Let’s hope this results in lower energy prices for everyone.
State wins new look at power contracts
By Dale Kasler - Bee Staff Writer
Published 12:00 am PST Wednesday, December 20, 2006
State officials won another legal battle over the California energy crisis Tuesday when the courts ordered U.S. regulators to take a fresh look at long-term electricity contracts signed at the height of the crisis.
The decision gives the state another crack at an estimated $1.4 billion in refunds, according to the decision by the 9th Circuit U.S. Court of Appeals.
"This is a very important decision," said Erik Saltmarsh, executive director of the California Electricity Oversight Board.
For years California has been tangling with power generators and the Federal Energy Regulatory Commission over $8.9 billion in alleged overcharges for electricity purchased by the state on the spot market. The state has recovered about $5.5 billion.
Tuesday's decision, by contrast, involves the huge volumes of electricity the state bought under long-term contract. Then-Gov. Gray Davis signed the contracts during the spring of 2001, when prices were soaring and Californians were enduring rolling blackouts. The contracts were designed to calm the market and ensure a reliable flow of electricity.
In all, the state signed more than $40 billion worth of contracts, said Gary Ackerman of the Western Power Trading Forum, an association of electricity sellers.