Canadian utility wants California to pay its bill ( July 10, 2001 )

VANCOUVER, British Columbia (Reuters) - A Canadian public utility accused by California of price gouging has offered a refund, but only to get the state to pay the money it owes in overdue electric bills, a company spokesman said Tuesday.

California has rejected BC Hydro's offer of a $125 million rebate as inadequate. The offer was made in failed talks between the state and various power generators that California alleges owe it $8.9 billion for excessive prices.

The utility, which is owned by the province of British Columbia, maintains that California owes it $290 million in unpaid electric bills. It offered to reduce that amount by $125 million in order to get the rest of the money.

``We're not talking about writing a check. We're talking about offsetting the much larger amount we are owed,'' spokesman Wayne Cousins said.

A U.S. Federal Energy Regulatory Commission judge said Monday he would now draft a refund plan. As a Canadian utility, BC Hydro is not regulated by FERC, but had agreed to participate in the FERC-sponsored talks.

British Columbia officials are closely watching the refund case, because profits from BC Hydro's export sales to California were used earlier this year to provide rebates to B.C. electricity users and to aid low-income residents with other energy bills.

A spokesman for the province's Finance Ministry said it was too early to speculate what impact California's demands would have on British Columbia's efforts to helps its own citizens.

BC Hydro, which is one of western North America's largest hydroelectric producers, has denied allegations of price gouging during recent power shortages and said it was acting within the market rules set by the state agencies that are now complaining.

The utility sells to California under long-term contracts and on the spot market. Since December, it has demanded cash on delivery because of the growing amount of money owed to it by the California Power Exchange and the California Independent Systems Operator, which manages the state's electricity grid system.

Cousins noted the FERC judge drafting the refund plan had warned Monday that California may end up owing power generators more money than it would be entitled to in rebates.

British Columbia's newly elected Liberal Party government had accused the previous government of over-estimating the amount of money BC Hydro would be able to collect from California when they announced the provincial budget in April.

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-- Martin Thompson (mthom1927@aol.com), July 11, 2001