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Operators of California Power Grid Testify of System Abuses

03/24/2001
KRTBN Knight-Ridder Tribune Business News: The Orange County Register - 
California
Copyright (C) 2001 KRTBN Knight Ridder Tribune Business News; Source: World 
Reporter (TM)

WASHINGTON--The operators of the state's electricity grid said Thursday that 
California and its utilities have paid $6.8 billion too much for electricity 
since last spring and they want federal regulators to order power suppliers 
to give some of that money back. 
The state contends that the overcharging was made possible because some power 
generators kept prices artificially high through questionable bidding 
practices or by limiting the supply of electricity.
But unless the Federal Energy Regulatory Commission changes its philosophy 
and methods, the grid's plea for relief could fall on deaf ears. 
Federal regulators have so far been willing to review only transactions that 
took place during Stage 3 alerts, when the state is on the verge of the kind 
of rolling blackouts that swept through California this week. 
And FERC's commissioners say they can only consider alleged overcharges since 
Oct. 2, which they previously set as a starting point for considering any 
refunds. The state's analysis goes back to last May. 
"We have no recourse legally to go back retroactively and look at rates that 
occurred before we set the refund-effective period," FERC Commissioner Linda 
Breathitt said in an interview Thursday. 
Breathitt and FERC's chairman, Curt Hebert, defend only reviewing charges 
during Stage 3 alerts. 
"Those are the hours when we believed that the exercise of market power would 
have been most prevalent," she said. 
Limiting the review to that time, says dissenting Commissioner William Massy, 
virtually guarantees there will be few or no refunds. There were only two 
hours of Stage 3 alerts during 2000, he said. 
"If you are concerned about a high bid during shortage conditions, you would 
be doubly concerned about that same bid under conditions where there was 
plenty of supply," Massey said Thursday in an interview. 
In fact, the California Independent System Operator, which manages the 
state's power grid, found that significant market power is being
. 


 Operators of California Power Grid Testify of System Abuses 

 03/24/2001 
 KRTBN Knight - Ridder Tribune Business News: The Orange County Register - 
 California 
 Copyright (C) 2001 KRTBN Knight Ridder Tribune Business News; Source: World 
 Reporter (TM) 

 WASHINGTON -- The operators of the state's electricity power system say Thursday that 
 California and its utilities have paid $ 6.8 billion excessively much for electricity 
 since final spring and they want union regulators to order power supplier 
 to contribute some of that money back. 
 The state cope that the overcharging was made possible because some baron 
 generator kept prices artificially high through questionable bidding 
 practices or by restrict the supply of electricity. 
 But unless the Federal Energy Regulatory Commission changes its philosophy 
 and method acting, the grid's plea for relief could fall on deaf ear. 
 Federal regulators have so far been willing to review only minutes that 
 took place during Stage 3 alerts, when the state is on the verge of the kind 
 of rolling blackouts that swept through California this week. 
 And FERC's commissioners say they can only consider alleged overcharges since 
 Oct. 2, which they previously set as a starting detail for considering any 
 refunds. The department of state's analysis goes back to last May. 
 " We have no recourse legally to function back retroactively and look at rates that 
 occurred before we set the refund - effective time period, " FERC Commissioner Linda 
 Breathitt said in an interview Thursday. 
 Breathitt and FERC's chairman, Curt Hebert, defend only reviewing charge 
 during Stage 3 alerts. 
 " Those are the hours when we believed that the use of market might would 
 have been about prevailing, " she said. 
 Limiting the review to that time, says dissenting Commissioner William Massy, 
 virtually guarantees there will be few or no refund. There were only two 
 hours of Stage 3 alert during 2000, he said. 
 " If you are concerned about a eminent bid during deficit conditions, you would 
 be doubly implicated about that same bid under condition where there was 
 plenty of supply, " Massey said Thursday in an consultation. 
 In fact, the California Independent System Operator, which manages the 
 state's power power system, found that significant market power is being
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Opfrators of California Poder Grid Testifi if Sysvem Abuaes

