FERC Rejects Refund Extension

The Federal Energy Regulatory Commission on Thursday rejected California’s demand to expand an existing case and order electricity refunds of as much as $11.7 billion for a surge in prices during the state’s power crisis.

FERC agreed with California Atty. Gen. Bill Lockyer that there are problems with how power sellers report their electricity transactions to the agency. But it disagreed with Lockyer’s March complaint alleging those deficiencies are grounds to authorize an extra $2.8billion in refunds for electricity sales to the state from May through October 2000.

Lockyer sought to extend the time period for refunds in California’s nearly year-old case that seeks $8.9 billion for alleged overcharges for October 2000 through June 2001. That case was not affected by the FERC ruling Thursday.

The attorney general’s office had no immediate reaction to the ruling.

Under FERC rules, the agency can launch a refund proceeding only if a complaint is filed within 60 days of the alleged overcharge.

FERC commissioners rejected Lockyer’s argument to waive the 60-day deadline--and extend the refund period by six months--because of “deficiencies” in the quarterly transaction reports that electricity sellers are required to file with the agency.

“The reporting deficiencies identified by the attorney general in the quarterly reports, while serious and in need of correction, do not invalidate market-based pricing tariffs as lawful, filed rates,” the agency said in its order.

The state and its two major utilities have accused marketers of overcharging during the power crisis and pocketing huge profits. The state was forced to step in to buy wholesale power to keep the lights on after utilities could no longer afford to buy power.

Lockyer said the public utility sellers, which made short-term sales to the state, should file new quarterly reports detailing specific transactions.

FERC said its reporting requirements for energy companies is legal under the Federal Power Act. “I do think the legal analysis and the outcome were correct in this order,” said FERC Chairman Patrick H. Wood III.

The agency previously announced it would require all Western sellers to submit specific transaction data for 2000 and 2001.

It also has approved new transaction-specific requirements for all wholesale electricity traders, with the first report due at the end of July, a FERC staffer said.

The transaction data requests stem from a FERC investigation into whether more than 100 energy companies’ trading strategies contributed to the soaring electricity prices of late 2000 and 2001 that led to California blackouts.

The agency will deliver to Congress an interim report by the end of July, Wood said.