UNITED STATES OF AMERICA BEFORE THE FEDERAL ENERGY REGULATORY COMMISSION ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) )

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1 UNITED STATES OF AMERICA BEFORE THE FEDERAL ENERGY REGULATORY COMMISSION San Diego Gas & Electric Company, Complainant, v. Sellers of Energy and Ancillary Services, Respondents. Investigation of Practices of the California Independent System Operator and the California Power Exchange. State of California, ex rel. Bill Lockyer, Attorney General, Complainant, v. British Columbia Power Exchange Corp., et al., Respondents. Puget Sound Energy, Inc., v. Complainant, Sellers of Energy and Ancillary Services, Respondents. People of the State of California, ex rel. Edmund G. Brown Jr., Attorney General, Complainants, v. Powerex Corp. (f/k/a British Columbia Power Exchange Corp., et al., Respondents. Docket Nos. EL , et al. Docket Nos. EL , et al. Docket Nos. EL , et al. Docket Nos. EL , et al. Docket No. EL CALIFORNIA PARTIES MOTION FOR COMMISSION ACTION IN CALIFORNIA REFUND PROCEEDINGS

2 The California Parties 1 respectfully move the Federal Energy Regulatory Commission ( Commission to take prompt action on the matters pending in the California refund proceedings. Parties on both sides of these proceedings desire a path towards finality in this tenyear marathon, yet no end is in sight. Until the Commission acts on the key issues that remain unresolved, California ratepayers cannot be made whole for the overcharges that they incurred during the California energy crisis of 2000 and I. BACKGROUND AND STATUS OF PROCEEDINGS Pending before the Commission are four proceedings in which California ratepayers seek redress for overcharges suffered during the California energy crisis. Those four proceedings are the CPUC v. FERC remand, 2 the Port of Seattle remand, 3 the Lockyer remand, 4 and the Brown complaint proceeding. 5 All of these proceedings have been pending for some time and appear to be stalled at the Commission. CPUC v. FERC Remand: This proceeding relates to relief for sales that were made into the markets operated by the California Independent System Operator Corporation ( ISO and the California Power Exchange Corporation ( PX during the Summer 2000 Period (May 1, 2000 through October 1, 2000 and for energy exchanges and multi-day transactions that occurred during the Refund Period (October 2, 2000 through June 20, The United States Court of 1 For purposes of this motion, the California Parties are Pacific Gas and Electric Company, Southern California Edison Company, the People of the State of California ex rel. Kamala D. Harris, Attorney General, and the Public Utilities Commission of the State of California. 2 Docket Nos. EL00-95, et al., on remand from Pub. Utils. Comm n of Cal. v. FERC, 462 F.3d 1027 (9 th Cir Docket No. EL01-10, on remand from Port of Seattle v. FERC, 499 F.3d 1016 (9 th Cir Docket No. EL02-71, on remand from Lockyer v. FERC, 383 F.3d 1006 (9 th Cir People of the State of Cal. ex rel. Edmund G. Brown Jr., Attorney General v. Powerex Corp., Docket No. EL09-56 (filed May 22,

3 Appeals for the Ninth Circuit ( Ninth Circuit issued its mandate in this proceeding on April 15, The Commission issued its remand order on November 19, Petitions for clarification and rehearing of that order are still pending. Last Summer, the Chief Judge suspended hearing procedures in order to receive the benefit of the Commission s orders on clarification or rehearing, and, in August 2010, the Commission requested briefing on the scope of the proceeding. 7 The parties completed briefing on the scope of the hearing last Fall and await a ruling from the Commission; in the meantime hearing procedures are on hold. The California Parties cannot move forward (or, if necessary, pursue an interlocutory appeal to the Ninth Circuit without Commission action. Port of Seattle Remand: In this proceeding, the California Parties seek relief for sales to CERS at Pacific Northwest delivery points, during the January through June 2001 period. The Ninth Circuit issued its mandate in this proceeding almost two years ago on April 16, The California Parties proposed procedures for moving this case forward in their May 22, 2009 Motion (addressed further below. The Commission has yet to issue any order on remand or to take any steps to carry out the Ninth Circuit s mandate. Lockyer v. FERC Remand: This proceeding seeks relief, based on sellers violations of market-based-rate tariffs and tariff requirements, for ISO and PX transactions during the Summer 2000 Period and for short-term sales to CERS 6 San Diego Gas & Elec. Co., 129 FERC 61,147 ( San Diego Gas & Elec. Co., 132 FERC 61,209 (

