Williams 'Forgives' $137 Million

While dollars cannot yet be counted in the pockets of California consumers, another settlement over alleged market manipulation means utilities may owe less money to Williams Energy. The settlement approved by the Federal Energy Regulatory Commission July 2 calls on Williams to forgive $137 million of the $262 million it claims it is owed by the state's investor-owned utilities from transactions through the now-defunct California Power Exchange. About $17 million remains uncommitted "as we work out the remaining small issues," according to Williams spokesperson Brad Church. This is the second Williams settlement over gaming allegations?the first was for actual dollars and some turbines, totaling more than $400 million. The settlement was reached right after FERC's two days of secret settlement talks last week. According to Church, the two sets of discussions were not connected. FERC authorized the release of funds in the PX's escrow account. Because the PX remains in bankruptcy court, some parties to the settlement questioned whether the commission is permitted to order the PX to release escrow account funds. "Clearly, the CalPX bankruptcy plan envisions and provides for commission-ordered distribution from the settlement clearing account," noted regulators. Governor Schwarzenegger's office had no comment on the settlement. Federal Energy Regulatory Commission Settlements to Date Major fines and settlements with energy traders and sellers include: July 2, 2004: Forgiving $137 million that Williams Energy claims it was owed by California utilities. Utilities to transfer more than $100 million sitting in escrow at the former California Power Exchange to Williams. May 2004: $14,304 settlement with Modesto Irrigation District. March 2004: $1.9 million with Aquila, Idaho Power, Morgan Stanley, PacifiCorp, Portland General, and Reliant. Also in March, $1.3 million settlement with Powerex. January 2004: $3 million from a Dynegy/NRG Energy joint venture for alleged 2000-01 market manipulation. The venture, West Coast Power, is set to pay into a U.S. Treasury fund for California and other Western consumers. Another January case adopted settlements with American Electric Power, Puget Sound, Redding, San Diego Gas & Electric, and Williams for $141,834. November 2003: $7.9 million for Coral Power, proposed by commission staff. Also in November 2003, the commission approved a $1.6 billion settlement for allegedly withholding gas supplies, causing electricity prices to rise during the energy crisis. October 2003: $7.2 million for Sempra Energy Trading, largely for settling "Get Shorty" allegations?selling ancillary services where none may have existed. Also in October 2003, $50 million for Reliant Resources to settle most gaming allegations. September 2003: $332,000 for Mirant for potential profits for cutting nonfirm deliveries, circular scheduling, load-shifting, and paper trading. August 2003: About $2 million in total settlements with AEP, Aquila, Morgan Stanley Capital Group, PacifiCorp, Portland General, Puget Sound Energy, Reliant, Redding, SDG&E, and Williams. July 2003: $15.5 million for El Paso Electric; FERC suspended its market-based rate authority for more than two years. January 2003: $13.8 million settlement between FERC and Reliant Energy for withholding energy from the grid. December 2002: $417 million settlement with Williams by the California attorney general for investigations and lawsuits. August 2002: $8.5 million with Portland General; another $75,000 from Avista to the U.S. Treasury. Avista also had to adopt a compliance report. 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. Also in April 2002, $2.5 million AG settlement with Constellation on enforcement issues. March 2001: $124 million in refunds granted by FERC through CAISO 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 CAISO for failure to dispatch.

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Williams ‘Forgives’ $137 Million

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