I am told that due to the lack of settlement the Judge will recommend a refund based on a proxy MCP wherein there will be a daily or hourly heat rate multiplied by a DAILY gas price + O&M.  Emission costs would be justfied on a generator-specific basis.

The refund would only look at transactions 2 Oct. 00 - 19 June 01.  Note that refund orders have already come out so presumably this recommendation would  lead to a modification of  those existing orders. 

The modifications proposed to the June 19 order affect the refund caculation only; this does not change anything to the current mitigation rules.

To reiterate: the judges recommendation is just that and FERC has not yet ruled fromally.

More news to come.

Alan Comnes

US FERC-Ordered Calif Power Talks End Without Agreement

07/09/2001 
Dow Jones Energy Service 
(Copyright (c) 2001, Dow Jones & Company, Inc.) 

WASHINGTON -(Dow Jones)- Federally mediated negotiations between the state of California and power providers ended Monday without an agreement settling the state's demand for refunds for alleged overcharges. 

Throughout the fast track 15-day settlement conference California remained steadfast in its demand for $8.9 billion in refunds. But power providers offered a total of $716.1 million, according to the federal mediator overseeing the talks.

U.S. Federal Energy Regulatory Commission Chief Administrative Law Judge Curtis Wagner said at the close of talks Monday that he will recommend that the commission use its June 19 price-mitigation order to retroactively determine refunds due dating back to Oct. 2, 2000. Such an approach is expected to result in a total refund far less than the nearly $9 billion sought by the state. 

The FERC ordered settlement conference "set the balls rolling," Wagner said. "In 15 days you can't work miracles," he said of the unresolved negotiations. 

Wagner said he would recommend that FERC order a fast-track hearing of 60 days or less to address the disputed issues unresolved by the talks. He also said he would recommend alterations in the June 19 orders pricing methodology to address "problems" involving power plant heat rates, natural gas pricing and the cost of emissions permits. 

Of the total $716 million in refund offers cited by Wagner, the so-called Big 5 Power Generators in California had offered $510 million. The remainder included $125 million offered by BC Hydro's Powerex, $49.6 million by a group of 15 power marketers, $16.5 million by six California municipal utilities and $25 million offered by "load serving entities" outside California. 

"Many of the offers of settlement could with time result in an agreement," Wagner said. 

Wagner also noted that California came "close to settlement" with Calpine Corp. (CPN) during the negotiations. Calpine Vice President Joe Roman told reporters that the agreement with California was "close to gelling."



 

Copyright ? 2000 Dow Jones & Company, Inc. All Rights Reserved.