Decision on February overcharges due this week

US Federal Energy Regulatory Commission Chairman Curtis Hebert Thursday said the agency will decide by the end of this week whether to order refunds to California utilities for wholesale power they bought in February. FERC ordered 13 power suppliers Mar. 9 to justify or refund $69 million from allegedly overpriced electricity sold to California utilities during January. He made the comments in response to a question during a Senate Energy committee hearing on the California power crisis.

March 15, 2001

2 min read

By the OGJ Online Staff

HOUSTON, Mar. 15�US Federal Energy Regulatory Commission (FERC) Chairman Curtis Hebert Thursday said the agency will decide by the end of this week whether to order refunds to California utilities for wholesale power they bought in February.

Hebert said the decision would be "addressed" by the end of the week, although he did not say if it would be Friday or Saturday. He made the comments in response to a question during a Senate Energy committee hearing on the California power crisis.

FERC ordered 13 power suppliers Mar. 9 to justify or refund $69 million from allegedly overpriced electricity sold to California utilities during January. State officials claimed suppliers overcharged more than $550 million.

The order was the first in which FERC, acting under a Dec. 15 order allowing for after-the-fact review of wholesale power transactions, addressed charges generators have made windfall profits during California's energy crisis.

Starting in January, FERC established a so-called $150/Mw-hr "soft cap" for electricity sales, under which all transactions bid above the cap were subject to weekly reporting and monitoring requirements.

FERC said the state "grossly" overestimated the amount of refunds due, by including December numbers and about $170 million in refunds due from entities such as the Los Angeles Department of Power and Water which FERC doesn't regulate.

Thursday, Hebert also said the agency is reviewing December wholesale power transactions, but he indicated the review is taking longer than January and February because suppliers weren't required to report transactions to the agency until Jan. 1.

On Wednesday, the agency accused units of Williams and AES Corp of manipulating the California market to inflate electricity prices by keeping certain generation off line. FERC ordered Williams Energy Marketing & Trading Co. and AES Southland to explain why they shouldn�t return $10 million in profits from the alleged scheme. Both companies have denied the charges.