CPUC sees market abuses, claims overcharges
California regulators told FERC in a filing they have sufficient evidence of 
market power
abuse to warrant additional investigation.
In response to FERC,s request for comments on proposals to repair California,
s wholesale
power market, the California Public Utilities Commission (CPUC) also argued 
retail electricity
consumers had been overcharged by up to $4 billion by independent 
generators.  The CPUC
did not name any specific generator.

&The CPUC,s preliminary staff analysis * conducted under similar conditions 
of imperfect
data and inadequate time * suggests that claims of tight supply and increased 
costs, while
real, are overstated and explain less of the increased costs than FERC staff 
concludes,8 the
CPUC says.

The CPUC,s filing cites FERC,s own assertion that California,s wholesale 
market structure
provided the opportunity and potential for market power abuses. However, the 
CPUC disagrees with FERC,s conclusion that insufficient evidence exists to 
prove actual abuses occurred.  Claiming that FERC,s own investigation into 
market manipulation was incomplete, the California regulators charge &that 
market power played a much greater role in the summer,s prices than appears 
to be acknowledged in the [FERC] Staff Report.8

California regulators, conducting their own investigation into market power 
abuses, examined
the impact of increased costs due to higher-than-normal natural gas prices, 
as well as
increased expenses related to obtaining limited environmental permits.
&The CPUC,s preliminary analysis shows that as much as $4 billion of 
[California Power
Exchange] costs are attributable to market power for the period between June 
and September,8 the state regulators reported. &FERC should set hearings on 
this issue.8

More generally, the CPUC criticized FERC,s Nov. 1 order, claiming that it 
&fails to provide
meaningful relief to Californians who ( have spent billions more for power in 
recent
months than ever before, paying prices that are not justified on the basis of 
industry costs or
any other measure.8

In addition, the CPUC,s comments on the major aspects of the FERC report were 
similar to
those of other market participants also filed last Wednesday. The CPUC said 
FERC should take
interim measures to allow for immediate price relief for California 
consumers, that the $150/
MWh &soft cap8 suggested in the order would not hold prices down effectively, 
and that fines on purchasers that do not forward contract the majority of 
their load were one-sided.