Ninth Circuit Nixes Muni Refunds

Potentially affecting up to $1 billion in possible refunds from settlements for energy crisis?era alleged manipulations, the Ninth Circuit Court of Appeals ruled that the Federal Energy Regulatory Commission has authority over investor-owned utilities, but not municipal and quasi-governmental utilities. The munis sued as a preemptive measure to avoid paying potential settlements. Calling it a "straightforward analysis," the court wrote that "FERC does not have refund authority over wholesale electric energy sales made by governmental entities and non-public utilities." The court set aside FERC?s potential orders for munis, remanding the issue to federal regulators. The munis affected by the decision include Anaheim, Azusa, Banning, the Bonneville Power Administration, Burbank, the Department of Water Resources, Glendale, the Los Angeles Department of Water & Power, the Modesto Irrigation District, the Northern California Power Authority (NCPA), Pasadena, Riverside, the Sacramento Municipal Utility District, the Turlock Irrigation District, Vernon, and the Western Area Power Administration. FERC argued that the legal issue was the subject matter - - the electricity sales themselves, and not which entity was responsible for the sales. But the court invoked the Federal Power Act's "unambiguous" exclusion of governmental and nonpublic entities from FERC?s refund authority. "The Federal Power Act was written in 1935 as a reaction to the abuses of Samuel Insull," said FERC spokesperson Bryan Lee. At that time, privately owned utilities were amassing corporate power and Congress was attempting to curb that hegemony over nascent public utilities. LADWP believes the decision opens the gate for the muni to be paid $166 million that it considers ratepayers still owe it for sales during the energy crisis. WAPA, which had been a scheduling coordinator for Redding and two Department of Energy labs, has less than $10 million in the balance, but it and others say that regulators and the former California Power Exchange are still trying to establish who owes what to whom. NCPA assistant general manager of legislative and regulatory affairs Jane Cirrincione wouldn't hazard a guess as to how much money could be involved in its role as scheduling coordinator for excess power from the Association of Bay Area Governments and the Utica Power Authority from in-state hydro projects. SMUD entered the fray, believing that it does not owe remuneration for sales during the energy crisis but that "others owe us," said Jim Shetler, assistant general manager, energy supply. FERC's Lee said that the recently passed federal energy bill recognizes federal regulators' authority over public entities going forward and that the remanded decision affects only past orders. However, NCPA's Cirrincione said that initial readings of the energy bill led her organization to believe that FERC's going-forward regulation would apply only to munis over a certain size and would exempt NCPA and smaller entities. The state Attorney General's Office, which is interested in keeping the munis in settlement negotiations, is weighing its options for responding to the ruling, according to spokesperson Tom Dresslar. The AG estimates that the potential loss to the state's coffers as a result of the court's decision is about $1 billion. However, that estimate includes settlements that have not occurred yet but are expected from an earlier time frame - - the "pre-October" span - - as well as Department of Water Resources direct purchases. "The two big refund issues are before the same court in California Public Utilities Commission v. FERC," stated Dresslar.

Over 11K Stories!

| Independently Powered Energy News

Ninth Circuit Nixes Muni Refunds

vdharadmin

Related Posts

Energy Commission Okays $24 M in Clean Energy Grants

Bills to Remove Barriers to California’s Clean Grid Goal Advance

SMUD Adds 100 MW of Geothermal to its Power Portfolio

CPUC Against Prop. 80