California refund case postponed until March 2002

By Ann de Rouffignac
OGJ Online

HOUSTON, Sept. 26, 2001 — A Federal Energy Regulatory Commission judge postponed a decision in the landmark $9 billion California electricity refund case until March.

The case has dragged on for months because the California Independent System Operator (ISO) hasn’t supplied the supporting data required by the judge to make his recommendation. The matter was supposed to be decided by November.

California has claimed consumers are owed $9.8 billion in refunds by power generators who allegedly overcharged for wholesale electricity during 2000 and part of 2001. The generators claim the prices were justified by market conditions.

The state through the California Public Utilities Commission and the ISO claimed the generators and other sellers of power unfairly charged the California public. The California Public Utilities Commission and the ISO made these allegations in March of 2001.

The judge asked for documentation of the state’s claims that the prices charged were excessive. He directed the ISO to examine wholesale transactions with individual generators, including plant specific data such the price of natural gas and heat rate.

“The judge asked us to calculate the prices of power from October of 2000 through January 2001 using FERC’s formula for the mitigated price,” said Gregg Fishman, spokesman for the ISO. But the ISO still had not supplied the required data in a satisfactory form by Sept. 25.

One generator who was present at the hearing last week but did not want to be identified said it was unclear why the ISO hasn’t complied with the judge’s request. Some generators have privately asked why the state hasn’t rushed to supply the data, since it could mean substantial refunds to Californians. They surmised the data might not support claims of huge overcharges made last spring.

An ISO attorney who did not want to be identified said the ISO did have the data but it was very “complicated. There is no political agenda here. The board doesn’t micromanage our position in FERC hearings.”

Gov. Gray Davis, who has vehemently demanded refunds, appointed the current ISO board. The judge gave the ISO until Dec. 7 to submit the facts. Once he is satisfied with the data, there will be a 45-day evidentiary period. The judge is scheduled to issue his final report by Mar. 8, 2002.

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