Lockyer Pushes Power Cost Refunds With FERC
California officials on Wednesday stepped up their efforts to persuade federal regulators to order refunds for electricity bought during the state’s power crisis, intensifying a debate that has political as well as financial overtones.
State Atty. Gen. Bill Lockyer filed a petition with the Federal Energy Regulatory Commission seeking $1.8 billion to $2.8 billion--and perhaps substantially more--in refunds. A state request for $8.9 billion in refunds is already pending before federal regulators.
The new demand is the latest twist in an energy crisis that has eased at the light switch but remains a hotly debated subject in California’s gubernatorial campaign. The state’s troubles last year, along with the collapse of energy giant Enron Corp., have fueled a new investigation to determine whether companies used their market power to drive up electricity prices last year and have intensified a debate in Congress over new rules for energy markets.
In his complaint to FERC, Lockyer employs a novel legal theory: He contends that electricity wholesalers failed to file the required information about the rates they planned to charge so that regulators could determine whether those rates were just and reasonable.
“The power companies have not filed any of their market-based rates, making every sale illegal and subject to review and refund for excessive charges,” Lockyer told reporters.
A spokesman for Dynegy, one of the power suppliers named in the complaint, said, “We’ve always abided by what FERC has requested.”
“This comes at a time when we should be focusing on the future, working together to develop a long-term solution for California’s power issues,” spokesman David Byford added.
Lockyer is seeking an additional $1.8 billion to $2.8 billion in refunds for alleged overcharges from May through October 2000.
He also contends that the state is due an unspecified larger amount for electricity bought on the spot market by the Department of Water Resources from January through October 2001. The department spent an estimated $10 billion for power during that period.
The complaint seeks refunds from British Columbia Power Exchange, Coral Power, Dynegy Power Marketing, Mirant Americas Energy Marketing, Reliant Energy Services, Williams Energy Marketing and Trading, and Enron Power Marketing.
Last week Lockyer filed complaints against four large energy firms for $150 million, alleging that they broke contracts to provide emergency power to the state’s power grid operator and instead sold the electricity on the lucrative spot market. The state also is asking regulators to void or modify $43 billion in long-term power contracts signed by the state at the height of the power crisis.
Federal regulators also are conducting an investigation, requested by California’s senators, to determine whether any companies used their market power to drive up electricity prices in the West last year.
Lockyer also hinted that he would take action today in Los Angeles relating to municipal power authorities.
