no resistance from FERC Staff on this point, as such language is standard in FERC enforcement settlements.
IV. Gap Analysis: Revised Offer vs. Dunmore Target Range
A. Monetary Comparison Table
The following table summarizes the monetary terms at each stage of the negotiation and the gap between FERC Staff's revised offer and Dunmore's target range:
Key Gaps:
• Gap between the revised offer ($11.7M) and Dunmore's target midpoint ($4.0M): $7.7 million
• Gap between the revised offer ($11.7M) and Dunmore's target ceiling ($5.0M): $6.7 million
• Gap between the revised offer ($11.7M) and Dunmore's walk-away threshold ($6.0M, per Strategy Memo): $5.7 million
B. Assessment of Remaining Gap
While the remaining gap of $6.7 million to $7.7 million between the revised offer and Dunmore's target range is significant in absolute terms, the trajectory of FERC Staff's movement is decidedly favorable. Staff has moved $19.1 million from its initial position of $30.8 million, while Dunmore has not moved from its target range. This asymmetry in movement is a positive signal and suggests that further movement by Staff is achievable.
Several observations regarding the dynamics of the remaining gap:
First, FERC Staff's willingness to reduce the disgorgement component by 75% signals a fundamental lack of confidence in the unjust profits calculation. This provides a strong factual and analytical basis for arguing that disgorgement should be eliminated entirely. If disgorgement is reduced to zero—as we recommend—the remaining gap narrows to $3.5 million to $5.5 million (the difference between Staff's $8.5 million penalty and Dunmore's $3 million to $5 million penalty target range). This is a far more manageable negotiating gap.
Second, the penalty reduction from $18 million to $8.5 million signals Staff's willingness to credit mitigating factors, but suggests that Staff has not yet fully internalized the weakness of its case on the merits. Our counter-proposal should emphasize the substantive vulnerabilities in Staff's case—particularly the legitimate portfolio optimization defense, the temporal disconnect in FTR positions, and the circumstantial nature of the physical-financial coordination allegation—to drive further penalty reduction.
Third, the magnitude of Staff's initial demand ($30.8 million) was almost certainly inflated as a negotiating anchor. The 62% reduction to $11.7 million may itself represent an intermediate anchor, with Staff expecting a counter-proposal in the range of $6 million to $8 million. By holding firm at the lower end of Dunmore's target range ($3.5 million) and presenting a compelling analytical case, we can shift the zone of agreement downward toward a resolution in the $4 million to $5 million range.
V. Assessment of Litigation Risk and BATNA
A. Risks if Matter Proceeds to ALJ Hearing
If settlement negotiations fail, FERC Staff could issue a show cause order pursuant to Section 31(d)(3) of the Federal Power Act, 16 U.S.C. § 823b(d)(3), initiating public proceedings before a FERC Administrative Law Judge ("ALJ"). Each party faces distinct risks in the event of contested proceedings.
1. Risks to Dunmore
The risks to Dunmore in the event of an ALJ proceeding are significant and should be carefully weighed against the cost of a negotiated resolution:
(a) Higher Penalty Exposure. An ALJ is not bound by the terms of any prior settlement discussions and could, in theory, impose a penalty up to the statutory maximum under Section 316A of the Federal Power Act, 16 U.S.C. § 825o-1, which currently provides for civil penalties of up to approximately $1.5 million per violation per day. Depending on how "violations" are counted—Staff could argue each day of allegedly uneconomic bidding constitutes a separate violation—the theoretical maximum exposure could be orders of magnitude higher than the amounts currently under discussion. While such a maximum is unlikely as a practical matter, the possibility of a higher penalty than would be achievable through settlement is a real risk that must be considered.
(b) Public Proceedings. A show cause order and ALJ proceeding would be public, resulting in the loss of the non-public treatment that currently applies to the investigation under 18 C.F.R. Part 1b. Public disclosure of the allegations, trading data, and witness testimony would be unavoidable and could have severe reputational consequences for DEH and DPT. The reputational risks are particularly acute given DPT's ongoing participation in the MISO markets, where counterparties, the IMM, and MISO's market administration staff would become aware of the full scope of the allegations.
