The US Federal Energy Regulatory Commission's finding that five energy companies manipulated California's power markets in 2000-01 was upheld Thursday by a federal appeals court.
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FERC has ordered the companies to pay more than $200 million in refunds and penalties, but that finding is being challenged separately.
"The panel held that FERC reasonably interpreted the [California Independent System Operator] tariff and market monitoring and information protocol to prohibit the practices of false export, false load scheduling, and ... anomalous bidding," the 9th Circuit Court of Appeals said in its decision, which was released Thursday.
The court case centered on the Western energy crisis, which saw power prices soar across the West and triggered a bankruptcy filing by Pacific Gas & Electric.
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The Western energy crisis was caused by a drop in power supplies because of drought, inadequate infrastructure and a flawed power market design coupled with market manipulation, according to a 2003 report by FERC.
Since 2001, FERC has approved various settlement agreements related to the energy crisis with companies including Duke Energy, El Paso Corp. and Enron. The settlements total more than $8 billion.
Some companies declined to enter into settlement agreements and in November 2014 FERC largely agreed with a commission administrative law judge finding that Shell Energy North America, MPS Merchant Services and Illinova Corp. manipulated the market.
FERC also found that APX, a middleman in California's power markets, and BP Energy, an APX customer, engaged in economic withholding and overscheduling. FERC ordered refunds of about $200 million, a decision that is being challenged separately.
In its decision, the court said that the record supported FERC's finding that false export and false load scheduling strategies forced California's investor-owned utilities increasingly to rely on the real-time market to serve load, threatening the reliability of California's grid.
The court rejected arguments that false exports and false load scheduling helped move power into California, lowering power prices.
"Substantial evidence supports FERC's conclusion that the violations affected the [real-time] market price," the court said.
California Attorney General Kamala Harris praised the court's decision.
"The decision upholds the findings on which FERC has ordered the payment of more than $200 million in damages from sellers that have not settled," Harris said in a statement. "My office will continue to pursue compensation from those who gamed the market and profited from the skyrocketing prices that resulted."
--Ethan Howland, email@example.com
--Edited by Keiron Greenhalgh, firstname.lastname@example.org