CPUC Carves Up Huge Potential El Paso Refunds

In the biggest settlement to date over disputed energy costs, the California Public Utilities Commission on October 30 divvied up the $1.5 billion pot in potential refunds from El Paso Corporation as a result of litigation and investigations. California could reap about $1 billion of the refund pie, with $425 million earmarked for the California Department of Water Resources. The pending settlement between El Paso and several state attorneys general, DWR, and the CPUC, among others, would resolve a host of complaints and lawsuits against the power company for alleged gas and electricity overcharges during the energy crisis. The deal would also resolve a dispute between the California Electricity Oversight Board, the commission, and El Paso over the company?s long-term contracts with DWR. ?One billion [dollars] will ultimately benefit California ratepayers,? said commissioner Susan Kennedy before the unanimous vote. Along with funds for DWR, investor-owned utilities? ratepayers would see about $600 million. DWR will use the money to reduce power costs. ?It is money that we don?t have to collect from ratepayers and will reduce our contract costs,? said DWR spokesperson Oscar Hidalgo. The reduction will be reflected in the yearly revenue requirements, he added. On the electricity side, Pacific Gas & Electric customers would reap $210 million, while Southern California Edison ratepayers would pick up $195 million. San Diego Gas & Electric customers would gain $60 million. On the gas side, residential customers in PG&E territory would reap $75 million, Edison customers would pocket $36 million, and SDG&E customers would see $29 million. Outside of California, Southwest Gas customers would see $5 million. El Paso offered $900 million in cash to be paid over a 20-year period, a $125 million reduction in its long-term contracts with DWR, and $352 million in up-front cash. It will also turn over about $227 million in proceeds from stock. The settlement must be approved by the Federal Energy Regulatory Commission and state and federal courts.

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CPUC Carves Up Huge Potential El Paso Refunds

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