Williams Deal Would Erase Some Power Bills
Moving to resolve lingering price-manipulation allegations in California, Williams Cos. agreed Wednesday to forgive up to $140 million in unpaid power bills racked up by Southern California Edison, Pacific Gas & Electric Co. and other utilities during the state’s energy crisis.
The deal, which must be approved by regulators, is expected to result in refunds for some utility customers, who experienced steep rate hikes during the crisis. The amount is yet to be determined and probably would be less than consumer groups and others had hoped for.
Still, consumer advocates were optimistic that the utilities “will move quickly to make sure that the customers who paid these overcharges will receive the benefits of these settlements,” said Mindy Spatt, spokeswoman for the Utility Reform Network, a San Francisco-based watchdog group.
California, its largest utilities and some municipalities have accused Tulsa, Okla.-based Williams, along with fellow energy traders Reliant Resources Inc., Enron Corp., Dynegy Inc. and others, of engaging in a variety of market abuses in 2000 and 2001, including artificially restricting the state’s electricity and natural gas supplies and using trading ploys that helped pump up their profits.
The cases have been contentious and have largely pitted the entities that had to buy power at inflated prices -- including the state, municipal cooperatives, utilities and, by extension, consumers -- against Williams and other companies. The firms have denied wrongdoing and have pressed for full payment of billions of dollars owed them under contracts signed during the crisis.
Thus far, the Federal Energy Regulatory Commission has proposed that some companies pay $3.3 billion in refunds, but California and its utilities have pursued additional payments, arguing that they are owed at least $6 billion more.
Under Wednesday’s agreement, Williams would erase $140 million from the $230 million in unpaid power bills that the company claims it is owed as of the end of 2002.
“This is an encouraging development,” said John E. Bryson, chairman and chief executive of Edison International Inc., the Rosemead-based parent of SoCal Edison. But, he added, “we will continue to pursue cost relief for our customers.”
PG&E;, the utility subsidiary of San Francisco-based PG&E; Corp. that is currently operating under Bankruptcy Court protection, said its portion of the settlement would be about $75 million. Most of the remaining $65 million would be allocated to SoCal Edison, with small amounts set aside for Sempra Energy’s San Diego Gas & Electric Co. and other smaller players if they join the settlement, Williams said.
Williams spokesman Brad Church said the proposed settlement “resolves all known and all remaining FERC investigations involving Williams related to the energy crisis ... and covers at least 90%, and potentially $100%, of our refund liability.”
In 2002, Williams settled a similar case with the state, agreeing to pay $417 million and shaving $1.4 billion from a $4.3-billion, 10-year power contract California signed at the height of the crisis.
Williams shares rose 46 cents to $9.21, and Edison shares rose 61 cents to $22.80. Both trade on the New York Stock Exchange.
