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Sen. Larry Craig Sends Clear Message to FERC: 'No Win' California Refunds Would Hurt Northwest

Sen. Larry Craig, R-Idaho, in a recent letter to the Federal Energy Regulatory Commission (FERC) urged the commission not to award refunds to California because those payments would cause too much harm to Northwest utilities and unfairly burden the region's ratepayers.

"It has become clear that this proceeding is a 'no-win' proposition for the Northwest region because most Northwest utilities bought power from other Northwest suppliers," the senator said.

"Therefore, the refund proceeding can only result in the transfer of funds within the Northwest region and there will be no economic benefit to the region as a whole. Awarding refunds in this proceeding would also have the effect of penalizing Northwest utilities that were prepared for the 2000-2001 electricity market crisis and rewarding those that were not prepared."

The Golden State has sought about $70 million in refunds from Bonneville Power Administration (BPA), according to the letter.

"If the Commission opens the door to further California refunds against BPA then Northwest ratepayers will be forced to pick up the tab, further increasing BPA rates, which have skyrocketed to unprecedented levels in the aftermath of the Western electricity market meltdown."

"I agree with BPA that … 'there is no realistic hope of truly unwinding all of the transactions necessary to equitably order refunds,'" Sen. Craig said. "I submit that continuing the current proceeding to a refund outcome would only further aggravate the unfair treatment of the Northwest by FERC and would likely set off years of bitter internecine warfare between Northwest investor-owned and public utilities."

The senator said he hopes the commission would finish its work expeditiously.

"We need to put the refund issue behind us so we can focus on issues that hold real benefits for the region's ratepayers such as building new generation and transmission and taking steps to reduce BPA's rates," the letter concluded.

For more information, including a copy of the letter, contact EPSA's Douglas Austin at daustin@epsa.org, or (202) 628-8200.