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Lawsuit involving Manchester energy consultant going to federal court

MANCHESTER — An effort by the Federal Energy Regulatory Commission to levy $8.75 million in fines against Manchester’s energy consultant is moving to federal court, with a jury trial requested by FERC lawyers.

The fines against Competitive Energy Services of Maine, which arranges energy purchase deals for the city of Manchester, were first announced in July of 2012.

The parties have been unable to settle the case, and in December FERC lawyers petitioned the U.S. District Court in Massachusetts for a jury trial affirming the civil penalties against CES and its owner, Richard Silkman.

Silkman is accused of colluding with large-scale energy users in Maine to overstate their baseline energy use so as to qualify for incentives designed to encourage conservation during periods of peak use, making it appear that the users were conserving power when they weren’t.

Silkman has denied the charges and his attorneys are attempting to have them dismissed, claiming that the statute of limitations has expired and that FERC’s anti-manipulation statute does not apply to consultants.

If the trial does move forward, Silkman is seeking a change of venue from Massaschsuetts to Maine.

The FERC maintains that New England electricity customers paid $3.33 million for energy demand reductions that never took place.

Under the agreement with Manchester, CES manages energy procurement for all city buildings, street lights and facilities like the airport, water works and treatment plants.

The city’s three-year contract with CES calls for the company to get a small percentage of energy-related transactions, with a minimum annual fee of $55,000 and a maximum of $70,000. The city reserved the right to cancel the agreement, with or without cause, upon 30 days notice.

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