Grant PUD settles sales lawsuit
$11.8 million to be paid for provided power
EPHRATA - Grant County PUD will receive $11.8 million as part of a settlement agreed upon this week with three California utilities over unpaid power sales made during the 2000-2001 energy crisis.
Grant PUD filed claims against the three investor-owned utilities, Pacific Gas and Electric Company, Southern California Edison and San Diego Gas & Electric Company, over $17.5 million in unpaid power, according to settlement documents and Grant PUD General Manager Tim Culbertson.
The California Independent System Operator (ISO) appeared to be transacting for the three California utilities, which also had other agencies working on their behalf, Culbertson said. The California ISO is described on its Web site as "not-for-profit public-benefit corporation charged with operating the majority of California's high-voltage wholesale power grid."
The California groups believed the power prices should have been reduced to levels established by the Federal Energy Regulatory Commission, according to the settlement.
Culbertson said Grant PUD argued it wasn't subject to FERC oversight as a public utility.
During the energy crisis, prices increased from $30 to $50 per megawatt to $200 to $500 per megawatt, Culbertson said. Prices later went back down to $30 to $50 per megawatt, he added.
The energy crisis was the "perfect storm" of events that contributed to the situation, Culbertson said.
"They were unprecedented prices," he added.
Grant PUD attorney Ray Foianini said the power shortage on the West Coast and a manipulation of the market by Enron before the company's demise were factors in the higher prices.
Foianini said the California groups filed a petition with FERC over Grant PUD's prices, which sparked a number of lawsuits.
Grant County PUD commissioners unanimously approved the settlement with the three California utilities this week in a 5-0 vote.
Culbertson said there are provisions in the agreed upon settlement stating that Grant PUD will receive the settlement amount by June 1 or interest starts accruing.
By Aug. 1, if the money isn't received, the PUD has the option to terminate the settlement or continue with an extension of the agreement, he said.
"I think it's a reasonable settlement to solve all these issues, it allows us to forgo continued litigation and appeals and settle these issues," Culbertson said. "I think it's a good outcome."
Also as part of the settlement, the California utilities will receive a $6.5 million refund to be split amongst themselves and other participants involved with the case, according to Gil Alexander, a spokesperson with Southern California Edison.
"Southern California Edison is pleased to have reached this agreement with Grant County resolving claims related to energy sales during California's 2000-2001 energy crisis," wrote Alexander to the Columbia Basin Herald. "The settlement will benefit SCE customers through adjustments in rates."
Representatives with San Diego Gas & Electric Company and Pacific Gas and Electric Company weren't immediately available for comment Thursday.