FERC staff on Friday moved to clear San Diego Gas & Electric Co. (SDG&E) and Aquila Merchant Services Inc. of charges that they tried to manipulate California’s electricity markets in 2000-2001. Meanwhile, bankrupt Mirant Corp. disclosed it is closing in on finalizing its own settlement with FERC staff aimed at resolving gaming allegations levied against the generator.

The action follows similar, separate settlement agreements filed in recent days by FERC staff and Portland General Electric and American Electric Power (see Power Market Today, Aug. 29, Aug. 28).

FERC in June 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.

FERC trial staff and SDG&E at the end of the week filed a proposed settlement agreement with FERC Administrative Law Judge Carmen Cintron. FERC staff and the utility said that in order to bring this proceeding to “swift and certain closure,” 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.

Meanwhile, Aquila Inc. on Friday said that its wholly-owned subsidiary, Aquila Merchant Services, has entered into an agreement with FERC trial staff to settle charges that the company allegedly was involved in the manipulation of western power markets during the region’s 2000-2001 energy crisis.

Aquila said that the $75,975.42 settlement is designed to avoid litigation costs to prove that Aquila Merchant Services’ energy trading practices were proper and in full compliance with the FERC regulations and standards. The settlement amount is based on the total revenue associated with the transactions in question.

Aquila “strongly believes” that the allegations against Aquila Merchant Services “do not have any merit” and that Aquila Merchant Services’ trading activities did not violate any tariff, regulation or statute or adversely affect market prices.

In related news, bankrupt Mirant Corp. on Wednesday asked FERC to give it additional time to file a response to the show cause decision. Mirant said that it has reached a settlement in principle in the proceeding with FERC staff, but does not expect that settlement language will be fully drafted prior to the Sept. 2 deadline.

This move drew howls of protest from several California entities, namely the California Electricity Oversight Board, the California Public Utilities Commission, Pacific Gas & Electric, Southern California Edison and the state attorney general.

“Although Mirant claims to have reached a settlement in principle with Commission staff, an offer of such settlement has yet to be filed, much less seen by other participants in this proceeding, such as the California parties,” the state officials and utilities collectively said in an Aug. 29 filing.

“If indeed such a settlement does exist, the California parties expect to oppose such a partial settlement,” the California entities said. “A ‘settlement’ process that entirely excludes the very customers that were harmed by the actions of Mirant’s gaming in the California energy markets is no settlement at all.”

The California parties said that it “seems unlikely in the extreme that Mirant could have agreed to relief coming anywhere close to redressing the problems that Mirant has caused through its numerous unlawful actions.”

In related news, FERC staff made separate filings at the Commission on Thursday asking the federal agency to dismiss gaming allegations previously made against Sierra Pacific Power Co. and the city of Riverside, CA.

FERC staff has also recently moved to dismiss gaming allegations made in the show cause order against Tucson Electric Power Co., Public Service Co. of New Mexico, Cargill Power Markets, the Salt River Agricultural Improvement and Power District and the city of Anaheim, CA.

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