Posted on 10/23/2002 8:32:57 AM PDT by snopercod
WASHINGTON, Oct 1 (Reuters) - The Federal Energy Regulatory Commission ordered the bankrupt California Power Exchange to return to Constellation Energy Group Inc. all except $10 million in collateral posted by the company several years ago to trade wholesale electricity.
Neither FERC nor Constellation identified the amount of money to be returned to the Baltimore-based utility. However, the order was issued in response to Constellation's recent request that FERC "significantly" reduce its collateral held by the California Power Exchange.
"This is a significant decision for us. It frees up money for us to use for other purposes," a Constellation spokeswoman said.
FERC said the California Power Exchange could keep $10 million of the collateral posted by Constellation to cover the potential refunds that may be ordered in the commission's long-pending California electricity overcharge investigation.
"Our decision in this order is in the public interest because it will help to increase liquidity in the financial markets, allow Constellation to obtain financing, ensure that Constellation meets its outstanding obligations, and ensure that the ultimate California Power Exchange creditors are paid," FERC said in an 8-page order issued Monday night.
"This order will also promote regulatory certainty and facilitate industrywide uniformity," FERC added.
The California Power Exchange was launched in March 1998 under the state's failed power deregulation legislation. The state's investor-owned utilities were initially mandated to buy all the electricity they needed through the exchange.
Federal regulators terminated the requirement for utilities to buy their power from the power exchange in December 2000 and the two largest, PG&E Corp subsidiary Pacific Gas & Electric and Edison International unit Southern California Edison, stopped using the exchange in January 2001.
The utilities ran up billions of dollars of debt as prices for electricity in the wholesale market soared in 2000 and early 2001. A price freeze imposed under deregulation laws prevented them from collecting their costs from customers.
Southern California Edison failed to pay an invoice for $214 million issued by the California Power Exchange in mid-January 2001. The following month, Pacific Gas & Electric declared it would default on more than $1 billion owed to the exchange.>
The Pasadena, California-based exchange filed for bankruptcy in March 2001 and a month later Pacific Gas & Electric filed for bankruptcy.
The California Power Exchange continues to hold in segregated accounts about $1 billion of collateral, including letters of credit, surety bonds and cash posted by market participants.
The exchange is also holding about $1.2 billion in its settlement clearing account.
Both California utilities opposed Constellation's request, contending that the amount of the Baltimore firm's refund liability could not be determined until the refund proceeding ended.
However, FERC said that the $10 million remaining with the California Power Exchange was a "conservative estimate" of what could be needed to pay refunds.
FERC Commissioner William Massey filed a dissenting opinion, saying he disagreed with returning money to Constellation.
"There is still too much uncertainty regarding these markets to place much confidence in an estimate of the potential refund liability of Constellation," Massey wrote.
The Constellation case is pending before FERC in docket EL02-63. The overall California refund case is in docket EL00-95.
So! Now we know how much money California has witholding from the "gougers", many of whom have never even been paid for the electricity they provided to california.
Who are the real gougers, eh?
The exchange is also holding about $1.2 billion in its settlement clearing account.
Yes, indeed those greedy power price gougers are now turning out to be instruments of the State of California government! That's over two billion in money that is sitting in the PX's accounts.
My oldest son goes to Pepperdine. We stayed at a motel in Calabasis (sp?) not far from the Malibu Canyon Road. This allowed us to spend some time with our son. We flew in and out of Burbank Airport. There was an art-crafts fair in Old Town Pasadena on Sunday that my wife thought would be fun to see prior to our going to the airport. It was a pretty short trip from the motel to Old Town and then a quick hop to the airport.
I confess, I was playing tourist! I was also driving a rental car and contributing to air pollution. Please forgive me.
I do have this to say, the air pollution on Sunday in Glendale was something else! My wife and I talked quite a bit about that. I have been quite vocal in my past complaints about who stupid some of the air pollution regulations are. If what I saw happens regularly, I can now understand why politicians would be willing to do stupid things, just so they can stay they are "trying to do something" even if it is harming the local economy and endangering power reliability. I still don't agree with the specifics of the air pollution regulations, but I can understand the political motivation to do something even if it is a dumb something that harms as much or more than it helps.
| To find all articles tagged or indexed using Calpowercrisis, click below: | ||||
| click here >>> | Calpowercrisis | <<< click here | ||
| (To view all FR Bump Lists, click here) | ||||
I'll ping the list.
Memories:
California Power Crisis animations featuring Governor Gray Davis
AND......................
...to see what bad, bad things Davis has done... - CLICK HERE
calgov2002:
 calgov2002: for old calgov2002 articles. calgov2002: for new calgov2002 articles. Other Bump Lists at: Free Republic Bump List Register |
Here we go loop-it-e-loo buying Dumbocrat screw-up POWER BONDS!!!
I hope some major headlines show up to remind everyone who is responsible!
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.