SAN FRANCISCO -- Federal regulators approved a settlement late Monday between Dynegy Inc., California power companies and state agencies that wipes out $281.5 million in unpaid electricity bills during the state's energy crisis.
The Federal Energy Regulatory Commission approved the settlement -- which was agreed upon in April -- by West Coast Power LLC, which is a 50-50 joint venture between Houston-based Dynegy and Minneapolis-based NRG Energy.
The settlement resolves refund claims and accusations the companies charged unjust or unreasonable electricity rates after October 2000. It also includes $50.9 million to settle claims before October 2000, which federal regulators wouldn't consider.
Of the $281.5 million settlement -- which calculates the amount the companies overcharged California for power -- $133.2 million will be split among the state's three utilities, Pacific Gas and Electric Company, Southern California Edison and San Diego Gas and Electric Company. Another $123.2 million will go to the state, which stepped in to buy power when the three utilities were on the verge of bankruptcy.
The settlement figure also includes a $3 million settlement announced in January to settle FERC allegations of violating power market trading rules during California's energy crisis of 2000 and 2001. The FERC settlement closes the agency's litigation regarding trading strategies in Western energy markets noted in an agency order issued to Dynegy in June.
"The FERC's approval puts behind us a significant amount of litigation and allows us to focus on our priorities in California," said Bruce Williamson, Dynegy's chairman, president and chief executive.
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