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FERC clears cities from withholding power during crisis

Darleene Barrientos and Joshua Pelzer

The Federal Energy Regulatory Commission announced Friday the cities

of Burbank and Glendale did not physically withhold power from the

market during the 2000-01 California energy crisis.

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In an initial report issued Friday, FERC determined 103 West

Coast energy suppliers did not withhold energy in order to drive up

prices, barring any further evidence. FERC officials could not be

reached for comment late Friday.

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Investigators found several entities, like Burbank and Glendale,

did not have energy available to sell on the market because of

preexisting contracts.

“It’s good news, but not great news,” Glendale Assistant City

Atty. Steve Lins said of the report late Friday.

Physical withholding is just one of many aspects of market

manipulations FERC is investigating, Lins said.

The city of Burbank is not out of the woods because FERC is still

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investigating its pricing of natural gas and allegations of

price-gouging during the energy crisis.

Nevertheless, Ron Davis, the general manager of Burbank Water and

Power, is glad to have this road block removed.

“Withholding was one of the more serious [issues],” he said

Friday. “To have that one behind us is a good thing. I only wish it

was broader.”

Glendale is still involved in two orders to show cause -- to prove

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it did not participate in market-manipulation strategies -- and a

market refund case. But the issue of withholding energy is one the

city is glad to have behind it.

“This is one thing we knew we didn’t do,” Lins said.

Glendale still has to prove it did not participate in manipulation

tactics through its business relationships, which included Enron.

Glendale could potentially owe $14,000 in damages, although the city

believes its sales were legitimate, Lins said.

In a separate FERC investigation case, the city might have to

return $2 million in energy profits generated between Oct. 2, 2000,

to June 21, 2001. City officials said that figure is expected to be

recalculated to $3 million in December.

However, Glendale officials said federal energy law exempts

municipal utilities from FERC jurisdiction.

“We expect at the end of the day, after the courts look at this,

that they will find that FERC has no jurisdiction over Glendale,”

Lins said.


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