San Diego Union Tribune

July 1, 2004

Governor urges FERC to seek energy refunds for Californians

By JOE CANTLUPE
COPLEY NEWS SERVICE

WASHINGTON From 3,000 miles away, Gov. Arnold Schwarzenegger made his presence felt yesterday at closed-door sessions between regulators and electricity sellers sorting out California's demands for $8.9 billion in refunds stemming from the 2000-'01 energy crisis.

In a letter, Schwarzenegger asked the Federal Energy Regulatory Commission to push for refunds for the state.

Schwarzenegger's letter to FERC Chairman Pat Wood III marked his most extensive remarks to date on the fallout from the energy crisis.

"No one questions the fact that California consumers and businesses were overcharged during those summer months, and I believe they are legally entitled to refunds for that period," Schwarzenegger said.

"Over four years have now passed since the crisis began and despite years of investigation, hearings and litigation, California still has not recovered the vast majority of overcharges incurred during the crisis."

The governor said he hoped the settlement conferences would "set forth a road map for a reasonable and fair resolution" of the issue, which "would be fantastic."

His comments contrasted sharply with more aggressive efforts by other California elected officials.

State Sen. Debra Bowen, D-Redondo Beach, chairwoman of the Senate Energy, Utilities and Communications Committee, demanded that California ratepayers get 100 percent of their money back.

"If the governor and FERC are looking to cut a deal with the generators for 25 or 30 cents on the dollar, then the settlement talks are a waste of time and California ought to be in court tomorrow demanding the generators return every penny of the money they stole from ratepayers," Bowen said in a written statement yesterday.

U.S. Sen. Barbara Boxer, D-Calif., has led the charge to get the refunds, saying recently that President Bush should fire any FERC commissioner who doesn't support refunds.

Schwarzenegger's predecessor, Democrat Gray Davis, waged a long and bitter war of words with FERC, contending that the regulators did little to stop the price gouging of energy companies that cost California ratepayers billions of dollars in overcharges.

Schwarzenegger, a Republican, dispatched his missive as FERC opened a two-day settlement conference over the state's claims that energy providers grossly overcharged for electricity during the energy crisis.

The settlement conference involved at least 50 parties and included discussions that FERC officials described as amiable.

Resolving the conflict is expected to take 60 to 90 days, officials said.

"From the tenor of the session, it was quite cooperative," said Robert Pease, deputy director of FERC's office of market oversight.

The session determined "our approach for each company. A lot of parties crunched their own numbers," Pease said. "It's extremely complicated. We are looking for a method to solve all the cases."

Two energy companies have recently agreed to pay hundreds of millions of dollars to California ratepayers.

Dynegy has agreed to pay $280 million, and the Williams Cos. $140 million, officials said.