By OGJ editors
HOUSTON, Apr. 2 -- US energy companies—including Williams Cos. Inc., Tulsa; Southern California Edison (SCE), Rosemead, Calif.; Sempra Energy, San Diego; and Mirant Corp., Atlanta—late last month filed comments on the US Federal Energy Regulatory Commission's final report about price manipulation in western US natural gas markets during October 2000 and June 2001.
Issued Mar. 26, FERC's report said it would take action on ordering additional refunds based on evidence gathered during 3 months of investigation by SCE and four prominent California entities into why that state's wholesale power costs skyrocketed during the California power crisis.
Williams noted that the FERC report "demonstrates good progress toward resolving issues" surrounding western energy markets during late 2000 and the first half of 2001.
"We are confident that further, detailed review of the outstanding issues will confirm that Williams operated in accordance with market rules and ethical business practices," said Steve Malcolm, Williams chairman, president, and CEO. "It's time to resolve these issues once and for all—prudently and in the public's interest—and move on."
SCE said, "We are pleased FERC recognizes the pervasive gaming and manipulation of the electric and gas markets in California and the West, but we realize that there's still more to be done."
SCE Chairman John Bryson said, "Today's action is another important step in the long battle to recover for California consumers the massive costs incurred during the 2000-01 energy crisis. I am pleased that the FERC staff report recognizes the pervasive and unlawful manipulation of the electric and gas markets and identifies those who profited from this abuse."
Sempra Energy, meanwhile, went so far as to call California's energy market "dysfunctional."
Sempra Energy said, "The FERC staff and commissioners also acknowledged that underlying supply-demand imbalance and flawed market design were major contributors to California's market problems. In its actions. . .FERC said it will issue orders to 37 market participants identified in a Jan. 6, 2003, report by the California Independent System Operator (Cal-ISO) to 'show cause' that their activities in the California market during 2000 and 2001 complied with tariffs of the Cal-ISO and California Power Exchange."
Mirant Senior Vice-Pres. and General Council Doug Miller, meanwhile, said, "While FERC has left some important work undone, it has made progress toward resolving important issues for our industry, adding, "Regarding the California refund proceeding, Mirant is disappointed that FERC altered the gas price methodology to arrive at revised gas prices for use in the refund methodology. However, even under the new gas calculations, we believe that the net effect is that Mirant will still be owed a substantial amount of money by the California Power Exchange and the California Independent System Operator."
