Reliant and Mirant Settle with FERC; AG Files to Dismiss Similar Agreements

In the largest settlement in the latest round of federal regulators' investigations into the gaming of the California market, Reliant Resources agreed to pay $50 million. A couple of days earlier, the Federal Regulatory Energy Commission reached a $332,411 deal with Mirant. In the Reliant settlement, FERC concluded that the energy company had no intent to manipulate gas prices and kept its market based rates in place. The agreement put an end to nearly all of FERC?s investigations into Reliant?s trades during the 2000-01 energy debacle, except the ongoing refund proceedings. Reliant appeared relieved by the October 2 settlement, stating it ?must assume responsibility for its actions.? Reliant intends to set ?a standard of excellence based on the ideal of corporate responsibility,? said Joel Staff, Reliant chair. As part of the deal, Reliant also agreed to offer 824 MW of capacity from its California plants into the market for the next three years or until the cost exceeds $25 million. This agreement does not include the cost of gas to fuel the facilities. The deal Mirant reached with FERC covered profits the company could have made during the energy crisis for cutting non-firm energy, circular scheduling, load-shifting and paper trading. ?We don?t believe we?ve done anything wrong,? Doug Miller, Mirant senior vice president, said in a statement. The company claims the September 30 settlement, however, will keep it from spending more money litigating the matter. The Federal Energy Regulatory Commission demanded that 43 companies show cause why the profits they made during 2000-2001 should not be deemed illicit. Concurrently, the California Attorney General?s Office filed objections to a batch of 27 settlements and dismissals proposed earlier by FERC staff in the ?show cause? phase of the matter, claiming the deals are bad for state ratepayers. ?We are protesting FERC?s continuing efforts to basically conduct a fire sale,? said Tom Dresslar, spokesperson for the attorney general. The tentative deal the AG takes most issue with is an $836,000 settlement with Reliant for double selling of ancillary services, which is not covered by the October 2 FERC settlement. The state is also balking at the proposed dismissal of FERC?s case against the Los Angeles Department of Water and Power for a slew of market-gaming strategies In the case against Mirant, FERC found no merit to the ?false imports? charge. This scheme involves sending power out of state?at least on paper?parking it, and then sending it back to drive up prices. Another Mirant issue, double-selling services, will be addressed in a different proceeding. Federal regulators? case against Mirant for alleged market gaming, unlike other cases, had been postponed because of the company?s current bankruptcy protection. Most of the other claims were settled in late August, with many agreements amounting to five-digit figures. Morgan Stanley Capital Group, however, was nicked for $857,000 at the time, and Reliant was hit with a similar six-digit dollar amount. Earlier, Mirant had maintained that its bankruptcy court proceedings in Texas allowed it to postpone settling, although it had reached an agreement in principal with FERC staff two months ago. In the other recently settled cases, the state attorney general continues to take issue with FERC?s ?piecemeal approach??deciding one by one claims that prices charged during the volatility of the energy crisis were unreasonable. ?The piecemeal approach does not lend itself to justice for California ratepayers,? Dresslar said. The AG also asserts that FERC?s definition of gaming is too narrow. FERC Settlements to Date Major fines and settlements with energy traders and sellers in recent years include: October 2, 2003: $50 million to be paid by Reliant for gaming strategies. September 2003: $332,000 paid by Mirant for potential profits for cutting non-firm power, circular scheduling, load shifting, and paper trading. August 2003: 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 Williams Energy. July 2003: $15.5 million for El Paso Electric. FERC also suspended its market-based rate authority for over two years. January 2003: $13.8 million settlement between federal regulators and Reliant Energy for withholding energy from the grid. December 2002: $417 million settlement with Williams by the California attorney general. July 2002: $122 million in penalties levied by the California Independent System Operator for not following dispatch orders. Dynegy, Reliant, and Williams received the harshest judgments. April 2002: $6 million AG settlement with Calpine on enforcement issues. April 2002: $2.5 million AG settlement with Constellation on enforcement issues. March 2001: $124 million in refunds granted by FERC through Cal-ISO for bids over the price cap. April 2001: $8 million settlement between FERC and AES/Williams on withholding. July 1999: $57 million in payments made to suppliers beginning in 1999 rescinded by Cal-ISO for failure to dispatch.

Over 11K Stories!

| Independently Powered Energy News

Reliant and Mirant Settle with FERC; AG Files to Dismiss Similar Agreements

vdharadmin

Related Posts

Utility Regulators to Approve PG&E’s $2B in Forecast Costs

PacifiCorp to Join ISO’s Proposed Expanded Day Ahead Market, Adding Regional Grid Momentum

Solar Developers Say Finding that Southeast Asia PV Panels Are Dumped Harms U.S. Solar Growth

PG&E Agrees to Nonprofit Corp. Overseeing Rural Lands