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FERC Judge Rips Calif, Generators; Demands Sales Data

06-29-01??06:05 PM EST ??by?Bryan Lee ??|?Of DOW JONES NEWSWIRES
WASHINGTON -(Dow Jones)- The U.S. Federal Energy Regulatory Commission judge
overseeing settlement talks between California and power sellers ripped into
both sides Friday in an effort to spur progress in the moribund negotiations,
according to sources.
"It's fair to say that everybody got their rap on the knuckles," said one
source.
Curtis Wagner, FERC's chief administrative law judge, read a statement during
the confidential settlement negotiations dressing down California regulators
and market institutions for a lack of political independence.
Wagner, in what one source described as a "tirade," complained that the
California Independent System Operator's politically appointed board, headed
by Michael Kahn, lacks necessary independence as a market institution.
Further, Wagner complained that the California Public Utilities Commission
and investor-owned utilities in the state were deferring too much to the
politically compromised Kahn in negotiations.
The lack of independence was such a "joke" that the parties might as well
wear "clown suits," Wagner said, according to those familiar with his
comments.
However, Wagner didn't spare the power providers from strong criticism.
He took generators to task for exercising market power and deriving obscene
profits, the sources said.
Sources described the incident as perhaps a ploy by Wagner to jump-start the
fast-track settlement talks, scheduled to conclude July 9.
California Gov. Gray Davis is demanding nearly $9 billion in refunds for
power sales in California during the past year.
As the negotiations got underway Monday, Wagner dismissed that amount as too
high, suggesting a more reasonable figure of between $1 billion to $2.5
billion. However, California ISO Chairman Kahn has held fast to Davis' demand
for $9 billion.
Wagner instructed the negotiating parties to work during the weekend to
develop concrete figures on power sales, revenue, costs and proposed refund
amounts for his consideration on Monday, according to the sources.
-By Bryan Lee, Dow Jones Newswires; 202-862-6647; Bryan.Lee@dowjones.com
(This story was originally published by Dow Jones Newswires)
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