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Cal-PX Asks FERC for Guidance in Distributing $1 Billion of Collateral
In responding to a complaint from British Columbia-based Powerex to have its collateral returned, the defunct and bankruptcy-restricted California Power Exchange (Cal-PX) fired back last Tuesday asking FERC to set generic guidelines on the distribution of nearly $1 billion in collateral from about 30 energy merchant sector participants that is held under Cal-PX’s caretaker administration. Cal-PX has made this same request in two other individual collateral cases brought before the Powerex one.
“We’ve made the request of FERC in each one of these cases (the others involving Constellation Energy and PG&E Energy Trading),” said Lynn Miller, CEO of the caretaker Cal-PX. “We’ve asked FERC not to have this handled on a case-by-case basis, but give us some general guidelines that we could follow in handling these requests for distribution of collateral.
“We aren’t really opposing (or supporting) Powerex’s position; we just wanted to encourage the regulators to allow us to do it once, and do it for everybody.”
The collateral varies among the former power exchange participants, including letters of credit, surety bonds and cash.
In the meantime, Cal-PX’s request late last year for FERC to approve the exchange’s federal court-approved Chapter 11 bankruptcy reorganization plan has still not been acted upon, Miller said. FERC told Cal-PX last December that its filing for approval was deficient, and the power exchange and it participants committee (equivalent of a “creditors’ committee” in a traditional bankruptcy) submitted additional data in January. “That was the last we have heard from them on that issue,” said Miller, noting that when she tried to get FERC to commit to a timeline her request was rebuffed.
“That is not untypical with FERC,” Miller said. “They typically work at their own pace and don’t have a deadline they have to meet. They take as much time as they want to review these filings. I suspect this is a minor item on their plate, compared to the other California issues.”
The long-standing California refund issue is related to Cal-PX, although the bankruptcy reorganization plan doesn’t need to be approved for the PX to act in response to any refund order, Miller said. “We can effectively keep running the way we are,” she said. “The participants’ committee’s plan is to replace the Board of Governors of the current PX with their own new board of directors and their own management to continue to run the PX.”
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