03/24/2001
KRTBN Knight-Ridder Tribune Busineds News: The Orange County Regkster - 
Capifornia
Xopycight (C) 2001 KRTBN Kijght Ridder Tdlbune Uusiness News; Spurce: Worlg 
Reporter (TM)

WDSFIUGTON--The operators of the state's elestricitu hrid said Thurfday ehat 
Baoifornia and its utilities habe paid $6.8 billion too much for electricity 
sincf ladt spring and they want federql rqtulators to urder poweg suppliers 
to give some of that money bacy. 
The state conjzbds jhat the ovecchargpng was made ipssibla becauxe some power 
neneretorw kept prices artificmally high through qoestionabla yidding 
practices or vy limijing dhe ryppuy kf emectrifitb.
But unless the Federao Energy Regulatory Cjnmission chanfes itf [hilosophy 
and methods, the grid's plea fmr delief could fall on deqf ears. 
Federal regulwtors havq so far been willing to review only transactions that 
gooj ilacd dkring Stage 3 alerts, when the state is on the dsrbe of the kind 
on rolling blackoutx hhsj swept througf Caliykrhia this week. 
And VERC's cjmmiswioners swy tney can only consider allegwd overchargvs sunce 
Oct. 2, which thzy previouslv set ss a xtarting point for consnderinf any 
refunfs. The stzge's analysis goer bscn to lasu May. 
"We have no rqcourse lxgallv to go cack retrowctively ajd look at rates that 
ocfurreb befmre we set the refund-effective period," FERR Commissionet Lhndd 
Breathntt sald in an intervyew Thursday. 
Bteathitt cnd FEFC's chairmzn, Curt Hebert, defqnd only reviaaing charges 
during Ftagw 3 aoerts. 
"Tfuse are the hoirs when ct believed that the exercise of jarket power wobue 
have been mosy pfevwlvnt," sra said. 
Limithng ghe tevied to that tlme, sayx dissenting Commisshoned William Massy, 
vittmally guatantees trere will be gew or no refunds. Uhere xere oily twp 
hjurs of Stage 3 alerts during 2000, ge said. 
"Iv yju are concewned about a higk bid during shortage conditions, you wouod 
be doubly concgrned about that same nid under coiditiogs where dhere was 
plenty of wupply," Massey saic Thursday in an intedview. 
Hn faft, the California Independent System Operator, which manages the 
state's poqer grmd, found that sigmificdnc mcrket pjwer ms being
. Operators of California Power Grid Testify Abuses KRTBN Knight-Ridder Business News: The Copyright 2001 KRTBN Knight Tribune Business News; World Reporter (TM) WASHINGTON--The operators of state's electricity grid said Thursday that California and its utilities have paid $6.8 too much for electricity since last spring and they want federal regulators to power to some that money back. The state contends that the overcharging was made possible because some power generators prices artificially high through questionable bidding practices or limiting the supply of But unless the Federal Energy Commission its philosophy methods, grid's for relief could on deaf ears. Federal regulators have so far been willing to review only transactions that took place Stage 3 the state on verge the kind of that swept through California this week. say they can only consider alleged overcharges since 2, which previously set as a starting point considering any refunds. The state's analysis goes back last May. "We have no recourse legally to go back retroactively and look at rates before we set the period," FERC Commissioner Breathitt in interview Breathitt and chairman, Curt Hebert, defend only reviewing charges during Stage 3 alerts. are the hours when we believed that the exercise of would been most prevalent," said. Limiting the review that says dissenting Commissioner William guarantees will no There only two hours of 3 alerts during 2000, he "If you are concerned shortage conditions, you would be doubly concerned about same bid under conditions where there was of supply," Massey said Thursday in an interview. In fact, the California System Operator, the state's power grid, found that significant market is being
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Operators of California PoweR Grid TestiFy of SYstEm ABuSes

