California Gov. Arnold Schwarzenegger last week urged FERC to move forward expeditiously with resolving cases pending at the federal agency related to refunds due to the state from electricity overcharges during California’s electricity crisis in 2000-2001.

“Over four years have now passed since the crisis began,” Schwarzenegger said in his June 29 letter to FERC Chairman Patrick Wood. “Despite years of investigation, hearings and litigation, California has still not recovered the vast majority of overcharges incurred during the crisis.” Schwarzenegger said that “now is the time to resolve these cases and to help put California back on the path to prosperity.”

The letter was sent a day before FERC staff on Wednesday convened a meeting in Washington, DC, between various California parties and power suppliers aimed at resolving outstanding refund proceedings.

FERC last month noted that the California parties have committed to devoting extensive time and resources by their key personnel to pursuing settlements over the next three months. The California parties are: Southern California Edison Co., Pacific Gas & Electric, San Diego Gas & Electric, California Attorney General Bill Lockyer, the California Department of Water Resources, the California Public Utilities Commission and the California Electricity Oversight Board.

Representatives from each of the California parties were expected to be present at Wednesday’s settlement conference and the California parties intended to present a template for settlements with each of the entities that will owe refunds in the refund proceeding at FERC.

Bob Pease, a FERC staff member, noted at the start of the conference that “so far the parties have been able to negotiate two landmark settlements” involving Williams and Dynegy. Both settlements remain pending before the FERC.

Houston-based Dynegy and California officials in April reached a $281.5 million settlement over pending refunds that are part of the $9 billion the state has pursued from energy companies for more than three years through FERC and the courts.

Williams earlier this year agreed to refund $140 million to California’s utilities for alleged overcharges for power sales made during the state’s energy crisis in 2000 and 2001.

“We encourage the parties to resolve their differences, so that we can concentrate our efforts on improving markets in California and throughout the western United States,” Pease said. He said that the “key benefits” of settling now include refunds flowing back to customers, instead of “years from now,” as well as the elimination of attorney fees “and the continued drain of personnel resources for the litigation.”

Pease said, “We fully recognize that today is not going to end the controversy” related to the pending refund issues, but is rather a starting point for negotiations between the various parties. He also noted that “substantial progress” is being made towards settlement involving various suppliers that are expected to be announced in the near future.

“The Commission staff is willing to assist in any way that it can, whether to actively participate in the negotiations” between suppliers and the California parties “or in a less active role, depending on the wishes of the parties,” Pease noted. “Chairman Pat Wood has committed to whatever staff resources are necessary to help the parties resolve these difficult matters, so that the money can flow back to consumers in the West.”

Ken Alex, head of California Attorney General Bill Lockyer’s energy task force, told the conference that “We are committed to trying to resolve all matters, including potential civil claims that the attorney general and other entities may have. We think that we can do this through this process that we’re going to propose today.”

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