A large collection of generators is pleading with FERC to act quickly on a series of complaints filed against them by Nevada Power, Sierra Pacific Power and Southern California Water Co. last year that asked the Commission to retroactively mitigate prices included in contracts entered into between the utilities and power sellers in 2000 and 2001.

The generators warned the federal agency that the longer it takes to act on the complaints, the greater the likelihood that power sellers will file so-called “ripple” refund complaints of their own to minimize any potential refund liability they may face while the complaints are pending.

At issue are a series of complaints filed by Nevada Power, Sierra Pacific Power and Southern California Water against a group of generators late last year at the Federal Energy Regulatory Commission. The bulk of the complaints were filed by Nevada Power and Sierra Pacific Power, with Southern California Water lodging a complaint against Mirant Americas Energy Marketing.

In their filings, Nevada Power and Sierra Pacific Power targeted: Duke Energy Trading and Marketing, Enron Power Marketing, Morgan Stanley Capital Group, Calpine Energy Services, Mirant Americas Energy Marketing, Reliant Energy Services, El Paso Merchant Energy, BP Energy Co., American Electric Power Services and Allegheny Energy Supply Co. LLC.

The complaints relate to the utilities’ contractual obligations to power sellers under contracts executed pursuant to the Western Systems Power Pool Agreement in late 2000 and early 2001.

Each of the complaints asserts that alleged dysfunctions in western spot markets at that time tainted prices for sale into forward markets, making the rates in the challenged contracts unjust and unreasonable because they are higher than forward market prices after mid-2001. In response, a number of generators earlier this year attacked the logic of the complaints on several fronts.

But the Commission has yet to act on the complaints as spring rapidly approaches and that has a number of generators involved in the dispute nervous.

Several of the targeted generators earlier this month asked FERC to act on the complaints by March 29. They also used the March 5 joint motion for expedited consideration as another opportunity to argue for a dismissal of the complaints.

“Granting the complaints will cause serious disruptions in forward markets in the West and elsewhere and could have adverse long-term impacts on the willingness and ability of market participants to enter into long-term contracts in the future,” the generators told FERC.

They emphasized the importance of the Commission ruling on the complaints as soon as possible. The generators said that “each day that the complaints remain pending means another day of potential refund liability” for generators whose power deliveries to Nevada Power, Sierra Pacific Power and Southern California Water have already commenced.

Power sellers facing accruing refund liability “may feel that they have no choice but to file such ripple complaints to preserve their rights if the Commission does not grant the relief sought by this motion,” the companies warned.

The generators said that the filing of ripple complaints would do “potentially irreparable damage” to forward markets in the West.

“Because potential refund liability is already accruing for some sellers and those sellers are facing increasing pressure to file their own ripple claim complaints to protect their interests, it is critical for the Commission to dismiss or reject the complaints as soon as possible to assure the market that the Commission will continue to respect the sanctity of contracts,” the generators added.

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