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FERC Votes Unanimously to Clear BPA of Market Allegations by CBB Staff Columbia Basin Bulletin - January 30, 2004

The Federal Energy Regulatory Commission last week voted unanimously to clear the Bonneville Power Administration of any allegations of market manipulation during the 2001 West Coast energy crisis.

With little discussion, the commission upheld a FERC staff recommendation to dismiss a "show cause order" against BPA. Under the show cause orders issued last summer, BPA was required to explain whether particular energy transactions involved Enron-like gaming strategies. In its ruling, the commission confirmed the earlier FERC staff conclusion that BPA did not engage in any such strategies.

"People have a right to expect that a federal agency will serve the public interest broadly and ethically," said Steve Wright, BPA administrator. "This decision affirms that BPA met that standard during a very challenging time."

"We are gratified that FERC has looked at our transactions in that period and found them to be legally sound," said Steve Oliver, vice president for Bulk Marketing and Transmission Services. "During this period BPA helped California avoid shortages and blackouts where possible while protecting the interests of Northwest ratepayers."

These proceedings arose after California energy entities provided information to FERC that suggested wide-spread gaming of the California energy market by a large number of utilities and marketers from Jan. 1, 2000, to June 20, 2001. This was a period when Western power supplies ran short and prices shot up to unprecedented levels.

The commission, acting on allegations, issued show cause orders to BPA and 41 other utilities and marketers, seeking to recover any profits from these alleged gaming activities. This allowed BPA to present its case and establish why the allegations were false. Last week's order clears BPA and 22 other utilities and marketers of all allegations of engaging in gaming activities during this period.