Aug 16 One of the biggest remaining lawsuits
stemming from California's 2000-2001 energy crisis was resolved
after a Canadian province-owned company agreed to a $750 million
settlement over claims it manipulated electricity prices.
The company, BC Hydro subsidiary Powerex, will pay only $273
million to California utilities under the settlement, because it
is owed $477 million for power sold during the crisis, British
Columbia said in a statement on Friday.
California suffered severe blackouts and high energy prices
during the year-long crisis which, exacerbated by a drought,
hurt the state's economy and helped replace a Democratic
governor with Republican Arnold Schwarzenegger.
California has accused a number of companies, including the
now-bankrupt Enron, of manipulating the state'e electric market.
Subsequent studies cited regulatory missteps and a lack of
generation capacity as factors in the state's energy crisis.
"According to testimony submitted by the Attorney General,
Powerex engaged in market gaming by purchasing and exporting to
Canada huge quantities of electricity California needed, and
selling it back to California at exorbitant prices," California
State Attorney General Kamala Harris said in a statement.
The British Columbia statement said the settlement
recognized that Powerex did not admit to any wrongdoing, and
said the company has sold $3.5 billion-worth of electricity to
California in the past 10 years.
"This was a tough but necessary decision to protect
taxpayers," British Columbia's minister of energy and mines,
Bill Bennett, said in the statement.
"We have learned that the U.S. court system can be
unpredictable. When you weigh this settlement versus a potential
$3.2 billion legal liability, we determined it was in the best
interest of taxpayers to settle and put this long-standing
dispute behind us," he said.
California's Public Utilities Commission said it had now
garnered $4 billion in refunds from wholesale electricity
sellers involved in the crisis.
"The refunds paid by Powerex will be passed through to
consumers in California as an offset against their current
electric bills," it said.
Customers of three utilities will benefit; PG&E Corp
, Edison International's Southern California
Edison and Sempra Energy's San Diego Gas & Electric.
In all, 47 entities have settled over claims stemming from
the crisis while 15 companies have not settled, British Columbia
This settlement requires approval from the U.S. Federal
Energy Regulatory Commission.