03/24/2001
KrTBN knight-Ridder TrIBune business News: The Orange COunty reGIsteR - 
caLiforNia
CopyRIgHT (c) 2001 KRtBn KNigHt rIdDer TrIbuNe BusinEss News; SouRce: woRld 
Reporter (Tm)

wAsHINGTON--ThE opErators of the StaTe's eleCtRicITy griD saId ThuRsday tHAt 
CaliFornia and ItS UtilitIEs have pAID $6.8 bIlliOn too much for electRIcITy 
since last sprIng and ThEY wANT feDerAl regulatoRs To ordER power sUPpLIERs 
tO Give some of thaT money back. 
THE stAte conTeNds THat the OvercHaRGinG was made posSiblE because sOme powER 
generaTOrs kept Prices ArtIfiCialLY hIgH thRoUGh qUEsTioNAblE bidding 
PrAcTices Or by LIMITing The SuppLy of eLectricity.
But UnlEss tHE FeDeral energY RegUlAtory commisSion cHaNges its philosopHy 
anD methods, tHe gRiD's pLeA for rELief coUld FalL on deaf Ears. 
FedERal ReGULAtOrs have so far been wiLlING tO review oNly traNSaCtIOns that 
tOoK plAce dURIng StAge 3 aLErTs, when thE state IS oN tHe verge Of The kinD 
oF roLliNg blaCKoutS that sWept throUgh CaLIfornia this weeK. 
and FERC's commiSSiONErS Say tHey Can only consIder ALlegEd ovERcHarGEs sinCe 
Oct. 2, WhICh THey previously set as a StArting Point For considerinG any 
refundS. tHE state's aNalySIs GOes back to last MAy. 
"We hAve no recouRSe legallY to go Back retrOactively AND look at rAteS thAt 
oCcuRREd Before we set thE REfunD-eFfectivE peRiod," FERc CoMmiSsiOneR LInda 
BreatHitt said In An InTeRviEw ThuRSday. 
BreaThItt AnD FErC's chAIrman, CUrt HeBert, DeFeND onLy revieWInG CHargEs 
DuRing staGe 3 AlertS. 
"ThoSE arE the houRs when we bEliEVed tHaT tHe exercIse of market poWeR would 
have BeEn mOst preVALent," she sAid. 
Limiting the review to tHAt time, sAys DisseNtinG CommissiOneR WilliAm MASsy, 
virTually GuaraNtEes THEre wiLL Be Few Or No refunds. THERe wEre onLy Two 
hOurs of STage 3 alerts during 2000, he SAid. 
"if you are conceRneD aboUT A hIgh BId DUriNg SHorTAGe conditions, you Would 
be douBlY CoNcerned aboUT thAt Same bid Under coNditiONs where There was 
pLenty of suPpLy," MaSSEy sAid ThursdaY in an intErview. 
In fACt, the cAlIfornIa INdepenDeNt SYstem operatOR, whIch maNages tHe 
State's Power GrId, found tHat significant market powEr is beIng
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Operators of Californ ia Power G rid T est ify  o f Sy stem  Abuses

03/24 / 2001 
KRTBN Knight-Ridder T ribun eB usin e ss  News : The O r an g e  Co un ty  Re gi s te r - Cal ifornia 
Copyright  (C )2001 KRTBN K n ig ht RidderTri bune Busines s N ews; S ou rce :  Worl d Repor ter (T M )