(c) Reputational Risk with Equity Investors. Public proceedings would trigger notification obligations to Pendleton Capital Partners, LP and Greenvale Infrastructure Fund III under their respective investment agreements with DEH. The prospect of contested FERC enforcement litigation—with uncertain duration and outcome—could adversely affect investor confidence and DEH's ability to execute planned capital transactions, including the potential Series C preferred equity issuance that Gavin Harcourt has discussed for Q2 2024.
(d) Significant Additional Legal Costs. Calderwood & Harkness estimates that the additional legal fees for an ALJ proceeding would be in the range of $1.5 million to $3 million, depending on the scope of discovery, the number of witnesses, and the duration of the hearing. This estimate does not include additional expert fees for Dr. Whitfield (who would need to prepare for and provide testimony at the hearing) or additional e-discovery costs. When combined with the legal fees already incurred in the investigation phase, the total legal cost of a contested proceeding could approach or exceed $5 million.
(e) Extended Duration. ALJ proceedings before the Commission typically take 12 to 24 months from the issuance of the show cause order to the ALJ's initial decision, with additional time potentially required for Commission review and the issuance of a final order. During this period, the matter would remain pending, creating ongoing uncertainty for Dunmore's business operations, investor relations, and market participation.
2. Risks to FERC Staff
FERC Staff also faces meaningful risks in the event of contested proceedings, and these risks should be leveraged in settlement negotiations:
(a) Burden of Proof. The burden of proof rests on FERC Staff in an ALJ proceeding. Staff must demonstrate by a preponderance of the evidence that DPT's trading constituted market manipulation within the meaning of Section 222 of the Federal Power Act and 18 C.F.R. § 1c.2. Under the Commission's precedent (see, e.g., Coaltrain Energy, L.P., 155 FERC ¶ 61,204 (2016)), Staff must prove both (i) that DPT engaged in a fraudulent scheme, device, or artifice, and (ii) that DPT acted with the requisite scienter—i.e., with the intent to defraud or manipulate. Proving scienter is often the most challenging element for Staff, particularly in cases involving trading strategies that have both legitimate and potentially manipulative explanations.
(b) Vulnerability of Market Impact Analysis. Dr. Whitfield's expert analysis has substantially undermined Staff's market impact calculations. In an ALJ proceeding, Dr. Whitfield would provide testimony supporting his conclusion that DPT's actual market impact was no more than $2.1 million, and that congestion patterns were primarily driven by transmission outages. Staff's Dr. Breck would face rigorous cross-examination on the methodological limitations of his "but for" counterfactual model, including its failure to control for exogenous congestion drivers. The ALJ could credit Dr. Whitfield's analysis over Dr. Breck's, resulting in a finding that Staff has not demonstrated unjust profits with the required degree of certainty.
(c) Credibility of Legitimate Business Justification Defense. DPT's portfolio optimization defense—that its negative Day-Ahead offers were economically rational given contractual minimum generation obligations and the portfolio-wide economics of combined generation and trading—is credible and well-supported by documentary evidence. The testimony of Kyle Renfro, combined with the tolling agreement and internal risk management analyses in the record, would provide a substantial factual foundation for this defense. Staff would need to overcome this evidence to establish the fraudulent scheme element of its manipulation claim.
(d) Temporal disconnect in FTR Positions. DPT's FTR positions pre-dated the Relevant Period by several months, having been acquired in MISO's annual FTR auction. This temporal disconnect weakens the causal nexus between DPT's Day-Ahead bidding and the alleged benefits to its FTR portfolio. Staff would need to establish that DPT acquired or maintained its FTR positions with the intent to benefit from subsequently manipulative trading—a theory that is difficult to prove given the routine, hedging-related nature of DPT's FTR acquisitions, as documented in Anastasia Petrov's testimony and the FTR portfolio management files produced in discovery.
(e) Circumstantial Nature of Physical-Financial Coordination Allegation. Staff's case regarding physical-financial coordination between DPT and DMP through gas pipeline nominations is largely circumstantial. While temporal correlations exist between DMP's nominations on the Horizon Gas Pipeline and DPT's bidding activity, the record does not contain direct evidence of coordination or a shared manipulative intent between the two entities. The inter-affiliate communications produced in discovery reflect routine operational coordination consistent with standard industry practice for affiliated generation and midstream companies.
