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Bob O'Neil Advocates Refunds for San Diego

Bob O'Neil told the United States Court of Appeals for the Ninth Circuit that the Federal Energy Regulatory Commission (FERC) does indeed have the statutory authority to provide full refunds for excessive "market-based" wholesale electricity rates charged in the California energy crisis in the summer of 2000. "For a long time, citizens have been seeking justice," said O'Neil, representing the City of San Diego-whose residents bore the full brunt of wildly inflated wholesale electricity prices in the summer of 2000.

In its orders, FERC claimed it lacked authority under the Federal Power Act to order such refunds for periods before October 2, 2000-sixty days after the first complaint in the matter was filed at FERC. FERC conceded that this result leaves billions of dollars of overcharges in place.

Mr. O'Neil told a three-judge panel of the court on April 12 that FERC did not have the authority to deregulate wholesale electricity rates subject only to their prospective re-regulation if someone filed a complaint. Thus, the "market-based" rates in question were necessarily subject to refund if FERC found they were not the product of competitive markets. When FERC relies on competition to maintain "just and reasonable" wholesale electricity rates, it has the consequent authority and responsibility to ensure that such rates remain just and reasonable if market competition essentially ceases to set the prices, as happened in California in the summer of 2000.

The court, which heard the arguments in an auditorium of the University of San Diego, is expected to issue a decision in the case by this summer. The outcome of the case has the potential for far-reaching effects on FERC's administration of "market-based" rates under the Federal Power Act. Public Utilities Commission of the State of California v. FERC, No. 01-71051 (9th Cir.)