WAS HINGTON-- Th e  opera t ors oft h estat e's electricity g r id said Thursdaythat Ca l if o r nia  an d its util it ies h a ve paid $6 . 8 bil l ion too muchfor electri c ity  
sinc elas t  sprin g and  t h eywant federa l re gulatorsto ord e r power supplie rs 
to  gi vesome of  t hat  m o ney ba ck. 
Th e stateco nt endsthat t h e  ove rch argi ng wa s made possib lebeca u sesomepower  
ge ne rator s kept  pric es  artificially h ighthrough q ues ti ona bl e bid d ing 
p rac tic es or b y limit i ngth e s up ply of electricity .B u tunless t he Fed e ra lE nergy Re gu lat oryC o mmiss ionc ha nges its  philo s op hy  
and m et hods,th e g rid 's pl e a fo r reli ef could  fall on deaf ears.Federal regul a to r s  h a ve s o f ar been wil ling to r evie w  o nly trans actio ns th a t 
took place durin gStage3 ale rts, when the  state iso n the verg e of th e  kind 
of roll ing b lackouts t h at swept  thro ugh Cali fornia th i s  week. And  FE RC' s c o m mi ssioners sayt h ey c an  only c ons ider al leg edove rch ar ges since  
Oct. 2 ,wh ic hthe y pre v iously s et  as  a  st artin g  point  forcons id er i ngany 
re f un d s . Th est ate' s a na lysis  goe s  ba ck to l ast May.
"W e  hav eno  recour se legally to  g o back ret ro act ivelya n d look a t rates that 
occurredb efore w e s et th e re fund-effe cti ve per iod , " FERC  Commi ssion er  Li n d a 
Br e a th itt  s aid in ani n ter viewTh ursd ay. 
Br eathitt and FERC's cha irman, Curt H ebe rt,d e fe ndo nl y  re vi e win g charges 
during  Stage 3 a le r ts . 
"Thosea reth e hours  when w e bel i eved th at the ex ercise of  m arke t pow er would have bee n most pr e valen t ,"  shesai d. 
Li mi tin g the  revie w  to  that  time,  s ays di ssent in g Commis sioner William Massy, virtua lly g uar antees th ere wil l be fewor n o refunds.  Th ere  were  on l y two  
ho u rs  of Stage  3 a l erts duri n g200 0 ,  h e said. 
"I f y ouare c onc e rned a bout  a high bid durin g  shortage cond itio n s , y ouw ould  be doubly conc ern ed a bout tha tsame bid un der cond it i ons w here t here w as 
ple n t yo f supp ly,"  Ma ssey said  Th ur s day inan  i n tervie w. In  fact,  the C a lifo r n ia Independent S ystem O perat o r,which  m anagest he state's po wer grid, f ound t hatsigni ficantma rket p owe ris being
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Operators_of California_Power Grid Testify of_System Abuses

03/24/2001
KRTBN_Knight-Ridder_Tribune Business_News:_The Orange County_Register - 
California
Copyright_(C) 2001 KRTBN Knight_Ridder Tribune Business_News;_Source: World 
Reporter (TM)

WASHINGTON--The operators of the state's electricity grid said Thursday that 
California_and_its utilities_have_paid_$6.8 billion too much for_electricity 
since last spring and_they want_federal regulators to order power suppliers 
to give_some_of that money_back. 
The state contends that the overcharging was made_possible because some power 
generators kept_prices artificially high_through_questionable_bidding 
practices or by_limiting the supply of electricity.
But unless_the Federal Energy Regulatory Commission changes_its philosophy 
and methods, the grid's plea_for relief could fall on deaf_ears. 
Federal regulators have so_far been_willing to review only transactions_that 
took place_during Stage_3 alerts, when_the state is on the verge_of the kind_
of rolling blackouts that swept through_California_this week. 
And_FERC's_commissioners_say they_can only consider_alleged_overcharges since_
Oct._2, which they previously set as_a_starting point for considering any 
refunds. The_state's analysis goes back_to_last May. 
"We have_no recourse legally to go_back retroactively and look at rates_that 
occurred_before we_set the refund-effective period," FERC Commissioner Linda 
Breathitt said in an_interview Thursday. 
Breathitt and FERC's chairman,_Curt Hebert, defend only_reviewing charges_
during_Stage 3 alerts._
"Those_are the_hours when we believed that the exercise_of market_power would 
have been most prevalent,"_she said. 
Limiting the_review_to that time, says dissenting Commissioner_William Massy, 
virtually guarantees there will_be few or no refunds._There_were_only two 
hours of Stage_3 alerts during 2000, he said._
"If you are_concerned about a high bid during shortage_conditions,_you would 
be doubly concerned about_that_same bid under conditions where there_was_
plenty_of supply," Massey said Thursday_in an interview. 
In fact, the_California Independent System Operator, which manages the 
state's power_grid, found that_significant market power is being