Commission reports to Congress on refund case status;
notes final refunds affected by $6.3 billion in settlements
The Federal Energy Regulatory Commission, in its response to the
energy crisis that affected California and other Western states
in 2000 and 2001, has facilitated more than $6.3 billion in settlements,
and brought to a close all but one of 60 investigations of market
manipulation, the agency said in a report submitted to Congress
today.
The report noted the Commission's response to the energy crisis
in California and the West would have been different if the agency
had the civil penalty and market manipulation authority provided
by Congress in the Energy Policy Act of 2005.
"The Commission lacked the necessary statutory authority to respond
more robustly with meaningful civil penalties and express anti-manipulation
authority. The Commission played a weak hand rather well, in my
opinion," commented Commission Chairman Joseph T. Kelliher.
The Commission expressed its frustration with how long the California
Refund Proceeding is taking to conclude, while providing an explanation
regarding the complexity of the proceeding - made more complicated
by extensive litigation, including more than 100 petitions for
review of Commission orders arising out of the California and
Western energy crisis.
The report also noted that the final refunds will be affected
by settlements reached with California parties, which among other
things settled the refund obligations of several large electricity
generators. Further, the extent of the Commission's final refund
order was limited by a recent appeals court decision barring the
Commission from ordering refunds by government-owned utilities,
which accounted for about 30 percent of sales in California in
2000 and 2001.
"No one can dispute that the California Refund Proceeding has
gone on far too long. The lack of closure contributes to uncertainty
in California - some refunds are still owed and owing; investment,
and recovery of that investment, is unclear; and the state of
the transmission grid and electricity markets remains vulnerable,"
the Commission report said.
"The Commission and its staff have worked diligently with the
California parties (and others) to address the many issues in
the California Refund Proceeding, to reach settlements, and to
address flawed rules that were in place in the California ISO
electric energy markets during the California energy crisis; and
we remain committed to doing so to ensure that there is not a
repeat of the California crisis," the report said, noting the
California ISO has experienced 12 system emergencies since the
crisis ended in June 2001.
Bringing closure to the refund case is a clear priority, but not
at the expense of due process, the Commission said. "It is very
important that the Commission-adopted procedures for addressing
refund issues strictly adhere to the due process principles, to
ensure that the Commission's determinations withstand judicial
scrutiny on due process grounds. Otherwise, we may have to revisit
decisions already made, which could delay the issuance of refunds
by years. We are committed to progressing as quickly as the law
will allow," the Commission reported to Congress.
The report, The Commission's Response to the California Electricity
Crisis and Timeline for Distribution of Refunds, was prepared
and submitted to Congress as required under the Energy Policy
Act of 2005.
R-05-96
(30)
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Contact
Information:
Bryan Lee
Telephone: 202-502-8680 |
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