4 during the January 2001 through June 20, 2001 period. The Ninth Circuit issued its mandate on December 4, The Commission issued its order on remand on March 21, 2008, and set the matter for hearing. On March 18, 2010, an administrative law judge granted summary disposition in favor of the suppliers. 8 The California Parties timely filed exceptions to that ruling, but the Commission has not ruled on those exceptions. A prompt Commission ruling will permit the California Parties to proceed to hearing on the merits of their claims or to seek appellate review. Brown Complaint: This complaint seeks relief for sales to CERS during the January through June 2001 period as a consequence of sellers exercise of undue market power, market gaming and manipulation, and failing to file proper transactions reports. The complaint was filed almost two years ago, on May 22, The Commission has taken no action on this complaint. On May 22, 2009, the California Parties sought to streamline and facilitate these proceedings by filing a Motion Requesting (1 Consolidation and Severance of Specified Proceedings, and (2 Summary Disposition, or, in the Alternative, (3 Settlement Procedures and an Evidentiary Hearing in the Consolidated Proceedings ( Summary Disposition Motion. 9 The Summary Disposition Motion set forth extensive evidence demonstrating that the California Parties are entitled to market-wide relief as a matter of law and requested that, if the Commission does not grant such relief, it consolidate these proceedings and set the matters for hearing. 8 Initial Decision on Motions for Summary Disposition, 130 FERC 63, 017 ( The California Parties filed the motion in Docket Nos. EL00-95, EL00-98, EL02-71, EL01-10, and EL

5 Nearly two years later, the Commission has not ruled on the Summary Disposition Motion or the request to consolidate these proceedings. The California Parties also proposed consolidation of these four proceedings when they filed their exceptions to the grant of summary judgment in the Lockyer proceedings. 10 They reiterated that maintaining four separate proceedings is inefficient, duplicates the evidence to be presented, risks inconsistent outcomes, and serves to mask the true harm suffered by California ratepayers. The Commission has not ruled on that request. The California Parties are not the only participants affected by delays in resolving these proceedings. Several suppliers also filed motions seeking expedited rulings. In July 2010, the Competitive Supplier Group filed for a ruling on dispositive motions or the setting of hearing in the Brown complaint. 11 In August 2010, suppliers sought rulings on the requests for clarification and/or rehearing in the CPUC v. FERC Remand. 12 The California Parties answered those motions with their own requests for expedited rulings. 13 On December 3, 2010, Indicated Suppliers requested a Commission ruling on pending requests for clarification and rehearing 10 Cal. Parties Renewed Motion to Consolidate Proceedings in Conjunction with Brief on Exceptions to March 18 Initial Decision Granting Summary Disposition in Docket No. EL02-71 (Apr. 19, 2010; see also Cal. Parties Brief on Exceptions to March 18, 2010 Initial Decision Granting Summary Disposition, at (Apr. 19, Request of Competitive Supplier Group for a Comm n Order Pending Dispositive Motions or Setting This Matter For Hearing, Docket No. EL09-56 (July 7, The Competitive Supplier Group is comprised of Avista, Merrill Lynch Capital Services, Shell Energy, and TransCanada Energy. 12 Indicated Suppliers Request for Comm n Ruling on Pending Clarification and/or Reh g Requests, Docket No. EL (Aug. 4, 2010; Answer of Indicated Pub. Entities in Support of Indicated Suppliers Request for Comm n Ruling, and Motion to Expedite Resolution of Indicated Pub. Entities Request for Reh g, Docket No. EL (Aug. 9, The Indicated Suppliers are Avista, MPS Merchant Services (formerly Aquila, Powerex, Shell Energy, and TransAlta Energy. 13 Answer of the Cal. Parties to the Competitive Supplier Group s Request for a Comm n Order Pending Dispositive Motions or Setting This Matter For Hearing, Docket No. EL09-56 (July 21, 2010; Cal. Parties (1 Answer to Indicated Suppliers and Indicated Pub. Entities Requests for Comm n Ruling and (2 Request for Expedited Ruling, Docket Nos. EL , et al. (Aug. 19,