B. Assessment
Both parties have a strong incentive to settle this matter. For Dunmore, settlement avoids the risks of public proceedings, higher penalty exposure, reputational harm, and substantial additional legal costs. For FERC Staff, settlement avoids the risk of an ALJ decision that could credit Dr. Whitfield's analysis and reject or substantially reduce Staff's claimed unjust profits, while also conserving Staff's limited enforcement resources for other matters.
The balance of litigation risks, viewed objectively, favors a resolution closer to Dunmore's target range than to Staff's revised offer. Dunmore's cooperation has been exemplary, its defenses are credible and well-developed, and Staff's case—while not without merit—has significant evidentiary and analytical vulnerabilities.
In light of these considerations, a resolution in the range of $3.5 million to $5 million in civil penalty with no disgorgement remains achievable through continued negotiation. The recommended counter-proposal strategy set forth in Section VII below is designed to drive the negotiation toward this range.
VI. Comparison with Precedent FERC Enforcement Settlements
A review of comparable FERC enforcement settlements in market manipulation cases involving organized wholesale electricity markets supports the conclusion that a resolution in Dunmore's target range is reasonable and consistent with Commission precedent. While no two enforcement cases are identical, the following observations regarding recent settlement precedent are instructive:
Penalty Ranges in Comparable Cases. Penalties in the range of $3 million to $6 million have been imposed in FERC enforcement settlements involving trading volumes, market impact, and alleged conduct comparable to the allegations against DPT. In cases where the respondent demonstrated robust cooperation with Staff's investigation and implemented or committed to implement comprehensive compliance measures, penalties have tended to fall at the lower end of this range. The Commission has repeatedly emphasized that cooperation and self-remediation are among the most significant mitigating factors under the Penalty Guidelines, and has rewarded respondents who engage constructively with the enforcement process.
Disgorgement in Comparable Cases. Settlements involving disgorgement typically require clear evidence of quantifiable unjust profits—that is, profits that can be traced, with reasonable certainty, to the alleged manipulative conduct. In cases where the causal link between the respondent's trading and the claimed market impact is contested or uncertain—as it is here, given Dr. Whitfield's rebuttal of Staff's "but for" analysis—the Commission has been willing to resolve matters without a separate disgorgement component, or with a nominal disgorgement amount. The 75% reduction in Staff's disgorgement demand in this case is consistent with a recognition that the evidentiary basis for a substantial disgorgement claim has been significantly eroded.
Compliance Plan Credit. The Commission has consistently recognized the value of comprehensive compliance plans as a component of enforcement resolutions. In several recent settlements, respondents who committed to robust, independently monitored compliance plans received meaningful credit in the form of reduced monetary penalties. Dunmore's proposed 36-month Enhanced Compliance Plan—with independent quarterly audits by Ridgeway Compliance Solutions, automated trade surveillance, and CEO/CCO annual certification—is among the most comprehensive compliance commitments offered in a recent FERC enforcement settlement and should be credited accordingly.
"Neither Admit Nor Deny" Language. Standard "neither admit nor deny" language has been included in the vast majority of FERC enforcement settlements and is not expected to be a point of contention in these negotiations.
Taken together, these precedent comparisons support the conclusion that a resolution of $3.5 million to $5 million in civil penalty with no disgorgement, combined with a 36-month Enhanced Compliance Plan, would be within the range of outcomes in comparable FERC enforcement settlements and would not represent an outlier that might attract adverse attention from the Commission or from future respondents in enforcement proceedings.
VII. Recommended Counter-Proposal Strategy
A. Proposed Counter-Offer Terms
Based on the analysis set forth in this memorandum, we recommend that Dunmore submit a counter-proposal with the following terms:
Civil Penalty: $3.5 million, payable in two equal installments:
• First installment of $1,750,000 due within 30 calendar days of the date of the Commission's order approving the Stipulation and Consent Agreement; and
• Second installment of $1,750,000 due within 180 calendar days of the date of the Commission's order approving the Stipulation and Consent Agreement.
