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Federal Judge Dismisses California AG Suit Against PNM, Powerex

May 1, 2006
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A federal court judge has dismissed a lawsuit filed by the California attorney general claiming Public Service Company of New Mexico (PNM), a utility subsidiary of PNM Resources, and other power sellers used manipulative practices to inflate California energy prices in 2001, PNM Resources reported last Thursday.

In a recent order, U.S. District Judge David F. Levi denied the California attorney general's motion to remand the case to state court, where it was originally filed, and granted motions to dismiss by PNM and Powerex, a subsidiary of BC Hydro. The suit also was filed against 100 other unnamed power sellers.

In dismissing the lawsuit, the judge referenced several previous federal court rulings and agreed that FERC has "exclusive control over every aspect of the sale and transmission of wholesale energy." The ruling, filed April 14 in U.S. District Court in California, is the latest in a series of federal court decisions affirming FERC's sole jurisdiction over the transmission and pricing of wholesale energy in interstate commerce.

PNM noted that the California attorney general could appeal the decision to the Ninth Circuit Court of Appeals, which also has previously ruled FERC has exclusive jurisdiction in determining the reasonableness of wholesale electric prices.

FERC previously cleared PNM in all of its investigations into alleged misconduct by power companies during the California crisis. In July 2005, FERC dismissed PNM from its final investigation after finding no evidence that PNM engaged in gaming partnerships or shared any unjust profits with other companies. The FERC ruling came two months after the attorney general's suit.

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