News Digest

Fortnightly

PX Chargebacks. As a stopgap measure, the Federal Energy Regulatory Commission (FERC) directed the California Power Exchange to rescind all prior "chargeback" actions attempting to assess unpaid liabilities of PG&E and Southern California Edison Co. to other PX participants, and to refrain from any such future actions, pending the outcome of other judicial and administrative actions.

The FERC said it would await a decision of Edison's state court complaint alleging that it is not in default of its PX participant's agreement, on the theory that its failure to pay PX liabilities arose because of "uncontrollable forces." (See also, "Power Bill Paid?" Public Utilities Fortnightly, Apr. 1, 2001, p. 4.) Also, the FERC will wait for the outcome of the complaint filed by the Power Exchange before a California state claims board, seeking compensation for the action by Gov. Gray Davis in issuing executive orders that commandeered the outstanding financial rights of PG&E and Edison regarding block forward contracts in the PX market.

Nevertheless, the FERC then muddied the water by expressing an apparently gratuitous opinion that the chargeback provision in the PX tariff "was not designed to address [a] default of this magnitude." Docket Nos. EL01-29-000 et al., et al. 95 FERC &61,020, Apr. 6, 2001. (em B.W.R.

California Gas Imports. Denying a complaint filed a year ago by the state of California, the FERC ruled that El Paso Natural Gas Co. did not act improperly when it entertained bids on pipeline capacity rights for delivery of natural gas into southern California and eventually awarded the rights to its own corporate affiliate, El Paso Merchant.