FERC to release staff report on California electricity market Nov. 1

The Federal Regulatory Energy Commission will release Nov. 1 the staff findings of an investigation of the problems in the California wholesale electricity markets and expects to issue a remedial order by yearend, the commission said Thursday. Parties interested in intervening or commenting on proposed remedies will have about 3 weeks to do so.

Oct. 20, 2000

2 min read

The commission ordered the investigation Aug. 23, after customers of San Diego Gas & Electric Co. (SDG&E) began to feel the effect of record electricity prices this summer. SDG&E blamed independent power producers for taking advantage of the deregulated market. Generators say prices rose because supply is falling behind demand in California.

"Because of the need for expeditious action to address the serious issues affecting California electric markets and California consumers," FERC said in its order, it was also taking the "unusual step" of announcing in advance procedures it expects to follow in the case.

In addition to releasing the staff report, the commission said it will also consider issuing Nov. 1 a proposed order that will suggest specific remedies to problems in the California market. Parties interested in intervening or commenting on proposed remedies will have about 3 weeks to do so. FERC said these comments may address facts or issues discussed in the staff investigation.

The commission said will hold a public conference Nov. 9 to discuss proposed remedies and will include as part of the record transcripts of various hearings held earlier in California on the subject. The commission said it expects to issue an order adopting and directing remedies�to the extent the remedies are within its jurisdiction�to address the problems "adversely affecting competitive power markets in California, and, if necessary, ordering any further proceedings to develop remedies to other identified problems."

Since August, PG&E Corp. unit Pacific Gas & Electric Co. and Edison International unit Southern California Edison Co. have jointly filed a petition with FERC seeking a return to cost-of-service rates and other proposed remedies to resolve their own problems. Both have incurred millions of dollars in expenses they cannot pass on to ratepayers under the California electricity industry restructuring laws.