posted on Monday, August 29, 2005 10:44 AM by Andrea Robinson

FERC Scurries to Conclude California Refunds Case

With an order issued August 8, FERC has stepped up its efforts to bring to a close the four-year-old refund proceeding that grew out of the 2000-2001 California energy crisis.  The order clarifies how generators and other suppliers should seek to prove the costs they incurred in supplying power to the California ISO ("CAISO") and the California Power Exchange ("CalPX") during the refund period (October 2, 2000 through June 20, 2001) exceeded the mitigated market clearing price established by FERC.  These suppliers now have detailed guidelines as to the types of data they need to provide to support their cost claims.  Once they make showings of the costs incurred to make each sale into the CAISO or CalPX, and the revenues received from all of those sales, any difference between costs and revenues will act as an offset to refunds that California owes to the suppliers.

The California complainants – primarily state government agencies and large investor-owned utilities had argued that FERC should require the sellers to make the cost and revenue calculations for all sales that they made throughout the Western Electricity Coordinating Council.  FERC disagreed and instead endorsed the position of sellers that they need only make these calculations for sales made into the CAISO and CalPX markets.  In addition,  FERC will allow marketers to retain a ten-percent return on their trades.   

To hasten the case's conclusion, FERC convened on August 25 a technical conference to create a uniform template for submitting cost and revenue data. Sellers must submit their cost-based recovery claims by September 10, and FERC intends to issue an order on the filings by November 15.  [San Diego Gas & Electric Company v. Sellers of Energy and Ancillary Services into Markets Operated by the California Independent System Operator and the California Power Exchange Corporation, et al., 112 FERC ¶ 61,176 (2005)] [UPDATE]