07.25.01

Senator Cantwell Applauds FERC Decision to Establish a Process to Consider Refunds for Northwest Ratepayers

WASHINGTON, DC - U.S. Senator Maria Cantwell (D-WA) today applauded the Federal Energy Regulatory Commission (FERC) for recognizing the differences in the Northwest and California energy markets and establishing a process to determine whether Northwest parties should receive refunds. FERC, which addressed the refund issue at a public meeting today, is expected to release its written decision tomorrow.

"FERC has heard our concerns in the Northwest," Cantwell said. "When Administrative Law Judge Wagner made his recommendation to FERC the Northwest was mentioned in only two sentences. At today's hearing every single member of FERC addressed the Northwest, its unique energy market and the need for a process to address its skyrocketing prices."

"Today's decision to establish a process to hear Northwest concerns gives the region an excellent opportunity to make the case that Northwest rates are unjust and unreasonable and that consumers should receive refunds," Cantwell said. "We still have a long way to go before FERC decides whether Northwest consumers are entitled to refunds. With participation from the parties in the region, however, I am optimistic we will present FERC with compelling evidence that Northwest ratepayers have been subject to unjust and unreasonable prices."

Cantwell stressed that statements by FERC commissioners at today's meeting indicate that they will take into consideration differences between the Northwest and California energy markets. Unlike California, for example, the Northwest does not have an organized spot market, in which utilities purchase power in real time or a day in advance. Instead, Northwest utilities often buy power using "forward contracts" that extend over a week or more. Those differences are critical in calculating whether ratepayers have been overcharged.

FERC established a process for the Northwest parties to make the case for refunds. FERC has set a preliminary evidentiary hearing for Northwest parties to prove their case with regard to unjust and unreasonable prices dating back to Dec. 25, 2000 (60 days after the Puget Sound Energy complaint was filed), potentially leading to refunds.

Northwest parties will have 15 days to file evidence on unjust and unreasonable prices with an Administrative Law Judge (ALJ). The ALJ will hold a subsequent 30-day evidentiary hearing to make findings of fact and conduct cross-examinations. After the 30-day period, the ALJ must report his/her findings and make a recommendation to the Commission within seven days about future proceedings for the Northwest.