U.S. Justices Decline to Hear Energy Case

The U.S. Supreme Court has declined to hear California’s bid to reinstate lawsuits alleging that power companies double-billed during the state’s power crisis.

The court’s decision Monday not to hear the case lets stand a July ruling by the U.S. 9th Circuit Court of Appeals that said California courts don’t have jurisdiction over the dispute between the state and several energy companies.

California Atty. Gen. Bill Lockyer’s lawsuits against Reliant Resources Inc., Dynegy Inc. and other energy companies alleged that the generators reaped millions of dollars by being paid to hold power in emergency reserve that they then sold on the open market.

Lockyer contended that the companies were paid $49 million from 1998 to 2000 to reserve electricity that was not delivered when requested. The alleged double billing also drove up electricity prices, Lockyer said, by forcing grid operators to buy power on the expensive spot market when they couldn’t call on the emergency reserve of electricity.

The companies have denied the accusations.

The state sued under California’s unfair business laws, but the courts have rejected the claims, saying the state must go before the Federal Energy Regulatory Commission. The commission has exclusive jurisdiction over the wholesale electricity market.

The Supreme Court’s decision Monday was “not a shocking development, but we’re still disappointed,” Lockyer spokesman Tom Dresslar said.

The decision reflects “a statutory structure that the courts have interpreted to leave California at the mercy of FERC,” Dresslar said.

FERC is requiring energy companies, including several subsidiaries of Enron Corp., to pay $3.3 billion for manipulating power prices in California’s market.

But last week California and FERC faced off in the 9th Circuit again over the state’s request for an additional $6 billion in refunds for allegedly excessive power prices during the energy crisis in 2000 and 2001.

At a court hearing Thursday in San Diego, the attorney general’s office argued that FERC was wrong to limit how much California could recover by preventing the state from getting refunds on sales early in the power crisis and on sales made directly to the state, rather than through the spot market.

Several energy companies have settled claims with California and FERC, allowing for $2.4 billion to be refunded to the state.