In the biggest refund yet from the California energy crisis, a government-owned Canadian utility today agreed to a $750 million settlement with state officials and the state's largest utilities.
The settlement was announced by California officials and executives with Powerex, a supplier of hydro power owned by the government of British Columbia. The utility said it made the settlement because it was facing potential liability of $3.2 billion.
The bulk of the settlement, which needs approval of the Federal Energy Regulatory Commission, would go to customers of Pacific Gas and Electric Co., Southern California Edison and San Diego Gas and Electric. Some $162 million is earmarked for the state Department of Water Resources, which was buying power on an emergency basis during the worst of the crisis in 2001.
"I am very pleased with this settlement, which is the largest one yet," said Public Utilities Commission President Michael Peevey in a prepared statement. "It's a major advanced toward closing the books on the energy crisis." The refund will go to ratepayers of the three big California utilities as an offset against their current electric bills, the PUC said.
According to Attorney General Kamala Harris, the Canadian utility was buying California electricity, shipping it to Canada and then exporting it back to the state at huge markups.
For Powerex, the settlement represents a discount from a potential liability of $3.2 billion. The utility was the target of a slew of lawsuits.
"This was a tough but necessary decision to protect taxpayers," said British Columbia Minister of Energy and Mines Bill Bennett in a press release. "We have learned that the U.S. court system can be unpredictable. When you weigh this settlement vs. a potential $3.2 billion legal liability, we determined it was in the best interest of taxpayers to settle and put this longstanding dispute behind us."
The utility admitted to no wrongdoing.
With the latest deal, the state has now received $4 billion in refunds from the energy crisis, but is still owed billions more.
Call The Bee's Dale Kasler, (916) 321-1066. Follow him on Twitter @dakasler.