Gray Davis, California’s ever-persistent governor, last week received a response, but no commitment from FERC Chairman Patrick Wood in answer to two recent letters reinforcing Davis demands for wholesale power cost refunds and extended western wholesale electricity price caps.

Wood committed to making the governor’s letters of May 23 and June 6 parts of the records of pending cases at FERC for which he could make no commitment as to the outcome. Coincidentally, the FERC chairman was the subject of a long profile recently in the San Francisco Chronicle, in which the current president of the California Public Utilities Commission, Loretta Lynch, a vocal critic of FERC, praised Wood for taking “an incredibly courageous stand” in supporting the western states wholesale price mitigation measures a year ago.

“The reason the [wholesale] prices came down [in the West] was Pat Wood, and the June 19, 2001 [FERC] order,” Lynch said in the Chronicle profile. “And that saved the California market.”

Nevertheless, Lynch and the head of the statewide utility consumer group TURN (The Utility Reform Network) voiced skepticism about whether Wood will continue to “reform” FERC and give California all that it is requesting, particularly the refunds.

Without promising anything at this point, Wood told Davis in his letter that FERC “is moving aggressively to investigate potential market manipulation in California and the West.” The fact-finding investigation is “time-consuming” but will ensure FERC has a complete record and has “conducted extensive analysis on which to base any findings.”

Wood said he could not comment on the issue of the price mitigation measures, which are scheduled to expire Sept. 20 because the California Independent System Operator (Cal-ISO) has a market redesign proposal now before FERC with a specific request to extend the western wholesale price mitigation measures.

“Please be assured that the Commission will take all necessary action to maintain just and reasonable rates in California’s wholesale power markets,” Wood wrote to Davis, acknowledging he could “understand [the governor’s] frustration with the amount of time” the proceedings at FERC are taking. Davis had no immediate response.

In the Chronicle profile, Lynch indicated she is worried that Wood “is stalling on big California rate cases — as well as the refund and long-term contract cases” — pending before FERC. She said she thinks Wood is “incredibly committed to reforming the agency, and it needs to reformed, and I don’t think he’s going to put up with the level of fraud that the past FERC has been intentionally blinded to, but whether he is going to do the right thing now is another big question.”

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