The Honorable Pat Wood
Chairman Federal Energy Regulatory Commission
888 First Street, NE
Washington, D.C. 20426
Dear Chairman Wood:
I understand that soon the Federal Energy Regulatory Commission will consider the amount of money that energy companies may be required to refund the State of California for excessive prices resulting from market abuses during the 2000-2001 energy crisis. Your decision has national implications as it will set important precedent and send a signal to companies across the nation as to how federal regulators will respond to market manipulation.
Given the Commission's recent finding that market abuse was "epidemic" in California, FERC should take every available step to make California consumers and companies whole. FERC should thoroughly consider the California parties' strong case that significant additional refunds are justified. Energy companies should be required to refund electricity sales that were not just and reasonable regardless of the buyer. Justice will not be done until California utilities, the Department of Water Resources and other buyers of electricity are refunded their overcharges. In addition, FERC should support the State's efforts to renegotiate the long-term energy contracts that were executed during times of rampant market abuse. The prices enshrined in those contracts are not just and reasonable, as required by the Federal Power Act.
This matter presents the Commission with the opportunity to remedy market abuse, to refund those who suffered from that abuse, and to send a clear message that such abuse will not be tolerated. I urge the Commission to take that opportunity for the good of the nation's energy markets, consumers and economy.
John F. Kerry