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The Federal Energy Regulatory Commission (FERC) on Wednesday approved a $38 million settlement with Vistra Corp. to close a long-running fight over allegations that its affiliate Dynegy Inc. manipulated a 2015 electricity capacity auction—sending consumers’ bills higher than they should have been.

The settlement ends nearly a decade of litigation that drew in consumer watchdogs, state officials, and federal regulators, all grappling with whether Dynegy’s bidding strategy in the Midcontinent Independent System Operator (MISO) market crossed the line from savvy business into unlawful manipulation.

Dynegy’s Auction Tactics Under Fire

Consumer advocates, including the Illinois Attorney General’s Office and Public Citizen, argued that Dynegy used its market power to warp auction results for the 2015–16 capacity year, leaving electricity customers unfairly overcharged.

Although Dynegy—acquired by Vistra in 2018—has consistently denied wrongdoing, critics claimed the company’s maneuvers distorted the market.

From Approval to Reversal

In 2019, FERC commissioners initially ruled that Dynegy’s actions were acceptable under MISO’s tariff. But that determination didn’t stick. The D.C. Circuit Court of Appeals in 2021 sent the case back for reconsideration, triggering renewed scrutiny.

By 2023, FERC’s enforcement staff concluded Dynegy had, in fact, engaged in market manipulation. Dynegy pushed back, and FERC prepared for an evidentiary hearing—only to pause proceedings in hopes of striking a deal.

Settlement Brings Closure

The $38 million payout includes refunds aimed at compensating consumers. While Dynegy maintains its practices were lawful, the settlement spares the company from years of continued litigation and regulatory risk.

Illinois Attorney General’s Office is represented by Susan Satter, while Public Citizen is represented by Tyson Slocum. Dynegy is represented by Natasha Gianvecchio, Anna Biegelsen, and Richard H. Griffin of Latham & Watkins LLP.