Hearings Open on Refunds for Power Sales

Dynegy Inc. and other power sellers are set to begin telling a judge why they should not have to pay $1.5 billion in refunds to California power sellers for electricity sold during the state’s power crisis.

Federal Energy Regulatory Commission Judge Bruce Birchman opens a hearing on the issue today. He’ll recommend in August whether FERC should require refunds be paid to power buyers in the state, where prices quadrupled from January to June 2001. State officials say power sellers inflated prices. Sellers say an electricity shortage boosted costs.

The commission directed Birchman in July to consider whether refunds for electricity sales from Oct. 2, 2000, through June 20, 2001, are due and how much. California power buyers, including utilities owned by PG&E; Corp. and Edison International, are seeking about $1.5 billion, said Stan Berman, a lawyer for PG&E.;

The first part of the hearing, through Friday in Washington, will include testimony on how the parties think possible refunds should be calculated. The proceeding is set to conclude June 21.

The commission wants refunds to be based on the formula it established when it set a price cap for California in April and 10 other Western states in June. It’s based on the cost of operating the least-efficient generator in California.