A group of California power generators — led by Reliant, Williams, Mirant and Dynegy — last week asked FERC to either extend the deadline for comments on whether to reduce the wholesale natural gas costs used in calculating power refunds to the state, or postpone the proceedings related to California’s request for $8.9 billion in refunds until the gas issue is settled.

The request came two days after the Commission, saying that published spot gas prices at the California border during the western energy crisis were suspect, issued a request for comments on a proposal to base the gas cost component of the mitigated market-clearing price (MMCP) for power on Southwest gas basin prices and regulated transportation costs, rather than on the high prices for gas delivered to California that existed during the 2000-2001 crisis (See related stories). FERC last Tuesday asked for comments to be filed within 30 days, but the California generators are seeking an additional 30 days [EL00-95-045, EL00-98-042].

“The gas-price issue on which the Commission has requested comments has serious ramifications for all parties in this case and will require the attention and resources of the parties,” the California energy suppliers said, adding that the “outcome of the gas price reevaluation will bear directly on the potential refund liability” to be paid by energy companies. However, they noted that most of them currently were focused on a hearing to be held Monday (Aug. 19) in San Francisco to address the power refund issue.

The simplest and most “prudent” course of action would be for FERC to delay comments on the gas-price issue, the companies said in their emergency request. They asked the agency to act on their request last Thursday. But at press time Friday, the Commission had not responded to their plea.

California regulators, state Attorney General Bill Lockyer, the California Electricity Oversight Board and two investor-owned utilities asked the Commission to deny the request, pointing out the crucial role the gas component will play in calculating refunds for the state. “This fact alone is significant reason to proceed as expeditiously as possible to a conclusion on the gas-price issue.”

Nor, the California parties said, should the refund hearing in San Francisco be postponed. “The parties have expended an enormous amount of time, effort and expense in preparing for hearing, and it would be manifestly unjust to suspend the hearing on the eve of its commencement.”

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