Court keeps claims for energy refunds alive

The Federal Energy Regulatory Commission must reconsider its denial of refunds to wholesale customers of Powerex Corp. and other electric companies in the Pacific Northwest during the 2000-01 California energy crisis, a federal appeals court ruled Friday.

FERC must review rejected claims by cities including Seattle and Tacoma, Wash., the U.S. 9th Circuit Court of Appeals in San Francisco ruled.

The court also ordered the agency to reconsider its decision to exclude from refund consideration power bought on the Pacific Northwest spot market for use in California.

“FERC abused its discretion in denying potential relief for transactions involving energy that was ultimately consumed in California,” Judge Sydney Thomas wrote. “In determining whether refunds were warranted, FERC should have considered new evidence of intentional market manipulation.”

The agency has already approved $6.4 billion in settlements of California claims that power sellers gouged the state during the energy crisis, when power prices rose tenfold, businesses and consumers endured rolling blackouts and the state’s two largest utilities became insolvent.

California is still seeking a $1 billion refund from Powerex, a marketing subsidiary of British Columbia Hydro & Power Authority, said Erik Saltmarsh, executive director of the California Electricity Oversight Board. It’s the state’s biggest outstanding claim in the Northwest.

California initially sought about $2 billion in refunds for Northwest purchases, some of which have been settled, Saltmarsh said.