FERC orders American Energy to pay full penalty for six projects

The Federal Energy Regulatory Commission upheld a decision finding American Energy Inc. must pay an entire $300,000 penalty levied for violations of safety regulations and license conditions at six Michigan projects.

FERC said American Energy failed to meet terms of a 2005 consent agreement. That agreement included a compliance plan and schedule for the company and its subsidiaries to remedy outstanding deficiencies. (HNN 11/23/05) Had American Energy met and maintained compliance, the agreement would have permitted the company to avoid paying $110,000 of the $300,000 penalty.

FERC issued an order March 15 in which it said American Energy failed to meet all deadlines in the agreement. It also denied American Energy’s request for rehearing, supporting the decision of the director of the Division of Hydropower Administration and Compliance, who had said American Energy must pay the $110,000.

Although it filed for rehearing of the director’s decision, American Energy went ahead and paid the conditional remittance of $110,000 to the U.S. Treasury on Jan. 31, 2007. That amount was paid more than three weeks after the date due and, FERC said, interest would accrue from the date payment was due.

�We take compliance with hydropower licenses seriously,� FERC said in its seven-page order. �American Energy has a record of continuing non-compliance, and we have no assurance that this will change in the future.�

FERC said American Energy and its subsidiaries violated the Federal Power Act through violations of safety requirements and failure to make timely submissions of schedules, plans, and drawings required by regional engineers and FERC’s compliance orders. FERC said failure to submit various schedules, plans, and drawings resulted in 37 separate license article violations.

American Energy, a holding company, owns: Seneca Falls Power Corp., licensee for 10.28-MW Waterloo and Seneca Falls (No. 2438); Tomahawk Power and Pulp Co., licensee for 2.509-MW Kings Dam (No. 2239); Cameron Gas &Electric Co., doing business as Grand River Power Co., licensee for 702-kW Smithville and Mix (No. 11150); and Commonwealth Power Co., licensee for 350-kW Middleville (No. 11120), 800-kW LaBarge (No. 11300), and 600-kW Irving Dam (No. 11516).

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