FERC last Thursday approved a series of settlement agreements previously hammered out between Commission staff and four power companies, as well as a city in California, resolving allegations that the power-related entities tried to game California’s electricity market in 2000-2001. Under the settlements, the power companies and the California city will pay a total of $141,834.

Specific gaming-related settlements approved by the Commission include cases involving the city of Redding, CA; American Electric Power Service Corp. (AEP); Puget Sound Energy (PSE); Williams Energy Services Corp.; and San Diego Gas & Electric Co.

To the extent that the settlements are contested, FERC’s draft orders note that the amounts of money being returned are not just the profits, but the total revenues from the particular transactions, and thus more than could be achieved had those cases gone to hearing.

Under the settlements, payments to be made by the power companies and Redding break out as follows: AEP, $45,240; Williams, $45,230; San Diego Gas & Electric, $27,972; PSE, $17,092; and Redding, $6,300.

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.

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.

FERC on Thursday also signed off on a series of staff-recommended motions to dismiss involving several entities previously cited in the gaming and partnership orders.

FERC staff had argued that upon closer examination of the evidence, these entities — 23 of them in the gaming practices proceeding and eight in the partnership gaming proceeding — did not in fact either engage in impermissible gaming practices or did not in fact engage in impermissible gaming practices through partnerships, alliances or other arrangements.

Entities covered under these motions to dismiss include, among others, Arizona Public Service Co., Automated Power Exchange, Bonneville Power Administration, California Department of Water Resources, Constellation Power Source, El Paso Merchant Energy, Idaho Power Co., Koch Energy Trading and Sempra Energy Trading Corp.

At the same time, FERC used its regular agenda meeting to deny requests for rehearing that had been filed in response to the show cause gaming and partnership orders issued on June 25, 2003. The rehearing requests primarily urged FERC to expand the reach and scope of the proceedings, but the draft order issued by FERC found these arguments unpersuasive.

In addition, FERC denied rehearing requests made in response to a previous order in which the agency revoked the various Enron power marketers’ and gas marketers’ electric market-based rate authority and natural gas blanket marketing certificates. The rehearing request by Enron principally argued “that the Commission cannot and should not revoke their electric market-based rate authority and their natural gas marketing certificates,” a FERC staff member noted.

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