Double Taxation Repeal: Fire or Ice?
California Property Seizures. Showing problems stemming from defaults on power purchases, Tucson Electric complained to FERC that California Gov. Gray Davis violated federal law in two Executive Orders issued Jan. 31 (D-20-01, D-21-01). In those orders, the Governor barred the California Power Exchange from liquidating certain contract interests and instead commandeered as state property certain block forward "matches" representing power purchased transactions conducted through the PX by Southern California Edison Co. and Pacific Gas & Electric.
- Alleged Illegal Acts. Tucson Electric claims injury, as it sold power to the California utilities through the PX, but says the Governor's orders prevent the company from gaining access to collateral as security for the losses. The Arizona utility claims the transfer of the PX contract interests required FERC approval under Federal Power Act section 203 because the PX qualifies as a "public utility" under the Act. Tucson Electric also claims that by jeopardizing its right to collect payment for power sales through the PX, the Governor's action violates the filed rate doctrine, since PX market prices set by PX computer algorithms represent valid FERC-approved utility rates that carry force of law.
- Suggested Remedy. At a minimum, Tucson Electric asked the FERC to force the state of California to step into the shoes of Edison and PG&E and assume financial:
"Specifically, this would entail the assumption of Edison's and PG&E's full extent of indebtedness to the PX, generators and independent suppliers, including any debts PG&E and Edison may default on in the future."
Tucson added, "By seizing part of PG&E's and Edison's assets, without assuming responsibility for their liabilities, Governor Davis and the State of California have pushed the utilities closer to bankruptcy and eradicated any possibility that suppliers will be reasonably compensated for future deliveries."
Earlier, on Feb. 2, the PX had estimated the value of seized forward positions held by Edison at $651 million, representing 2.846 million MWh (average value equals $228.75/MWh). .-B.W.R.
Ameren Corp. has licensed Caminus Corp.'s Zai*Net Manager, Zai*Net Risk Analytics, and Zai*Net WeatherDelta products to address its energy trading, marketing, and risk management requirements. AmerenEnergy Inc., the power trading and marketing subsidiary of Ameren Corp., will deploy Caminus' Zai*Net Manager for deal capture, scheduling, and accounting, and Zai*Net Risk Analytics for risk management in its power operations.
Pantellos, an independent online marketplace for the utility and energy services industries, and, a provider of collaborative workforce management solutions, have entered into an exclusive partnership intended to further enhance Pantellos' integrated suite of supply chain capabilities. The partnership will enable Pantellos members to manage their contingent workforce, or staff augmentation requirements, and supplier relationships through a collaborative, web-based solution.
First Union Securities has provided financing for Universal Compression Inc. , a natural gas compression services company, to acquire Weatherford Global Compression . First Union's roles in the financing included: (1) sole lead arranger, asset-backed securitization; (2) administrative agent and sole arranger, senior secured revolving credit facility; and (3) co-lead manager, high-yield synthetic lease offering.
World Wireless Communications' XtraWeb subsidiary has signed a letter of understanding with Texaco