FERC to Weigh Contract Claims

Federal utility regulators have ordered hearings into whether energy suppliers overcharged the city of Burbank and the Kroger Co. supermarket operator for long-term electricity contracts signed during the energy crisis.

But first, Burbank and Kroger must hold settlement talks with the power sellers, the Federal Energy Regulatory Commission said in an order issued Monday.

Burbank’s complaint seeks to lower the price of contracts signed with subsidiaries of Calpine Corp. of San Jose, Duke Energy Corp. of Charlotte, N.C., and El Paso Corp. of Houston.

Cincinnati-based Kroger wants to renegotiate contracts with subsidiaries of Dynegy Inc. of Houston and AES Corp. of Arlington, Va. Kroger owns several supermarket chains, including Ralphs and Food 4 Less in California.

The complaints by Burbank and Kroger are among several filed by power buyers, including the state of California, claiming long-term electricity contracts should be thrown out because they were signed in early 2001, when electricity prices were at levels that the commission previously determined were not just and reasonable.

The electricity suppliers have told FERC that the contracts are fairly priced. In addition, Burbank and Kroger have not shown that changing the terms of the contract would be in the public interest, the energy sellers said in filings with FERC.