[BETA] Fortnightly

Fortnightly

PX Chargebacks. As a stopgap measure, the Federal Energy Regulatory Commission (FERC) directed the California Power Exchange to rescind all prior "chargeback" actions attempting to assess unpaid liabilities of PG&E and Southern California Edison Co. to other PX participants, and to refrain from any such future actions, pending the outcome of other judicial and administrative actions.

The FERC said it would await a decision of Edison's state court complaint alleging that it is not in default of its PX participant's agreement, on the theory that its failure to pay PX liabilities arose because of "uncontrollable forces." (See also, "Power Bill Paid?" Public Utilities Fortnightly, Apr. 1, 2001, p. 4.) Also, the FERC will wait for the outcome of the complaint filed by the Power Exchange before a California state claims board, seeking compensation for the action by Gov. Gray Davis in issuing executive orders that commandeered the outstanding financial rights of PG&E and Edison regarding block forward contracts in the PX market.

Nevertheless, the FERC then muddied the water by expressing an apparently gratuitous opinion that the chargeback provision in the PX tariff "was not designed to address [a] default of this magnitude." Docket Nos. EL01-29-000 et al., et al. 95 FERC &61,020, Apr. 6, 2001. (em B.W.R.

California Gas Imports. Denying a complaint filed a year ago by the state of California, the FERC ruled that El Paso Natural Gas Co. did not act improperly when it entertained bids on pipeline capacity rights for delivery of natural gas into southern California and eventually awarded the rights to its own corporate affiliate, El Paso Merchant.

At the same time, however, the FERC opened an investigation to study whether El Paso had acted in a way to drive up the price of natural gas at the California border, after hearing reports of statements by El Paso officials that suggested that the company contemplated taking actions to gain greater control over the market. Docket No. RP00-241-000, 94 FERC & 61,338, March 28, 2001. (em P.C.

QF Avoided Costs. Though the state lost its complaint at the FERC regarding allocation of pipeline capacity rights for imports of natural gas (see above), the California PUC still found a way to reiterate its arguments about gas price manipulation for imports into southern California.

It did so by saying that it would switch to using the price of gas arriving at the Oregon border, rather than the Arizona border (the interface with El Paso Natural Gas), to calculate the avoided cost of natural gas as an element of rates for electricity sold to electric utilities by qualifying cogeneration and small power production facilities. Decision 01-03-067, R. 99-11-022, March 27, 2001 (Cal.P.U.C.). (em P.C.

Price Conspiracies. On March 20, the cities of Los Angeles and Long Beach filed separate lawsuits in Los Angeles Superior Court, alleging that Southern California Edison, PG&E, and San Diego Gas & Electric Co. violated state antitrust law by allegedly attempting to manipulate natural gas prices. (em L.A.B.

DTE + MCN. The Federal Trade Commission (FTC) OK'd the merger between DTE Energy and MCN