FERC Administrative Law Judge (ALJ) Curtis Wagner, who is overseeing settlement talks between generators and California officials related to the renegotiation of long-term wholesale electricity deals, last Thursday confirmed to the full Commission that settlements in principle have been reached with four sellers He is “optimistic that many, if not all” of an additional eight power suppliers involved in the talks will be able to reach settlement as well. Several offers and counteroffers between California and the eight sellers are “global in nature” and would resolve all pending claims, including those in a refund case pending at FERC and in the California state courts.

Wagner’s report to the Commission comes on the heels of a meeting held earlier this month with energy firms in Sacramento for confidential settlement talks related to the possible renegotiation of long-term wholesale power supply deals valued in the billions of dollars.

More recently, the ALJ last week told mainstream news outlets that four settlements had been reached as a result of the talks. He confirmed in the status report submitted to FERC “Settlements in principle have been achieved with four sellers which are currently being reduced to writing,” Wagner told FERC.

In addition, Wagner disclosed that “significant offers and counteroffers” have been exchanged between California and eight individual sellers. “Several of these offers are global in nature and would resolve all pending claims, including those in the refund case and those in the California state courts.” Negotiations with these sellers are being “actively pursued” by Wagner, California and the involved sellers, he said, with all of the parties holding regular telephone conferences to resolve differences.

While he is optimistic concerning the eight parties, the ALJ noted that there are two other sellers “who do not have offers on the table and it does not appear that settlement is a viable option for them.”

Wagner said that because of the progress that has been made and continues to be made towards settlement, he has scheduled further settlement conferences and meetings with all parties in Washington, DC, on Aug. 5-6. Moreover, in light of FERC’s “strong desire” that an initial decision in these proceedings be issued by the end of the year, Wagner will schedule a hearing or hearings for early October, for those sellers who have not finalized a settlement in principle by the close of the settlement conference on Aug. 6. “Unless the Commission desires that [Wagner] continue the settlement negotiations and delay the date for the issuance of an initial decision.”

California wants to renegotiate about three-quarters of its $43 billion worth of long-term supply contracts, signed last year with over 20 energy firms at the height of the state’s electricity crisis. In a February filing with the Commission, the state alleged that energy firms overcharged it up to $21 billion.

Earlier in the year, the California Department of Water Resources and four other suppliers renegotiated about $11 billion of the contracts, the bulk of which were with San Jose, CA-based Calpine Corp.

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