FERC yesterday ordered Williams Energy Marketing & Tradingand AES Southland Inc. to justify why they should not be found tohave violated the Federal Power Act (FPA) by engaging in actions todrive up power prices in the California bulk market and potentiallycompromising the reliability of the transmission network.

If Williams and AES are found to be in violation of the terms oftheir filed tariffs, the Commission could order the two companiesto return profits of more than $10.8 million from the April-Mayperiod last year, and could condition the companies’ futuremarket-based rate authority.

Williams and AES have 20 days to show cause why they shouldn’tbe held in violation of the FPA.

The Commission’s probe centered on the unavailability of certainso-called must-run generating units owned by AES Southland, whichis located in Orange County, CA. As a result of the units’unavailability, the California Independent System Operator(Cal-ISO) was forced to dispatch power from other AES generatingunits, where the power was more expensive, according to FERC.

In California, Williams markets power produced from twogenerating units owned by AES, Alamitos 4 and Huntington Beach 2.FERC said its investigation showed that Williams and AES appearedto have financial incentive to prolong outages from the twogenerating units to drive up prices.

FERC announced that it will conduct a formal, non-publicinvestigation into the operation, maintenance and sales of powerfrom the Alamitos and Huntington Beach facilities at other timesduring 2000 and 2001. Depending on the results, it said it mayissue more orders.

©Copyright 2001 Intelligence Press Inc. All rights reserved. Thepreceding news report may not be republished or redistributed, inwhole or in part, in any form, without prior written consent ofIntelligence Press, Inc.