Energy Supplier Says Compromise Is Possible (KFWB) 6.22.01, 8:10a --

KFWB Senior Correspondent Bob Jimenez reports that a major out-of-state power supplier believes it is possible to reach a compromise over rebates on past power purchases -- something California Governor Gray Davis has repeatedly asked for.

"Depends on the details of what we're talking about. There are ways that we would be willing to negotiate a settlement," Reliant Vice President John Stout told KFWB.

Davis has asked federal regulators to order a refund of almost $9 billion in, what Davis calls, overcharges on what the state has paid for power.

Reliant and other energy companies have repeatedly denied accusations that they have overcharged for power. They have also denied accusations of artificially manipulating the power market to drive up prices.

"The calculations. . . do not take into account all the cost of generating the power," Stout said.

Davis has said that the $9 billion figure is an estimate. The state's Independent System Operator has questioned the governor's calculations and is reworking formulas. But state lawmakers have insisted that overcharges run into the billions.

"For every dollar that we made in California, 65 cents of it went to pay my fuel bill," Stout said. Power producers have pointed to natural gas suppliers, saying skyrocketing prices of natural gas have spurred the rise in power prices.

The Federal Energy Regulatory Commission has ordered all sides to meet in a settlement conference next week to work out a resolution of financial disputes. The conference will include representatives from California, Oregon and Washington, and members of the energy industry.

The meeting could last as long as 15 days. If an agreement is not reached, FERC's chief administrative law judge could write one and recommend it to the commission

-- PHO (owennos@bigfoot.com), June 22, 2001

Answers

If the power generators say a compromise is possible then they did overcharge.

-- Buck (bigbuck@trailways.net), June 22, 2001.

I think Davis and his cronies had better stop the bombast and start being a little nicer to the power supply guys in these contract talks. They are in a position to slap it to we Califorians--but good. They hold the upper hand.

Power usage hasn't hit 40.000 megs yet, mostly because of all these conservation efforts--NOT because of additional power being found. Traditionally, it goes to 45,000 by mid-summer (could go as high as 47,000 if we hit a blistering, lasting hot streak of 100-115 degrees, which has happened in the past). Another important point many people overlook is that trapped heat tends to build up--so on and off air conditioning (conservation) does less good. (We haven't hit that part of the equation yet.) Thus, an EXTENDED hot streak could have DEVASTATING consequences.

Oh, well, we'll know for sure within the next 3 months.

-- JackW (jpayne@webtv.net), June 22, 2001.