Thursday, July 01, 2004

FERC suspends investigation for refund settlement talks

At the request of Governor Schwarzenegger, the Federal Energy Regulatory Commission (FERC) has put its investigations into price-gauging during California's 2001 Energy Crisis on hold.

"No one questions the fact that California consumers and businesses were overcharged during those summer months, and I believe they are legally entitled to refunds for that period," Schwarzenegger said.

"Over four years have now passed since the crisis began and despite years of investigation, hearings and litigation, California still has not recovered the vast majority of overcharges incurred during the crisis."

The governor said he hoped the settlement conferences would "set forth a road map for a reasonable and fair resolution" of the issue, which "would be fantastic."

Some legislators, as noted in the San Diego Union Tribune, want even more. However, taking a pause for negotiations could be tied to plans to restructure the system in California all-together. It is better to be in a non-combative situation with the players in the energy market when seeking policy concessions.

Will a settlement stop a future Energy Crisis? At first glance, the two issues are unrelated. Getting refunds is a matter of getting our money back for past grievances. However, that money could be used to mitigate higher wholesale energy prices if supplies dwindle later this summer.