Thirty-three California Democrats in the U. S. House of Representatives Thursday asked the Federal Energy Regulatory Commission to reconsider an administrative law judge’s proposed ruling that the state was owed $1.8 billion in refunds from alleged wholesale electricity overcharges in 2000-2001. FERC Judge Bruce Birchman made his determination last month, drawing heavy criticism from state officials from the governor on down.

For California officials who have long-argued the state is owed about $9 billion in refunds, the judge’s proposed decision would conclude the state actually owes about $1.2 billion to various suppliers collectively because the refund determination would be offset by unpaid charges totaling $3 billion that are still owed since the crisis crippled California’s two principal private-sector utilities financially. State lawmakers sent a letter to FERC saying this outcome is unacceptable, urging the federal regulators “in the strongest way possible to increase substantially the refund recommendation.”

California Democratic lawmakers argued that the FERC judge was unable to consider evidence that would have meant higher refunds, including Enron Corp.’s internal trading documents describing attempts to drive up western wholesale power prices during the period. Evidence at a particularly vulnerable time before October 2000 was not allowed for consideration, they pointed out.

“At the very least, Judge Birchman’s proposed findings are incomplete because they do not reflect consideration of the full scale of corruption in the California energy market,” the congressional Democrats said. “The [FERC’s] instruction failed to allow the consideration of information that was discovered after the instructions were handed down.

“Since July 2001, we’ve learned [and we continue to learn] a great deal about the malfeasance that influenced the price of energy in California and the West. If this information had been a factor in Judge Birchman’s findings, it would have led to a higher proposed refund.”

Citing six “allegations and admissions of market manipulation” since last May, the Democratic California House members noted that natural gas indexes, considered vital to determining wholesale electricity prices, may have been manipulated, but the FERC ALJ did not consider this evidence, casting “serious doubts” about accuracy of the judge’s recommended decision.

“Given the manipulation of energy supplies and prices in the West, it is unacceptable for the Commission to approve findings that will leave Californians in debt to the energy suppliers that gouged them,” the lawmakers said in their letter addressed to FERC Chairman Patrick Wood.

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