FERC Ratifies $18 Million in Power-Supplier Settlements
The Federal Energy Regulatory Commission said Wednesday that it would accept $18 million from five power suppliers to settle charges that they manipulated electricity prices during California’s energy crisis in 2000 and 2001.
The settlements with Sempra Energy Trading, Coral Power, Dynegy Inc., the city of Glendale and the Northern California Power Agency had previously been negotiated by FERC staffers and were approved Wednesday by the commission.
They involved allegations of Enron-style trading schemes to deceive grid operators and manipulate prices. In the settlements, none of the power sellers admitted any wrongdoing.
“Although the company did not engage in any improper market activities, it felt it was best to avoid a protracted legal battle,” said Doug Kline, spokesman for Sempra Energy Trading, which settled for $7.2 million.
Sempra, a unit of San Diego-based Sempra Energy, initially reached agreement with FERC staff last fall. At the same time, Coral Power reached a tentative settlement of $7.8 million, also ratified Wednesday. Coral is a unit of Royal Dutch/Shell Group. Regulators Wednesday also endorsed deals struck this year with Dynegy for $3 million, the city of Glendale for $25,000 and the Northern California Power Agency for $22,448.
In June 2003, FERC accused more than 50 companies of abusive trading strategies in Western energy markets. The energy panel has now approved $21.5 million in settlements for those cases, with about $5 million in further accords pending.
The trading disputes are distinct from the larger refund case, in which a group of California parties has demanded $8.9 billion and FERC has signaled that it is moving toward a figure of perhaps one-third that amount.
California officials, including Atty. Gen. Bill Lockyer, have accused the federal energy panel of shortchanging ratepayers in its approach to refunds, particularly for the early part of the energy crisis in late spring and summer 2000. FERC has responded that it is working within the limitations of the Federal Power Act.
In light of such differences, state officials and major utilities have stepped up their efforts to reach sweeping settlements with energy producers rather than rely on FERC rulings, such as those on Wednesday.
