Court Ruling Should Prod FERC to Order Refunds

Court Ruling Should Prod FERC to Order Refunds

Sep 14 - Daily Breeze

The checks aren't in the mail, nor are they likely to be anytime soon even should a federal court ruling stand. Even so, California ratepayers can take some consolation in the fact that the U.S. 9th Circuit Court of Appeals has held that they could be in line for $2.8 billion in refunds because of rampant price-gouging by suppliers during the energy crisis.

A three-judge panel correctly concluded that "the California energy market was subjected to artificial manipulation on a massive scale," while a timid Federal Energy Regulatory Commission turned a blind eye to the theft.

"It validates what California has been saying for nearly four years, which is FERC had the ability and the responsibility to order refunds back to May 2000 when the gouging and the gaming actually started," said South Bay State Sen. Debra Bowen, chairwoman of the Senate Energy, Utilities and Communications Committee.

"It's great news that California ratepayers may be eligible for nearly $3 billion in refunds, but we'll see whether FERC actually tries to do its job and has any luck squeezing money out of these companies four years after the fact," Bowen said.

It should be noted that the court stopped short of ordering refunds. Rather, it's up to FERC, which was maddeningly reluctant to move against the predatory companies that helped fuel the state's energy market meltdown.

That in itself should give pause to Gov. Arnold Schwarzenegger, who declared the ruling to be "fantastic" and state Attorney General Bill Lockyer, who hailed it as "a huge victory for California ratepayers."

In a perfect world, FERC would react to the court's ruling by fulfilling its regulatory responsibility to ensure that competitive market-based energy rates are the rule, not the exception. Having failed to protect California consumers against exorbitant price increases during 2000-01, the commission should see to it that they receive the refunds they now deserve.

For far more extensive news on the energy/power visit: http://www.energycentral.com .