|Powerex has reached an out-of-court settlement with California utilities, the California Attorney General and other California parties (California Parties) resolving claims related to the 2000 to 2001 California power crisis. The settlement relieves Powerex of a potential $3.2 billion liability from the ongoing actions of the U.S. Federal Energy Regulatory Commission against the electricity trading companies.
Powerex, a BC Hydro subsidiary, was accused of manipulating energy prices during the California energy crisis and, in the settlement, will pay US$273 million in cash and offer the state electric utilities a credit worth US$477 million.
Powerex is one of 60 electricity trading companies accused of selling power to California at inflated prices during that time when areas of the state experienced shortages that led to rolling blackouts and other emergencies.
Bill Bennett, minister of energy and mines, said that the settlement will have no effect on B.C. ratepayers. He stated that though the ministry was not pleased with the settlement, the risk to B.C. taxpayers in a long and costly legal negotiation was too high.