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The Wall Street Journal: Court Won’t Hear Energy Appeal

By MARK H. ANDERSON
June 18, 2007 12:46 p.m.

Also Monday, the court rejected a case that deals with the Federal Energy Regulatory Commission’s power to deal with wholesale electricity refunds stemming from inflated power prices during the 2000-2001 California energy crisis.

Several companies have challenged a ruling by the 9th U.S. Circuit Court of Appeals, San Francisco, that said FERC had broader authority than it was exercising to order refunds under the Federal Power Act. The Ninth Circuit ruling came in a proceeding initiated by California in the state’s bid to recover funds from inflated electricity prices during the crisis. The companies appealing the Ninth Circuit decision include units of Royal Dutch Shell PLC, AES Corp., PPL Corp., PNM Resources Inc., Sempra Energy and Portland General Electric Co..

“The court’s judgment creates massive disincentives to capital investment in the Western power markets,” the companies said. They argued the appeals court made it possible that “FERC will impose retroactive refunds not contemplated by Congress” and present “enormous, unanticipated and uncertain risk for power sellers.”

The U.S. Solicitor General’s Office took issue with the power companies’ arguments in a brief that urged the Supreme Court to reject the appeal. “Petitioners are incorrect,” U.S. Solicitor General Paul Clement said. “The court simply applied the commission’s well-established statutory authority to order appropriate relief, including refunds, when a seller has violated the terms of a tariff.”

FERC has reached numerous settlements with companies for refunds stemming from the energy crisis.

The cases are Coral Power LLC v. California, and California v. Coral Power LLC.

Write to Mark H. Anderson at [email protected]

 

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