Dynegy, West Coast Power Announce $3M Settlement with FERC Over Western Market Manipulation
Two Dynegy Inc. subsidiaries and the four companies that comprise West Coast Power, a 50-50 joint venture between Dynegy and NRG Energy Inc., announced Monday that they had reached a settlement with FERC staff concerning alleged manipulation of western energy markets in 2000 and 2001.
Under the terms of the settlement, which still needs final approval from the Federal Energy Regulatory Commission, Dynegy and West Coast Power agreed to pay approximately $3 million, which would be put into a fund established at the U.S. Treasury for the benefit of California and western electricity consumers.
The California Independent System Operator (Cal-ISO) had alleged that several energy merchants, including Dynegy and West Coast Power, had manipulated the wholesale power markets during the western energy crisis of 2000-2001 (see Daily GPI, March 23, 2001). FERC launched an investigation into the allegations, and for the past two years, it has sorted through the myriad of charges against all of the current and former marketers (see Daily GPI, Oct. 20, 2003).
In reaching a settlement with the FERC staff, Dynegy and West Coast Power neither admitted nor denied violating the rules or tariffs of the Cal-ISO. Dynegy manages fuel procurement and trading activities on behalf of West Coast Power.
The settlement would bring closure to the FERC staff's litigation regarding trading strategies in western energy markets addressed in a show cause order issued by the agency in June 2003. However, Monday's settlement did not include the pending refund proceedings involving Dynegy Power Marketing and West Coast Power.
Dynegy and West Coast Power said in a statement that they "continue to cooperate with all investigations related to the 2000 and 2001 western energy markets."
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