California Seeks Further Damages For Energy Crisis -- California Capitol Hill Bulletin -- Volume 10, Bulletin 5 -- March 6, 2003

On Monday, March 3, California filed an action with the Federal Energy Regulatory Commission (FERC) seeking over $9 billion in damages from over 70 electricity generators, traders, and municipal power companies. With the filing, the state submitted what it termed "compelling new evidence" that the companies intentionally created the energy crisis in California and illegally profited from market manipulations. The $9 billion dollar figure is what the State claims were overcharges by the companies during the 2000-2001 crisis.

The filing remains under seal, but the State says it has compiled over 3,000 pages of evidence to show the illegal manipulations and the amount of damage they caused. California officials claim that the illegal profits were made when the companies engaged in creating a false shortage in the market by closing plants for unnecessary repairs, sending electricity out of state and then selling it back into the state when prices were at a peak, and other activities.

The filing also states that from May 2000 to June 2001, Californians paid over $44 billion for electricity, as compared to the $25 billion it cost consumers during 1998, 1999, and 2001 combined.

Previously, FERC awarded the state a rebate of $1.8 billion, California officials now argue that the new evidence filed on Monday supports an award of $9 billion.

Documentary evidence showing alleged market manipulation by companies and municipalities will be made public in the next several weeks. On Wednesday, March 5, FERC released a notice of intention to lift a protective order on the evidentiary documents, and the implicated entities have one week to challenge the lifting secrecy.

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