Federal energy regulators improperly calculated how much money energy companies should refund to California consumers, and the state should get another chance to argue for $2.8 billion in overcharges on electricity sales in 2000, an appeals court ruled Thursday.
Locally, Snohomish County PUD officials held up the court’s decision as a major victory in their fight to avoid paying Enron Corp. $122 million. Enron wants the cash as payment for the PUD’s decision to cancel an energy contract signed during the height of the 2000-01 West Coast energy crisis.
“Our position continues to improve,” said Eric Christensen, a PUD attorney. “This puts more pressure on Enron to settle.”
Federal regulators had taken the position that they couldn’t retroactively block Enron from collecting contract cancellation penalties even though it has been proven that Enron was intentionally manipulating the market at the time it signed its contract with the PUD.
In a long-fought victory for California Attorney General Bill Lockyer, the 9th U.S. Circuit Court of Appeals said the Federal Energy Regulatory Commission “abused its administrative discretion” when it declined to bill the power sellers for improperly reporting the wholesale rates they charged at the height of the energy crisis on the West coast.
Lockyer said the court agreed with California’s argument that “the watchdog was sleeping during the robbery, it failed to enforce its own rules, and it unduly restricted remedies for consumers with artificial chains.”
The quarterly reporting requirements at issue are the government’s main mechanism for regulating the power industry, but the safeguard “was, for all practical purposes, nonexistent while energy prices skyrocketed and rolling brownouts threatened California’s businesses and citizens,” the appeals court said.
The three-judge panel declined to order further refunds, but instead remanded the case to FERC for further proceedings.
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