FERC issues final reports on Western energy market manipulation

Thirty-seven companies named, refunds to go up

By Sylvie Dale

March 27, 2003 — The Federal Energy Regulatory Commission on Wednesday released several findings which signal the “beginning of the end” of the investigation into Western energy market manipulation.

In several orders and reports, FERC concluded that more than 30 companies are to blame for some form of manipulation in the Western gas or spot electric markets from 2000 to 2001. The commission proposed a series of generic and company-specific remedies for the market flaws and abuse found in the investigation.

In addition, the commission found that a change was needed in the calculations for its California Refund Case because the previous estimate was based upon a dysfunctional market. FERC estimated that at least $1.5 billion will be added to this number, bringing the total to at least $3.3 billion.

The exact number, which California will recalculate in the next few weeks, will represent the clearing price levels that would have been experienced had a truly competitive market continued to operate, FERC chairman Pat Wood III said in his comments. Refunds could be paid before the end of the summer.

FERC did say that generators should be able to recover their costs on a dollar for dollar basis, but that the California gas indices should not be used to calculate the market-clearing price.

According to Reuters News Service, FERC named 37 companies in connection with questionable energy trading tactics during California’s energy crisis. They are:

“- Sempra Energy
“- Dynegy Inc.
“- Calpine Corp
“- Duke Energy
“- Mirant
“- Reliant Resources Inc.
“- Williams Cos Inc
“- Morgan Stanley
“- B.C. Hydro’s Powerex unit
“- Royal Dutch/Shell
“- Enron’s Portland General Electric
“- Los Angeles Department of Water and Power
“- Aquila Inc
“- Edison International’s Southern California Edison
“- Constellation Energy
“- Sierra Pacific Resources
“- Arizona Public Service
“- PacifiCorp
“- Bonneville Power Administration
“- Cargill-Alliant LLC
“- Idaho Power Co
“- Puget Sound Energy
“- Modesto Irrigation District
“- City of Glendale, Calif
“- City of Azusa, Calif
“- City of Riverside, Calif
“- City of Pasadena, Calif
“- City of Vernon, Calif
“- Salt River Project
“- American Electric Power Services Corp
“- San Diego Gas & Electric
“- Enron Power Marketing Inc. and affiliate Enron Energy Services Inc.
“- Avista Energy Inc.
“- Pacific Gas and Electric Co
“- PGE Energy Services
“- Automated Power Exchange
“- Citizens Electric

More information is available on this web site, and also check www.ferc.gov for more reports.

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The Clarion Energy Content Team is made up of editors from various publications, including POWERGRID International, Power Engineering, Renewable Energy World, Hydro Review, Smart Energy International, and Power Engineering International. Contact the content lead for this publication at Jennifer.Runyon@ClarionEvents.com.

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