Federal regulators asked California power producers and the grid operator to produce records today for a scheduled Monday settlement conference on proposed electricity refunds to California consumers.
A Federal Energy Regulatory Commission administrative law judge issued the request Thursday. The commission incorporated the settlement conference into its June 19 order extending price controls on wholesale spot power transactions to an 11-state region, including California.
The commission gave the ISO and the generators 15 days to reach an agreement on various issues, including refunds for alleged overcharges by the generators. California Gov. Gray Davis called for $9 billion in refunds during congressional testimony this week, and US Sen. Barbara Boxer (D-Calif.) introduced legislation demanding refunds if FERC doesn’t act.
Thursday, FERC said it was imperative for the parties to reach agreement on the additional load to be moved from the spot market to long-term contracts in California, creditworthiness matters, and refunds or offsets for electricity charges dating back to Oct. 2, 2000. If they cannot reach agreement, FERC commissioners have suggested power producers could face temporary revocation of their licenses to sell at market-based prices.
While the California Independent System Operator alleges generators have overcharged California $9 billion for power, the state’s independent power producers are also owed billions of dollars for power delivered for which they have never received payment.
FERC Chief Administrative Law Judge Curtis L. Wagner Jr. asked the ISO to recreate the last unit dispatch for every hour back through Oct. 2, 2000, for all gas-fired units.
Submit records, contracts
He also asked all power sellers to submit records showing the amount owed by the ISO, the now defunct California Power Exchange, and the California Department of Water Resources by month and how much each has paid since last October. Sellers were requested to submit their information according to product, including ancillary services, imbalance energy, and out-of-market sales.
Wagner requested all sellers and the state to submit a list of forward contracts showing terms and prices. In addition, he said, sellers must be ready to discuss how much short- and long-term generation they still have available for sale.
In his order, Wagner said all parties “must” send principals to the Monday meeting with “full” authority to approve and accept any matters agreed upon.
California’s electricity bills begun piling up last summer after wholesale prices skyrocketed and state investor-owned utilities operating under a retail rate freeze couldn’t collect the full amount from consumers. Under the state’s deregulation plan, most power was bought and sold on the spot market through the California Power Exchange.
Nearing insolvency, Southern California Edison Co., a unit of Edison International, Rosemead, Calif., and Pacific Gas & Electric Co., a unit of PG&E Corp., San Francisco, quit paying their wholesale power bills. In January, the Department of Water Resources (DWR) was authorized by the state legislature to begin buying power on behalf of the state’s three investor-owned utilities.
But generators have said they are still concerned about the DWR’s creditworthiness. To compensate for the credit risk, FERC allowed sellers in California to charge an extra 10% in its June 19 order.
Earlier this week, Gov. Davis issued an executive order authorizing the state to borrow up to $5 billion as a bridge loan to buy electricity, pending issuance of a record $13.4 billion in revenue bonds to replenish the general fund for electricity purchases. State Treasurer Philip Angelides Friday said the bonds will be sold in September or October rather than mid-August as previously forecast.