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DJ Calif PUC Unlikely To Order Refunds From Pwr Generators
Copyright , 2000 Dow Jones & Company, Inc.



(This article was originally published Thursday)


     LOS ANGELES (Dow Jones)--The California Public Utilities Commission 
likely won't order generators to refund billions of dollars in windfall 
profits from last summer's wholesale power price spikes to utilities and 
customers, commissioners told Dow Jones Newswires Thursday.

     A Republican commissioner said the PUC knows generators are manipulating 
the wholesale power market in California but the commission doesn't have the 
"expertise in-house to figure out who it is and how it's being done."

     "Even if we could force refunds, it would take five to 10 years in court 
to decide if generators should refund money," the commissioner said. "I don't 
think the state is willing to spend the money or the time."

     In addition, the commission is nowhere near deciding whether Edison 
International (EIX) unit Southern California Edison and PG&E Corp. (PCG) unit 
Pacific Gas & Electric can pass on a combined $5 billion in debt to their 
ratepayers, the commissioner said.

     A decision won't likely be made until mid-2001, the commissioner added.

     Only PUC President Loretta Lynch and Commissioner Carl Wood support 
having generators refund windfall profits to utilities and ratepayers. The 
commission's investigation, one of two ongoing probes into the state's 
troubled wholesale power market, has been unsuccessful in finding evidence 
that would force generators to refund billions of dollars, according to 
documents obtained Thursday by Dow Jones Newswires.

     Last week, federal regulators determined generators didn't manipulate 
the market. But they did find flaws in the state's market structure and said 
rates were "unjust and unreasonable."

     The state's Independent System Operator and Power Exchange have also 
concluded they have no evidence to prove generators manipulated the market in 
order to drive up wholesale power prices.

     The commissioner said the PUC doesn't support the utilities' efforts to 
pass on $5 billion in wholesale power costs to ratepayers.

     The commissioner said "if it came down to deciding tomorrow, the 
utilities would be left holding the bag."

     PG&E and SoCal Edison pay about 16 cents a kilowatt-hour for wholesale 
power. But the utilities charge their customers far less under a 
state-mandated rate freeze.

     As reported earlier Thursday, SoCal Edison President and Chief Executive 
Officer Stephen Frank said the utility's inability to immediately recover 
more than $2 billion in debt from its ratepayers may force the company to lay 
off employees and reduce major capital spending.

     PG&E filed a lawsuit in federal court Wednesday asking a judge to allow 
the utility to pass on $3 billion in debt to its customers.

     -By Jason Leopold, Dow Jones Newswires; 323-658-3874; 
mailto:jason.leopold@dowjones.com
     (END) Dow Jones Newswires 10-11-00