2 power companies to settle claims
Two power companies will pay $84 million to settle claims against them stemming from the 2000-01 California energy crisis, the Federal Energy Regulatory Commission said Thursday.
The agency found widespread manipulation during the power crisis in Western states in 2000 and 2001, when California endured a huge jump in natural gas and electricity prices, rolling blackouts and the bankruptcy filing of its biggest utility.
At an open meeting in Washington, the commissioners approved a $56-million settlement by a unit of El Paso Corp. to resolve all outstanding claims against it.
PacifiCorp, a unit of MidAmerican Energy Holdings Co., will pay $27.9 million to resolve charges that it manipulated the California and Pacific Northwest power markets in 2000 and 2001. MidAmerican Energy Holdings is a subsidiary of Berkshire Hathaway Inc.
The California attorney general’s office and the Public Utilities Commission, as well as other state agencies, agreed to the settlements, FERC said.
“These settlements put us another step closer to finally resolving the lingering issues from the Western energy crisis and returning money to consumers,” Commission Chairman Joseph T. Kelliher said.
The commission has approved more than $6 billion in settlements, which have reduced costs for customers of Southern California Edison, Pacific Gas & Electric Co. and San Diego Gas & Electric Co.
“Settlements, not prolonged and costly litigation, have given consumers more than $6 billion in refunds,” Kelliher said.
Separately, the commission proposed making wholesale power market monitors more independent to help improve competitiveness in U.S. electricity markets.
“This order proposes a package of important regulatory reforms designed to promote effective competition,” Kelliher said. “The central question is, what can the commission do to make wholesale markets more competitive?”
State regulators have complained that the commission is not adequately overseeing market operations in an era of rising power prices.
For market monitors, the order approved Thursday proposes that power grid organizations be required to provide adequate staff and data. Another proposal would be to have the monitor report to the board of the grid operator rather than to management. The commission also suggested that monitors be required to report any violations to the commission.
“True markets are supposed to benefit consumers and protect consumers from exploitation,” said John Anderson, president of the Electricity Consumers Resource Council, which represents large industrial consumers of power. “By their actions today, they tacitly admitted that restructured markets are not succeeding in achieving that objective.”
