Posted on 05/28/2003 1:12:09 PM PDT by lilylangtree
The state of California and city of Tacoma lashed out Tuesday against a federal report exonerating Avista Corp. of wrongdoing during the 2000-2001 energy crisis.
Calling federal investigators' work "substandard," the two parties called for an agreement reached between regulatory staff and Avista to be thrown out.
"Trial staff's review was not comprehensive and was woefully inadequate to support its findings absolving Avista Utilities and Avista Energy of participating in Enron trading strategies," wrote Vickie Whitney, a California deputy attorney general, in a filing with the Federal Energy Regulatory Commission.
California and Tacoma are respondig to a FERC staff report filed last week that reiterated findings the Spokane energy company did nothing wrong during the energy crisis.
The report repeated findings of an agreement reached between FERC staff and Avista in Juanuary.
"We believe the staff did a thorough job and reaffirmed its findings," said Avista spokesman Hugh Imhof.
FERC staff and Avista have until June 2 to rebut the comments from California and Tacoma. After that, FERC's Chief Administrative Law Judge Curtis Wagner Jr. will either approve the agreement absolving Avista or schedule a hearing.
The Avista case is one among many that California and Tacoma hope will return billions of dollars in refunds as the West coast energy market manipulation is investigated. The parties want reimbursements from energy marketers, whom they accuse of overcharging customers.
Avista was investigated by FERC last year due to a series of trades with Enron and Portland General Electric, an Enron subsidiary. The months-long investigation found no evidence that Avista knowingly engaged in improper trading. However, a report released in March by a different FERC staff detailed market manipulation by numerous companies and implicated the Spokane company again.
In particular, Avista was accused of profiting by selling energy it could not provide, improperly importing and exporting power, and clogging transmission lines and then receiving payments to ease that congestion.
Though the FERC staff report detailed why it found no wrongdoing on Avista's part and supplemented its findings with the affidavits of two economists, California said the report was inadequate.
California pointed out that FERC staff found one instance of Avista Energy selling energy it could not provide, but dismissed it because it did not constitute "a pattern of behavior."
"There is apparently a defense for sellers that no matter how damaging the market misconduct may be, because it only occurred once, there is no penalty," the California filing reads. "Clearly, this offers no protection to consumers and acts to countermand the Commission's authority with respect to regulating market conduct."
"That's their interpretation," Imhof responded. The activity mentioned was investigated by FERC staff and found to be an acceptable trading practice," he said.
"There was a technical reason why we had to cut the schedule on that day," Imhof said. "The FERC trial staff interpretation was that this was not an instance of wrongdoing. The schedule was cut, but it was not done as manipulative behavior."
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1. Was, for the most part, legal -- even ethical, given corporate responsibility to their shareholders to maximize profits in any legal way. They merely took advantage of a poorly constructed "market" with all kinds of irrelevant and artificial constraints.
2. Had virtually no effect on delivered price, anyway. We're talking pennies, in the context of billions.
The City of Tacoma might consider suing the State of California for gross negligence in governance and felonious regulatory idiocy. They'd likely have a better case...
We can dream.
We are making good headway on a little bit of that:
Dump Davis effort moving fast! Tom Ambrose on citizens' recall of California's Democrat governor
Of course Davis is taking action too:
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