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March 04, 2003
Washington Asks FERC for Fairness in Western Power Market

OLYMPIA -- The Attorney General's Office filed papers today asking federal regulators to look at new evidence that supports granting refunds to Northwest utilities that were charged unjustly inflated prices by power suppliers during 2000-2001.

The filing with the Federal Energy Regulatory Commission (FERC) asserts that new evidence provided by Pacific Northwest utilities shows that the Western electricity market was not competitive and prices were unjustly inflated during a crisis in 2000-2001.

A FERC administrative law judge issued a preliminary ruling in October 2001 that Northwest electricity prices - hundreds of times higher than normal - were the product of a fair market. In California, FERC ruled that the same prices were unjust and allowed the buyers to seek refunds.

Prices spiked as high as $3,000 per megawatt-hour during the crisis and were persistently several hundred dollars per megawatt-hour. Historically, prices have been below $50 per megawatt-hour.

"The Western power markets are connected, integrated, and interdependent," Attorney General Christine Gregoire said. "We don't think the same excessive price can be considered unjust in California and fair and reasonable here."

In December FERC granted Northwest utilities' requests to present new proof that the market was not competitive during the crisis.

"Many pieces of evidence came to light after the judges preliminary ruling," Gregoire said. "Seattle City Light and Tacoma Power have worked diligently to gather supporting information that rates were not reasonable. Their customers deserve equitable treatment."

Some of the new information came from memos released by FERC indicating that Enron, and possibly other sellers may have manipulated energy markets throughout the West, causing Northwest utilities and their customers to pay inflated power rates. FERC has recently required other sellers, including Reliant and El Paso Electric, to pay millions for their roles in the crisis.

FERC has indicated it would like to resolve many outstanding issues surrounding the energy crisis as early as this spring.


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