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Pastimes : The California Energy Crisis - Information & Forum -- Ignore unavailable to you. Want to Upgrade?

To: Raymond Duray who wrote (247)	4/26/2001 4:37:29 PM
From: Raymond Duray	Respond to of 1715

FERC mandates certain price controls in California power market Thread, Here's a good summarization of the latest FERC decision: nytimes.com <snip> Board Orders Limited Price Caps for California Power By JOSEPH KAHN WASHINGTON, April 25 — Federal regulators decided tonight to impose broad price controls on electricity sales in California, reversing their previous stance and contradicting the Bush administration's steadfast opposition to federal intervention in the state's energy market. In a compromise, two of three commissioners of the Federal Energy Regulatory Commission voted to cap electricity prices whenever supplies fall to within 7.5 percent of demand in the state's volatile electricity market. The caps are to go into effect on May 1 and last a year. The controls should help California save billions of dollars it would otherwise pay to electricity generators that state officials have accused of price-gouging. "California consumers can rest assured that the commission has been attentive to their problems, and has worked tirelessly to ensure that they receive necessary relief," said Curt L. Hébert Jr., the commission's chairman. California's flawed attempt at electricity deregulation has led to skyrocketing prices and left the leading utilities in the state near insolvency. State officials have urged the commission to corral prices until new power plants are built. The intervention announced tonight will affect far more electricity sales than an earlier plan under consideration by the regulatory commission. But California officials and one of the agency's commissioners had sought more sweeping caps that could be applied even if supply levels were comfortably above demand. The order was harshly criticized by that commissioner, William L. Massey, as falling short of what was needed to stem the economic damage caused by high prices in California and neighboring states. "Generators are exercising their market power in that state 24 hours a day, seven days a week," Mr. Massey, a Democrat, said after the vote. "It is much too late in the game for this agency to settle for a `half a loaf' solution to the problem." But Mr. Hébert, the Republican chairman, and Commissioner Linda Key Breathitt, a Democrat, defended the order as a balanced approach, preserving competitive markets while offering cost relief. <end snip>

To: Raymond Duray who wrote (247)	4/26/2001 7:23:07 PM
From: Daniel G. DeBusschere	Read Replies (2) \| Respond to of 1715

out of state sellers? Consult your tax attorney. The state can get its hands on anyone that has a "nexus" in the state such as a place of business, etc. If some energy trader sells electricity to the grid has only a $20/month office in Louisiana, I do not believe the bill applies in this case. Therefore, if MIR wholesales its energy that is produced in California with one of the plants that they bought from PG&E and for which the California PG&E ratepayers paid several times its original cost to John Duke energy broker/trader in Baton Rouge for $80/MWh, and then ol' Johnny resells the juice back to the California DWR for $1500/MWh then neither legal person is affected by the bill. Johnny gets his $1500 unless the DWR withholds the excess amounts which forces Johnny to file an out of state tax return asking for a refund or go to court. Again consult your tax attorney.