FERC has approved an offer of settlement that calls for Williams Cos. Inc. to pay California’s three largest utilities approximately $140 million to resolve claims and refunds arising from the company’s sale of electricity and natural gas to the state during the market crisis of 2000-2001.

The settlement resolves the Tulsa, OK-based diversified gas and power company’s liability in the ongoing California refund case, energy sales to the state during the pre-refund period (prior to Oct. 2, 2000), sales to the California Department of Water Resources (CDWR) and the Commission’s investigation of charges that the company withheld capacity and engaged in anomalous bidding, said FERC spokesman Bryan Lee.

“Approval will also avoid further costly litigation, eliminate regulatory uncertainty and bring to a close a number of disputes stemming from the California market disruptions of 2000-2001,” the July 2 settlement order said [EL00-95-104].

The settlement calls for Williams to make payments to cover three periods of time: $107.2 million for the period of Oct. 2, 2000 through Jan. 17, 2001; $10.5 million in refunds from Jan. 18, 2001 through June 20, 2001; and $8 million from May 1, 2000 through Oct. 1, 2000.

In addition, the settlement provides for a payment of $11.5 million to Pacific Gas and Electric (PG&E), Southern California Edison and Sempra Energy’s San Diego Gas & Electric for the “release of certain existing and potential civil and regulatory claims against Williams,” the order noted.

A spokesman for California Attorney General Bill Lockyer said the latest settlement with Williams was “another step forward, but we still have miles to go.” He is continuing to pursue criminal and other legal actions against energy companies who manipulated the California market during the 2000-2001 period.

The Williams’ agreement also would create a $10 million “surplus account” to be funded by Williams and held in escrow until the refund claims of all non-settling participants are finally resolved and refunds to them, if any, are paid, or until the Commission allows Williams to terminate the account and withdraw any remaining funds. Because the $10 million amount will be held in escrow, it was not included in the $140 million estimate.

Any other parties to the refund proceeding who have claims against Williams can opt into the settlement, according to FERC’s Lee.

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