FERC last Monday signed off on a settlement agreement reached over the summer by several California parties, Commission staff and a joint venture of Dynegy and NRG Energy, which will hand over a total of $281.5 million resolving numerous contested claims stemming from western electric energy market transactions that occurred between January 2000 and June 2001.

Specifically, the Oct. 25 order approves a settlement agreement reached in late June by West Coast Power LLC — a 50-50 joint venture between Dynegy and NRG — and Pacific Gas and Electric Co., Southern California Edison, San Diego Gas & Electric Co. and various state agencies.

As part of the settlement, West Coast Power will assign all of its receivables — $259 million plus interest — from the California Power Exchange and the California Independent System Operator to the settling parties for ultimate distribution to all market participants. It will also place a total of $22.5 million, which includes a $3 million settlement with FERC announced on Jan. 20 from West Coast Power-generated cash into escrow accounts for distribution to various California energy purchasers.

Dynegy noted that the settlement does not cover civil litigation related to the California energy markets in which Dynegy and West Coast Power are, or may be, defendants. Nor does it cover the pending appeal of a FERC ruling regarding the validity of the current contract between West Coast Power and the California Department of Water Resources.

“The FERC’s approval puts behind us a significant amount of litigation and allows us to focus on our priorities in California, which include contributing to a reliable electric supply and collaborating with the state to build an energy infrastructure that will provide long-term benefits to all stakeholders,” said Dynegy Chairman Bruce Williamson.

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