California Protests FERC's Avista Settlement

February 20, 2003 by Jeff Shepard

The state of California announced that it opposed a settlement between federal lawyers and Avista Corp. (Spokane, WA) that cleared Avista of any wrongdoing in connection with Enron Corp's alleged trading schemes to manipulate the California electricity market. The agreement, if approved by the Federal Energy Regulatory Commission (FERC), would drop allegations that Avista acted as a middleman for Enron to inflate prices of wholesale electricity during the Western power crisis that began in mid-2000.

FERC staff lawyers proposed to drop the agency allegations, saying they found no evidence of wrongdoing by Avista. California, which has accused Enron and other power suppliers of over-charging the state by billions of dollars, said the case against Avista should not be halted. The state said FERC attorneys acknowledged that although they had copies of tape recordings of all Avista utilities trades for 2000 to 2001, they failed to review all the transactions and instead examined only random days. The state has until March 3 to file additional evidence of market manipulation to support its demand for nearly $9 billion in refunds.