A Canadian company accused of manipulating California's electricity
market more than a decade ago has agreed to a $750 million settlement with the
state, officials announced Friday.
The settlement with Powerex is the largest yet in California's long-running effort to win refunds from the energy trading companies that profited from the state's electricity crisis in 2000 and 2001. California has now recovered roughly $4 billion from 47 companies.
"Californians suffered through huge rate hikes and blackouts during the energy crisis," said state Attorney General Kamala Harris. "This settlement brings long-awaited compensation to California ratepayers for Powerex's conduct."
Powerex, a subsidiary of the government-owned British Columbia Hydro and Power Authority, will pay $273 million in refunds. The money will be used to offset future bill increases for customers of Pacific Gas and Electric Co., Southern California Edison and San Diego Gas & Electric Co. In addition, Powerex will drop claims that California utilities still owed the company $477 million for electricity sold during the height of the crisis.
The settlement needs the approval of the Federal Energy Regulatory Commission. Meanwhile, California is still pursuing crisis-related claims against 15 energy trading companies.
"I hope the remaining sellers who have not yet agreed to settle our refund claims will wake up and take notice of this major settlement by Powerex," said Mike Florio, a member of the California Public Utilities Commission.
The commission and the attorney general's office had accused Powerex of buying and exporting to Canada electricity that California needed, then selling the electricity back to the state's utilities at inflated prices.
As part of the settlement, however, Powerex and BC Hydro will not admit any wrongdoing. Had they lost the case, they could have faced a $3.2 billion liability, the companies reported.
"This was a tough but necessary decision to protect taxpayers," said Bill Bennett, minister of energy and mines for the British Columbia government. "We have learned that the U.S. court system can be unpredictable."
David R. Baker is a San Francisco Chronicle staff writer. E-mail: email@example.com Twitter: @DavidBakerSF
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