The installment structure is appropriate given the magnitude of the penalty and is consistent with the approach taken in several recent FERC enforcement settlements. It provides Dunmore with manageable cash flow timing while ensuring full payment within six months of the order.
Disgorgement: $0. The counter-proposal should argue forcefully that Dr. Whitfield's analysis demonstrates unjust profits are speculative and cannot be quantified with sufficient certainty to support a disgorgement component. Staff's own 75% reduction in the disgorgement demand—from $12.8 million to $3.2 million—effectively concedes this point. Elimination of disgorgement is analytically justified and consistent with Commission precedent in cases where the causal link between trading activity and market impact is contested.
36-Month Enhanced Compliance Plan. The counter-proposal should reaffirm Dunmore's commitment to the comprehensive compliance plan as previously proposed, incorporating all elements described in Section III.C above:
• CCO (Jennifer Caulfield) reporting directly to the Board of Directors;
• Annual compliance training for all DPT trading personnel (minimum 16 hours per year);
• Quarterly independent compliance audits by Ridgeway Compliance Solutions LLC;
• Implementation of automated trade surveillance system;
• Quarterly compliance reports to FERC OE for 36 months; and
• Annual compliance certification by CEO (Gavin Harcourt) and CCO (Jennifer Caulfield).
"Neither Admit Nor Deny" Language. Standard consent agreement language in which Dunmore neither admits nor denies the findings and conclusions set forth in the Commission's order. This term is non-negotiable for Dunmore.
Continuing Cooperation Commitment. Dunmore will commit to continuing cooperation with FERC Staff in connection with any related investigations arising from the same or similar conduct, including making employees available for additional testimony if requested and producing additional documents as reasonably necessary.
B. Key Arguments to Emphasize in Counter-Proposal
The written counter-proposal to Christine Pham should emphasize the following key arguments:
1. Disgorgement Should Be Zero
Staff's revised $3.2 million disgorgement figure remains unsupported by reliable evidence and is speculative in nature. Dr. Whitfield's analysis, which has not been meaningfully rebutted by Staff, concluded that DPT's actual market impact was no more than $2.1 million, and that the congestion patterns at the Indiana Hub during the Relevant Period were primarily driven by transmission outage events rather than DPT's bidding. Staff's 75% reduction from $12.8 million to $3.2 million reflects Staff's own recognition that its initial unjust profits calculation was fundamentally overstated. The remaining $3.2 million figure is built on the same flawed "but for" counterfactual model that Dr. Whitfield has discredited. Eliminating disgorgement entirely would be consistent with the evidentiary standard applicable to disgorgement claims and with the Commission's approach in analogous cases where the causal link between trading and market impact is uncertain.
2. Penalty Should Reflect Dunmore's Mitigation
Dunmore's mitigation profile is exceptionally strong and warrants a penalty at the lower end of the applicable range under the Penalty Guidelines. The counter-proposal should emphasize: full cooperation with Staff's investigation (187,000 documents from 11 custodians, six employees made available for sworn testimony); proactive compliance investment (CCO hired before the investigation commenced); no prior FERC enforcement history across the entire DEH corporate family; and the commitment to a comprehensive 36-month compliance plan with independent monitoring by a nationally recognized compliance firm. Each of these factors is independently significant under the Penalty Guidelines; taken together, they support a substantial downward departure from the otherwise-applicable base penalty.
3. Compliance Plan Has Independent Value to FERC
The 36-month Enhanced Compliance Plan serves FERC's remedial objectives independently of any monetary penalty. The Commission has consistently recognized that compliance improvements—particularly those that are independently monitored, comprehensive in scope, and designed to prevent recurrence—have substantial value as an enforcement outcome. Dunmore's investment of approximately $385,000 in the Ridgeway Compliance Solutions engagement, plus the cost of implementing the automated trade surveillance system (estimated at $250,000 to $350,000 for software licensing, implementation, and integration), represents a substantial voluntary remediation effort that reduces the need for a punitive monetary resolution. The counter-proposal should argue that the compliance plan's value should be credited against the monetary component of the settlement.
