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June 22, 2001
AG's Office to Represent State in Energy Refund Negotiations

OLYMPIA -- The Attorney General's Office is prepared to ask a federal administrative law judge Monday to allow Washington energy utilities to negotiate refunds for overpriced electricity charged by wholesale power generators and distributors.

High prices for wholesale power are partly to blame for recent dramatic increases in retail power rates charged to companies and consumers by local utilities in Washington and other states.

On June 19, the Federal Energy Regulatory Commission (FERC) issued an order imposing caps on wholesale prices for electricity charged to utilities in 11 Western states. It also provided for potential refunds on past excessive rates charged by power generators and distributors.

However, the June 19 FERC order only makes California utilities eligible for refunds for overcharges prior to July 2, 2001. Washington's position is that utilities in other Western states should also be eligible for refunds on overcharges that began last year.

The FERC order established a process through which a federal administrative law judge will oversee negotiations to settle refund issues between the utilities and power generators and suppliers. The first settlement conference will be held Monday at FERC headquarters inWashington, DC. A representative of the Attorney General's Office will be present to urge that the settlement discussions include Northwest utilities.

"I am pleased that FERC has recognized that recent extraordinarily large jumps in the wholesale price of power are being felt by consumers throughout the West, and not just in California," Attorney General Christine Gregoire said. "But Washington utilities and customers should not be penalized because it took FERC this long to recognize a regional problem."

Earlier this week, Gregoire told a U.S. Senate committee that wholesale power-rate increases have forced schools to divert money from educational programs to purchase power, and have idled or shut down major industries. Meanwhile, consumer rates in communities such as Seattle and Tacoma have skyrocketed.

Seattle consumer rates have shot up 42 per cent since January, and another 22 percent rate increase is expected in October.

"These issues are not just about legalities and economic theories, but about the day-to-day lives of our people, our businesses, our schools and our environment," Gregoire told the Senate committee.


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