FERC last Wednesday signed off on a settlement agreement reached last year between Powerex and FERC staff resolving allegations that the power supplier attempted to manipulate California and western electricity markets in 2000-2001. The BC Hydro power marketing subsidiary has agreed to pay $1.3 million as part of the settlement.

FERC on June 25, 2003 issued an order finding that a number of identified entities appeared to have participated in activities that constituted gaming and/or anomalous market behavior in violation of the California Independent System Operator (CAISO) and California Power Exchange (PX) tariffs during the relevant period — Jan. 1, 2000 through June 20, 2001.

This order indicated that Powerex appeared to have engaged in the trading strategies of false import, cutting non-firm, circular scheduling, load shift, paper trading and scheduling service on out-of-service lines in violation of the CAISO and PX tariffs and protocols.

On the same day, FERC issued an order alleging that various power entities may have participated in gaming practices through the use of partnerships, alliances or other arrangements in violation of the CAISO and PX tariffs during the same time period.

The partnership order alleged that Powerex may have entered into an alliance with Enron for the purpose of facilitating joint gaming practices and that Powerex may have jointly engaged in gaming practices through a parking arrangement with Public Service Company of New Mexico.

Powerex and FERC trial staff last year jointly submitted a settlement agreement as a full and final resolution of all issues set for hearing.

FERC also recently approved about $1.9 million in settlement agreements with six power companies. The companies settling under the approved agreements were Morgan Stanley ($857,089), Reliant Resources ($836,000), Portland General Electric ($12,730), Aquila Merchant Services ($75,975), Idaho Power ($83,373) and PacifiCorp ($67,745).

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