A U.S. Federal Energy Regulatory Commission (FERC) judge聽that more than a dozen electricity wholesalers 鈥� including Powerex, a wholly owned subsidiary of BC Hydro 鈥� were guilty of market manipulation in California in 2000.
If the FERC adopts the judge鈥檚 decision, the wholesalers could collectively be required to pay back up to $1 billion in refunds of overcharges, plus an additional $600,000 in interest.
鈥淲e鈥檝e been saying for years that California was victimized by rampant manipulation,鈥� said Mike Florio, commissioner for the California Public Utilities Commission (CPUC).
鈥淚t warms my heart to see a 鈥榞uilty鈥� verdict from an impartial judge, and to consider the fact that as a result we now stand to win back more than a billion dollars for consumers.
鈥淭his money was stolen from ratepayers in California by a bunch of sellers who conducted business like pirates.鈥�
As of press time, representatives of CPUC were unable to provide an estimate of Powerex鈥檚 share of the potential amount the wholesalers face having to pay back.
The ruling relates to the summer of 2000 when California suffered record-breaking electricity prices, rolling blackouts and other system emergencies. The high prices pushed the state鈥檚 two largest utility companies into insolvency and led to the state purchasing billions of dollars in electricity externally.
The judge found sellers manipulated the markets in multiple ways, including by scheduling false exports of power from California and then selling it back into the state at inflated prices.
This is not the only legal case involving sales of energy to California during this period. There is an ongoing case relating to a similar situation in the spring of 2001 that is expected to go to trial before a different FERC judge in April.
According to the FERC website, Powerex is also involved in this second case and could be liable to refund between $800 million and $1 billion, making it the largest player in this particular case.
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