6 regarding the CPUC v. FERC Remand, stated that the docket is presently at a standstill, 14 and asked the Commission to act on rehearing. II. ARGUMENT These cases are more than ten years old. The parties are entitled to have their claims heard and ruled upon. The need to move forward in these proceedings is a point on which all parties appear to agree. Despite the parties consensus and repeated requests, the Commission has not ruled on the various pleadings seeking determinations that will permit the parties to move forward. The California Parties have settled claims with nearly fifty suppliers (including some where settlement filings are in the process of being finalized. Nonetheless, the California Parties' have sizeable claims against a number of sellers that have not settled. The California Parties remain willing to discuss settlements with these suppliers, but it appears at this point that the parties differences may only be bridged through continued litigation. If the Commission believes that it is doing the parties a service by withholding action, it is mistaken. Indeed, the Commission would enhance the parties prospects for settlement by acting on the pending litigation, and acting promptly, rather than remaining inactive. The Summary Disposition Motion presents evidence sufficient for the Commission to rule summarily in favor of the California Parties. That motion has been pending for nearly two years. The Commission should promptly rule for the California Parties, correct prices, and direct sellers to make refunds that would compensate California ratepayers for the unjust, unreasonable, and unlawful rates that they were charged over a decade ago. If the Commission declines to grant summary disposition in favor of the California Parties, it should consolidate these 14 Indicated Suppliers' Request for Comm n Ruling at 3, Docket No. EL (Dec. 3,

7 proceedings and institute a hearing process that will allow the California Parties to pursue all their issues in one hearing. 15 The dozens of settlements in which claims spanning multiple proceedings have been resolved through one deal and one agreement for each supplier demonstrate that each of the pending proceedings overlaps with respect to the claims and transactions at issue, and that they can best be resolved as one. At a minimum, the Commission should rule on the matters before it. The Commission should rule on the pending motions for clarification or rehearing in CPUC v. FERC, clarifying that the California Parties are permitted, as the Ninth Circuit held, 16 to put on their case for market-wide price correction and refunds, and are entitled to do so without being subject to the unfair and inappropriate restrictions that some suppliers have advocated. Likewise, the Commission should move forward on Lockyer, Port of Seattle, and Brown, either ruling summarily for the California Parties, or instituting hearing procedures that allow the California Parties the opportunity to prove their case. III. CONCLUSION As the Ninth Circuit held more than four years ago, the California Parties are entitled to an adjudication of their claims. 17 Continued delays will further hurt California ratepayers, who were the victims of the California energy crisis. Because it is time to move forward on the pending matters, the California Parties respectfully request prompt Commission action. 15 In the various requests for consolidation, the California Parties have sought consolidation of the CERS portion of Docket No. EL01-10 with the other dockets. There is another portion of Docket No. EL01-10 that relates to purchases in the Pacific Northwest to serve buyers in the Pacific Northwest. Those claims by entities located in the Pacific Northwest involve a different set of transactions from the sales to California and are best dealt with separately. 16 CPUC v. FERC, 462 F.3d at Id. 7

8 Respectfully submitted, /s/ Stan Berman Stan Berman Eric Todderud Sidley Austin LLP 701 Fifth Avenue, Suite 4200 Seattle, WA Mark D. Patrizio Joshua Levenberg Pacific Gas and Electric Company 77 Beale Street, B30A Post Office Box 7442 San Francisco, CA /s/ David M. Gustafson Kamala D. Harris Attorney General of the State of California Matt Rodriguez Chief Deputy Attorney General Matt Rodriquez Acting Chief Assistant Attorney General 1300 I Street, Suite 125 Sacramento, CA David M. Gustafson Deputy Attorney General 1515 Clay Street, 20 th Floor Oakland, CA Attorneys for Pacific Gas and Electric Company /s/ Richard L. Roberts Richard L. Roberts Catherine M. Giovannoni Joseph E. Stubbs Steptoe & Johnson LLP 1330 Connecticut Avenue, NW Washington, DC Russell Swartz Leon Bass, Jr. Southern California Edison Company 2244 Walnut Grove Avenue Rosemead, CA /s/ Kevin J. McKeon Kevin J. McKeon Craig R. Burgraff Judith D. Cassel Hawke McKeon & Sniscak LLP 100 North Tenth Street, P.O. Box 1778 Harrisburg, PA Attorneys for the People of the State of California ex rel. Kamala D. Harris, Attorney General Attorneys for Southern California Edison Company 8

9 /s/ Sarah R. Thomas Frank Lindh Sarah R. Thomas Christopher Clay Candace J. Morey Public Utilities Commission of the State of California 505 Van Ness Ave., Room 4300 San Francisco, CA Attorneys for the Public Utilities Commission of the State of California March 25,

10 CERTIFICATE OF SERVICE I hereby certify that I have served a copy of the foregoing document electronically by posting it on ListServ established by the participants in Docket No. EL , et al. and EL and have served a paper copy on persons on the EL01-10 and EL09-56 service list for those individuals that are not part of the electronic service lists. Dated at Washington, DC this 25 th day of March, /s/ Heather Curlee Heather Curlee Sidley Austin 1501 K Street NW Washington, DC ( hcurlee@sidley.com