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$2 billion refund back in play
FERC must revisit state energy crisis, appeals court rules
By Clint Swett - Bee Staff Writer
Published 12:00 am PDT Saturday, August 25, 2007
Story appeared in BUSINESS section, Page D1
A federal appeals court Friday ruled that regulators must reconsider their refusal to grant California as much as $2 billion in refunds stemming from the energy crisis of 2000 and 2001.
The ruling is the latest in a string of court decisions that gives California a shot at collecting billions in alleged overcharges stemming from the energy crisis that spawned soaring rates and electrical blackouts.
A three-judge panel for the Ninth Circuit Court of Appeals ruled the Federal Energy Regulatory Commission "abused its discretion" when it said the state couldn't seek refunds for electricity purchased from power producers in the Pacific Northwest earlier this decade.
In addition, it said that FERC ignored evidence of alleged market manipulation by Enron Corp. and should have considered that in making its decision.
California Attorney General Jerry Brown praised the ruling, saying, "This could deter the kind of bad behavior that allows energy manipulators to thrive."
Erik Saltmarsh, executive director of the California Electricity Oversight Board, said it was uncertain how long it might take FERC to reconsider the refunds.
FERC doesn't comment on lawsuits. If the agency does reverse its stance and order refunds, the bulk of the money would come from big power producers such as Powerex, Sempra, TransAlta Energy, Coral Power and Trans-Canada, the attorney general's office said.
Art Larson, a spokesman for San Diego-based Sempra, said the company was studying the ruling and could not comment.
The state already has obtained settlements totaling $5.5 billion of the $9 billion California utilities and ratepayers were allegedly overcharged during the crisis, Saltmarsh said.
About the writer:
- The Bee's Clint Swett can be reached at (916) 321-1976 or cswett@sacbee.com.
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