FERC judge extends deadline for settlements with national energy companies

San Diego Business Journal, August 12, 2002

Eight power companies have until the end of August to reach settlement with California over billions of dollars in long-term power pacts signed during the height of the energy crisis.

According to reports, a Federal Energy Regulatory Commission judge expected some agreements to be reached on Aug. 6, but later that day announced a final round of negotiations would be conducted in Washington, D.C., on Aug. 28, 29 and 30.

Since last year, the California Department of Water Resources, which buys power for the state, has been trying to renegotiate $43 billion in contracts. In all, 56 contracts were signed with 29 providers during the 2000-2001 energy crunch.

The price of electricity has fallen dramatically since DWR agreed to those terms.

In April, DWR reached an agreement with five power companies--Calpine Corp., which has plans to build the Otay Mesa Energy Center in San Diego County; Constellation Energy Group Inc.; and three smaller suppliers of renewal energy--cutting about $3.5 billion off the initial agreements.

After earlier threatening to cancel its $7 billion pact with Sempra Energy of San Diego, the DWR filed a lawsuit on July 2 to void that contract. Sempra is one of the companies trying to renegotiate its contract with the state.