PG&E, Edison Issue Ultimatums to FERC
In emergency requests filed last week, Pacific Gas and Electric
(PG&E) and Southern California Edison delivered strongly-worded
ultimatums to FERC - either suspend the authority of sellers to
charge market-based rates in the out-of-control California bulk
power market by a certain deadline, or they would take their cases
to the Circuit Court of Appeals in Washington D.C.
PG&E asked the Commission to act by "no later than the close
of business on Dec. 21," while Edison called on FERC to reply by
Dec. 20. FERC responded to the urgent requests with a customary
tolling order, which essentially gives it 30 days to consider the
utilities' requests. If the Commission fails to act within that
time period, the requests will be "deemed denied."
PG&E's emergency filing seeks rehearing of the Dec. 15 order
in which FERC attempted to overhaul the flailing California power
market by allowing utilities to keep their power rather than having
to purchase supplies on the spot market [EL00-95-005]. But PG&E
contends the fixes fell far short of what's needed. The
Commission's action "fails to correct [the] dire situation" in
California, as the market continues to "spiral out of control, with
massive transfers of wealth and dislocation occurring daily."
Edison also petitioned for rehearing of the Dec. 15 order,
charging that the Commission "abdicated" its responsibilities under
the Federal Power Act (FPA) by not setting "just and reasonable"
prices for power sold in the California wholesale market. Instead,
FERC "permitted sellers to charge whatever the market will bear in
a market that the Commission found to be dysfunctional."
PG&E criticized the Commission for retaining "market-based
rates and market-based pricing authority while the overwhelming
evidence demonstrates that the market is incapable of restraining
the market power of sellers of power in California."
FERC has failed to protect consumers as required under the FPA,
the utility said, adding that this is "legal error, plain and
simple." This alleged dereliction, when combined with the
California Public Utilities Commission's freeze on retail rates,
"has already caused, and continues to cause, irreparable harm."
Edison echoed many of these same claims. PG&E and Edison
separately urged the Commission to require immediate
cost-of-service filings for all sellers wishing to sell electricity
in the state. Moreover, they called on FERC to make all power sales
into California subject to refunds, the amount of which would hinge
on "just and reasonable" rates to be determined later by the
Both companies cited their lack of cash flow to pay their bills.
This "relief is necessary to stave off grave injury to PG&E
and electric consumers served by PG&E," the utility said.
"PG&E is rapidly using up its cash reserves, and is uncertain
whether those reserves can be replenished to allow payment of
Likewise, Edison said FERC's failure to implement the
requirements of the FPA "has now pushed [it] to the brink of
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