4. Risk-Adjusted Value to Staff
A consensual resolution with a robust compliance plan and a meaningful civil penalty achieves FERC Staff's enforcement objectives while avoiding the risks and resource expenditure of ALJ litigation. Staff's case has meaningful vulnerabilities—particularly on the disgorgement/unjust profits element and the scienter element—and an ALJ proceeding could result in a lower penalty or an adverse outcome for Staff. A settlement at $3.5 million in penalty with a 36-month compliance plan delivers a certain enforcement outcome that Staff can present as a meaningful resolution, while avoiding the risk that an ALJ could credit Dr. Whitfield's analysis and substantially reduce or eliminate the penalty.
C. Negotiation Tactics
We recommend the following negotiation approach:
1. Written Counter-Proposal Submission. Submit the counter-proposal in writing to Christine Pham by January 8, 2024. The written submission should be in the form of a concise letter (no more than 8–10 pages) summarizing the key arguments outlined above, accompanied by the proposed settlement terms. The submission should be professional and constructive in tone while firmly advocating for Dunmore's position.
2. Request Second Settlement Conference. The cover letter should request a second settlement conference within two weeks of the submission—targeting the week of January 15, 2024—to discuss the counter-proposal and continue negotiations. Maintaining momentum in the settlement discussions is important; delays could allow institutional attention to shift or negotiating dynamics to change.
3. Signal Flexibility Within a Narrow Range. During the settlement conference, we should signal Dunmore's willingness to negotiate within a narrow range above $3.5 million on the penalty component, but should hold firm on zero disgorgement. This approach acknowledges that some compromise on the penalty may be necessary while preserving the strategically important position that unjust profits are speculative and should not be the subject of disgorgement.
4. Explore Reframing if Staff Insists on Disgorgement. If Staff insists on including some disgorgement component in the settlement, we should explore reframing a small amount as part of an increased penalty rather than a separate disgorgement line item. For example, Dunmore could agree to a total all-in penalty of $4.5 million to $5 million with no separate disgorgement line item, thereby preserving Dunmore's position that unjust profits are speculative while achieving a total monetary resolution within Dunmore's walk-away threshold. This reframing allows Staff to characterize the resolution as including an element attributable to market impact without Dunmore conceding that disgorgement is warranted.
5. Walk-Away Threshold. Per the November 28 Strategy Memo, the total monetary resolution (penalty plus any disgorgement) should not exceed $6 million. Any figure above $6 million should trigger a reassessment of litigation strategy, including a detailed cost-benefit analysis of proceeding to an ALJ hearing versus accepting an above-target settlement. This threshold was established with input from Gavin Harcourt, Martin Llewellyn, and Catherine Bloom and should be treated as a firm boundary absent changed circumstances.
VIII. Financial Impact and Client Considerations
A. Total Cost of Resolution at Various Scenarios
The following table presents the estimated total all-in cost to Dunmore at various resolution scenarios, including not only the monetary terms of the settlement (penalty and disgorgement) but also legal fees, expert fees, compliance costs, and e-discovery costs:
These cost estimates are based on the assumption that the matter is resolved through settlement without an ALJ proceeding. If the matter proceeds to an ALJ hearing, Calderwood & Harkness estimates additional legal fees of $1.5 million to $3 million, additional expert fees of $150,000 to $300,000, and additional e-discovery costs of $75,000 to $125,000, for a total incremental litigation cost of approximately $1.7 million to $3.4 million. These incremental costs would be incurred regardless of the outcome of the ALJ proceeding.
Materiality Assessment. DEH reported EBITDA of $891 million for FY 2022, and DPT reported revenue of $614 million for the same period. At the counter-proposal level ($3.5 million penalty, total all-in cost of approximately $6.7 million), the total cost of resolution represents approximately 0.75% of DEH's FY 2022 EBITDA and approximately 1.1% of DPT's FY 2022 revenue—immaterial by any standard financial measure. Even at the revised offer level ($11.7 million settlement, total all-in cost of approximately $14.9 million), the total cost represents approximately 1.7% of DEH's FY 2022 EBITDA, which is significant but not material in the context of DEH's overall financial profile.
