Legal due-process questions and procedural shortcuts may eventually undermine the ultimate decisions by the Federal Energy Regulatory Commission in its pending California energy market manipulation cases, according to two attorneys representing Pacific Northwest energy companies with stakes in the federal proceedings. They spoke Thursday at a two-day industry conference, “Buying and Selling Electric Power in the West,” in Seattle.

The added 100 days in the California refund case and 70 days for a similar Pacific Northwest case don’t allow parties to respond if they are accused of wrongdoing in the market, said Peter Burger, an attorney with Bonneville Power Administration.

FERC has questionably brought in public sector energy providers in the California and western refund cases, using the legal theory that it is only asserting its jurisdiction over “transactions” between public sector entities and FERC-regulated organizations, such as the California Independent System Operator (CAISO).

“The implications for the Pacific Northwest generally and BPA specifically are huge,” Burger said. “Does this mean non-jurisdictional organizations doing business with the proposed RTO West are subject to FERC regulations?”

Ultimately, FERC’s handling of all of the nine investigations and 20 complaint proceedings now pending may have the effect of having two-and-a-half to five years of work sent back to the regulators by a federal appellate court that finds due-process has been violated by the federal regulators, said Phil Chabot, a Washington, DC-based attorney, representing Puget Sound Energy in its price complaint case.

Because FERC has “upended or ignored its own rules; it has frustrated its own investigations,” Chabot said. “This has major policy, economic and political implications for the way FERC conducts its business.”

Chabot said FERC could have saved a lot time and trouble early in the California reaction process, setting what were “fair and reasonable rates” for gas and electricity, and then arguing over that in determining who is owed what.

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