A FERC administrative law judge (ALJ) last week recommended that the full Commission approve settlement agreements separately reached between FERC trial staff and San Diego Gas & Electric Co. (SDG&E) and American Electric Power (AEP) resolving allegations that the two utilities tried to manipulate California’s power markets in 2000-2001.

The settlement agreements were filed by FERC staff and the two power companies in August (see NGI, Sept. 1).

FERC, in a June 25 order, formally initiated show cause enforcement proceedings against an estimated 60 energy marketers, as well as municipal and investor-owned utilities, for allegedly gaming the California Independent System Operator (CAISO) and Power Exchange (PX) more than two years ago. Violators would be required to return any profits stemming from the questionable activities. The suppliers cited in the order were directed to respond to the show cause actions by Sept. 2.

In the June 25 order, FERC alleged that SDG&E may have engaged in so-called “cutting counter-flows” and “circular scheduling” trading practices. As for AEP, the Commission determined that the company engaged in congestion-related practices in violation of the CAISO’s market monitoring and information protocol, such as cutting non-firm and circular scheduling or “Death Star.”

Under its settlement, SDG&E has agreed to pay $27,972 to “fully and finally resolve all issues and claims” related to the company in the proceeding. SDG&E admits “no wrong,” the agreement noted. AEP will pay $45,240 under its settlement, but “does not admit that the allegations set forth in the show cause order have any merit, or that during the relevant period in this proceeding any of AEP’s trading activities violated any governing tariff, regulation or statute, or adversely affected the price formation process.”

In separate actions on Thursday, FERC ALJ Carmen Cintron certified the settlements to the full Commission and recommended that FERC approve the agreements.

Meanwhile, also last week, FERC staff asked the full Commission to toss out allegations that Southern California Edison Co. engaged in a number of gaming strategies during the California energy crisis of 2000-2001.

The Edison International subsidiary had been ordered by FERC to show cause why it did not engage in three gaming practices — the congestion-related practices of cutting non-firm and circular scheduling and the ancillary services-related practice of paper trading.

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