B. Investor Considerations
DEH's two principal institutional equity investors—Pendleton Capital Partners, LP (approximately 27% equity) and Greenvale Infrastructure Fund III (approximately 19% equity)—will require notification of the final resolution terms under their respective investor rights agreements with DEH. Martin Llewellyn has confirmed that notification is required within 10 business days of execution of any settlement agreement and that the notification must include a summary of the material terms.
A resolution with no admission of liability and a penalty well below FERC Staff's initial demand of $30.8 million is important for investor relations and DEH's capital-raising capacity. Both Pendleton and Greenvale conducted due diligence on DPT's MISO trading activity as part of their respective investment processes and are generally aware of the regulatory environment in which DPT operates. However, a headline penalty figure in the range of $3.5 million to $5 million—representing an 84% to 89% reduction from Staff's initial demand—would be received far more favorably than a penalty in the range of $8.5 million to $11.7 million, which could raise questions about the scope and seriousness of the alleged conduct.
Gavin Harcourt holds 38% of DEH's equity directly plus an additional 16% through the Harcourt Family Trust, resulting in approximately 54% effective control of DEH. Mr. Harcourt has been briefed on the settlement negotiations and is aligned with the strategy of aggressive negotiation within the target range. His authorization will be required before the counter-proposal is submitted to FERC Staff.
C. Financial Statement Implications
Calderwood & Harkness has coordinated with Prescott & Hargrove LLP (Douglas Fenn, CPA, Engagement Partner), DEH's independent auditor, regarding the financial statement implications of the FERC investigation and potential settlement. DEH has established a reserve in its financial statements for the probable outcome of the matter, in accordance with ASC 450-20 (Contingencies — Loss Contingencies).
The receipt of FERC Staff's revised offer at $11.7 million, combined with the ongoing settlement negotiations, requires a reassessment of the reserve level. The appropriate reserve should reflect the range of probable outcomes. Based on the analysis in this memorandum, the range of probable settlement outcomes is $3.5 million to $5 million (Dunmore's counter-proposal and target range), with the revised offer of $11.7 million representing the upper boundary of FERC Staff's current position. We recommend that Catherine Bloom coordinate with Martin Llewellyn to ensure that DEH's communication with Prescott & Hargrove regarding reserve levels reflects the current negotiation dynamics and the strength of Dunmore's position. Any adjustment to the reserve should be reviewed by Douglas Fenn's team in connection with the preparation of DEH's FY 2023 audited financial statements.
IX. Recommended Next Steps and Timeline
Based on the foregoing analysis, we recommend the following next steps on the timeline indicated:
1. December 22, 2023: Circulate this memorandum to Catherine Bloom and seek her approval of the recommended counter-proposal strategy, including the proposed terms ($3.5 million penalty, zero disgorgement, 36-month compliance plan, "neither admit nor deny" language).
2. December 22–29, 2023: Seek authorization from Martin Llewellyn (General Counsel, DEH) and Gavin Harcourt (CEO, DEH) to submit the $3.5 million counter-proposal. Catherine Bloom and I will schedule a call with Mr. Llewellyn and Mr. Harcourt to discuss the analysis and recommendations in this memorandum and to confirm their alignment with the proposed strategy.
3. January 2–8, 2024: Draft and finalize the counter-proposal letter to Christine Pham. The letter will be prepared by Hannah Brinkley, reviewed by Catherine Bloom, and submitted to Christine Pham no later than January 8, 2024. A draft of the counter-proposal letter will be circulated to Catherine Bloom for review by January 3, 2024.
4. January 8, 2024: Submit the counter-proposal letter to Christine Pham and request a second settlement conference for the week of January 15, 2024. The submission should be made via email with a follow-up hard copy transmitted via overnight courier.
5. Week of January 15, 2024: Second settlement conference with FERC Staff. The Calderwood & Harkness attendees should include Catherine Bloom and Hannah Brinkley; Martin Llewellyn should attend on behalf of Dunmore. We recommend that the conference be conducted in person at FERC's offices in Washington, D.C., if schedules permit, to demonstrate Dunmore's seriousness and engagement.
6. Late January 2024: If agreement is reached