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FERC Clears Duke in Energy Outages

Regulators say the power plant owner 'adequately explained' shutdowns during the state's electricity crisis.

August 02, 2003|Nancy Rivera Brooks | Times Staff Writer

The Federal Energy Regulatory Commission on Friday cleared Duke Energy Corp. of accusations that the company shut down its California power plants to drive up prices during the energy crisis of 2000-2001.

Duke Energy, which owns four plants in the state capable of generating a total of 4,400 megawatts of electricity, "adequately explained" outages at its California facilities from May 1, 2000, to June 30, 2001, according to a brief FERC staff report released Friday.

Duke spokesman Pat Mullen said the North Carolina company had "always said the facts, not rhetoric, will show we have acted appropriately in the market." During the crisis, Duke said it had locked much of its power capacity into long-term contracts with electricity purchasers and so had little incentive to shut down plants.

Federal regulators on Friday also absolved 100 other companies and municipal utilities that played a smaller role in the energy market. Regulators are still investigating the actions of other major power plant operators in California, including AES Corp., Williams Cos., Dynegy Inc., Mirant Corp. and Reliant Resources Inc.

California officials have been seeking $9 billion in refunds from energy sellers for alleged overcharges during the energy crisis, and FERC has been attempting to wrap up its investigation into possible market misbehavior.

As the state endured months of electricity shortages, one of the key accusations against power sellers was that they shut down some of their turbines so that they could reap even greater profits by selling electricity from remaining units. Power plant owners have said there were legitimate reasons for outages, such as equipment breakdowns or pollution restrictions.

Evidence of specific instances of power withholding by AES, Williams and Reliant led to settlements with FERC, which is still examining other actions by those companies. Williams, which markets power from plants owned by AES, paid $8 million; Reliant paid $13.8 million. Those companies said the incidents were isolated.

Most of the companies and utilities cleared Friday had little or no electricity generation to sell into the market or were selling power under long-term contracts, FERC said. They included Sempra Energy, Edison International's Edison Mission Energy and the municipal utilities operated by Anaheim, Burbank, Glendale, Redding, Riverside and Sunnyvale.

Power generators not on the list are still being investigated, FERC said.

"This should not be interpreted as commission staff having found conclusive evidence of physical withholding at this time," FERC said, "but that staff has not concluded its review of these entities."

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