Calif. accuses FERC of ignoring court on refunds

WASHINGTON - The Federal Energy Regulatory Commission (FERC) improperly ignored a federal court order to weigh new evidence of market manipulation during California's 2000-01 energy crisis, according to a motion filed by the state recently.

The complaint filed by California Attorney General Bill Lockyer in the 9th Circuit Court of Appeals in San Francisco revives the state's long-running demand that FERC order energy suppliers to refund $9 billion for price-gouging.

California said that FERC failed to heed a 2002 ruling from that court requiring it to allow the state to submit new evidence of manipulation after it closed the case record.

"FERC's circumvention of the court's order could cost California ratepayers billions of dollars owed them by the companies that ripped them off during the energy crisis," Lockyer said in a statement.

California asked the court to force FERC to comply with the order and to hold oral arguments on the issue.

A FERC spokesman said the agency had "promptly allowed the California parties and others to adduce evidence of market manipulation."

The spokesman pointed to about $100 million in settlements FERC has reached with energy companies involving manipulation allegations. The state insists it is owed about $9 billion in refunds from energy companies for alleged manipulation during the crisis, which caused a tenfold spike in wholesale electricity prices and rolling blackouts.

FERC in March 2003 upped the refund amount to about $3.3 billion from the $1.8 billion an agency judge awarded to California in 2002.

The state still owes power companies about $3 billion in unpaid bills, meaning the state would receive only $300 million in an initial calculation the agency has not yet finalized. California said that FERC improperly split apart dozens of separate investigations into market manipulation even though the cases viewed as a whole could support the state refund claim.

FERC countered that it has exacted millions of dollars from dozens of energy firms to settle manipulation charges. FERC has also reached initial deals with over a dozen separate energy firms that would produce about $26 million in refunds.

The biggest such deal with California-based Sempra Energy for $7.2 million has not yet been approved by FERC.California said that such "back-room deals" with energy firms "unlawfully dispose of the rightful claims of millions of California consumers to billions of dollars for the massive market abuse that occurred."

Reuters