Reliant can stop Calif power sales without pay-court
(UPDATE: Adds comments from spokesman)
NEW YORK, April 6 (Reuters) - Reliant Energy Inc. (NYSE:REI - news) no longer has to deliver needed electricity to the California Independent System Operator (ISO) without assurances of payment, after a stay order by the Ninth Circuit U.S. Court of Appeals late Thursday.
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California has been negotiating to buy electricity from several energy suppliers because two of its three biggest utilities are unable to pay for the power they have already received due to price spikes caused by a severe energy shortage.
Houston-based Reliant is one of the biggest suppliers of electricity to California, with about 3,000 megawatts of generation in the state.
Thursday's order, issued by an emergency panel of the appeals court, suspended the lower court injunction issued by U.S. District Judge Frank Damrell in Sacramento, Calif.
The appeals process will now go forward and oral arguments on the merits will be heard in July, Reliant spokesman Richard Wheatley told Reuters.
``Reliant Energy remains committed to being a part of the solution in California,'' said Western Region President Jack Farley in a statement issued by the company late Thursday.
``We have made a lot of progress and we hope that we are very close to concluding a long term contract with the Department of Water Resources to supply power to California,'' Farley said. ``This ruling shouldn't affect those negotiations.''
The appeals panel ruled Reliant Energy ``has shown a high likelihood of success'' in its appeal of Damrell's rulings. The stay order suspends the lower court injunction until a final appeals ruling can be issued following a further hearing scheduled in early July.
``The Court particularly emphasized the importance of the Federal Energy Regulatory Commission (FERC) in this process,'' said Michael Jines, Vice President and General Counsel of Reliant's Wholesale Energy Group in a statement.
``FERC is the right place to resolve these issues, and these very issues are pending before them now,'' Jines said, noting that a closely related FERC case is scheduled for decision on Thursday.
``We've maintained all along that we shouldn't have to sell to a non-creditworthy entity, which is the case with the ISO currently,'' Reliant spokesman Wheatley said. ``We were gratified by the stay order.'' |
