April 24, 2002 — The Federal Energy Regulatory Commission (FERC) said Wednesday that they would hear complaints on whether California can renegotiate or cancel several long-term electricity contracts signed last year.
FERC will hear arguments on any power contracts the state signed before June 20, 2001, that have not since been renegotiated, according to a report from Reuters News Service. No date has been set, but the commission wants to issue a decision on the contracts by May of 2003.
For more information, visit FERC’s web site at http://www.ferc.fed.us/.
The California Public Utilities has maintained that many of its long-term contracts, some of which are priced at three times the current rates per MWh, are unreasonable.
The California Department of Water Resources began buying power for the state after the bankruptcy of PG&E Co. because of soaring power prices and a price cap that prevented utilities from trying to recover the costs.
Earlier this week, California and five power providers renegotiated their contracts, saving the state about 23 percent of the cost in the process.
Although FERC agreed to take the case, it is actively encouraging the state to settle more of the contracts to expedite the return to normal markets.