Sempra Energy Trading has agreed to a tentative settlement of $7.2 million with the Federal Energy Regulatory Commission (FERC) for allegedly gaming California?s wholesale electricity market during the energy crisis. The October 31 deal was for far less than the nearly $30 million the California Independent System Operator (CAISO) estimated as the cost of Sempra?s megawatt laundering and ancillary services paper trades (a.k.a. ?Get Shorty?). FERC staff found that Sempra Trading did not engage in parking power out of state in order to import it back at higher costs in transactions with the Eugene Water & Electric Board or the Public Service Company of New Mexico during the investigation period of May through October 2000 (a.k.a. ?ricochet? or ?megawatt laundering? transactions). CAISO reported earlier this year that Sempra Trading made a net profit of $13 million for ?Get Shorty? transactions in which ancillary services were traded but the actual services were either inflated or unavailable. By comparison, Enron Power Marketing, which coined the phrase, was reported to have made less than half that amount, $5 million, on ?Get Shorty? trades that drew national ire. The official response from Sempra Trading senior vice president Michael Goldstein matched off-record accounts of the deal?that it was far cheaper to settle than pursue litigation. ?We did not engage in improper market activities,? he said. Sempra was the only utility with an affiliate on the side of potential gaming while Southern California Edison and Pacific Gas & Electric have been seeking refunds from traders, such as Sempra. This settlement, as well as a dozen others pending, still needs to be approved by the FERC board. FERC spokesperson Bryan Lee would not hazard a guess as to when those decisions would be forthcoming. <b>Federal Energy Regulatory Commission Settlements to Date</b> Major fines and settlements with energy traders and sellers include: <b>October 31, 2003:</b> $2 million for Sempra Energy Trading, largely for settling allegations of ?Get Shorty? transactions: selling ancillary services where none may have existed. <b>Early October 2003:</b> $50 million for Reliant Resources to settle most gaming allegations. <b>September 2003:</b> $332,000 for Mirant for potential profits for cutting non-firm energy, circular scheduling, load-shifting, and paper trading. <b>August 2003:</b> About $2 million in total settlements with American Electric Power, Aquila, Morgan Stanley Capital Group, PacifiCorp, Portland General, Puget Sound Energy, Reliant, Redding, San Diego Gas & Electric, and Willams Energy. <b>July 2003:</b> $15.5 million for El Paso Electric along with FERC suspending its market-based rate authority for more than two years. <b>January 2003:</b> $13.8 million settlement between FERC and Reliant Energy for withholding energy from the grid. <b>December 2002:</b> $417 million settlement with Williams by the California attorney general for investigations and lawsuits. <b>July 2002:</b> $122 million in penalties levied by the California Independent System Operator for not following dispatch orders. Dynegy, Reliant, and Williams got the harshest judgments. <b>April 2002:</b> $6 million AG settlement with Calpine on enforcement issues. <b>April 2002:</b> $2.5 million AG settlement with Constellation on enforcement issues. <b>March 2001:</b> $124 million in refunds granted by FERC through CAISO for bids over the price cap. <b>April 2001:</b> $8 million settlement between FERC and AES/Williams on withholding. <b>July 1999:</b> $57 million in payments made to suppliers beginning in 1999 rescinded by CAISO for failure to dispatch.