B.C. Hydro cleared of manipulating U.S. market

A negative ruling could have forced Powerex to refund profits made during the California power crisis in 2000 and 2001, when wholesale electricity prices soared to record levels and resulted in power shortages and rolling blackouts.

B.C. Energy Minister Richard Neufeld said the ruling announced today could also open the way for Powerex to collect about $282 million US California still owes it.

"It's super good news for us," he said from Dawson Creek, B.C. "It's also good news in the fact we should have that much better chance to get our $282 million that's owed to us by California."

The deal announced today was worked out with staff at the U.S. Federal Energy Regulatory Commission.

The deal needs final approval from the full commission, but Powerex vice-president Doug Little said he's confident there will be no problem.

He said the settlement made it clear the allegations of profit gouging were unfounded and "Powerex participated by the rules of the electricity market place and helped keep the lights on in California at a most critical time."

Powerex must pay $1.3 million dollars US as part of the settlement, but Little said that's better than another $10 million in legal fees.

"We were successful in our request earlier this year for a full evidentiary hearing and remain confident that had these charges gone to hearing, the results would have been full exoneration of Powerex and no liability," Little said.

Neufeld said he thinks the $1.3 million US was money well spent.

" We asked for this (hearing), B.C. Hydro wanted this so they could lay their case out.

"I suppose at the end of the day they could go back and ask for (the legal fees) back. But to be exonerated, to in fact prove — because there was some doubt even in British Columbians' minds — whether Powerex was really playing the game straight and fair, this lays it out truly that they were and will help us with the $282 million US."

Little said Powerex is the only one of the six largest suppliers to California to be cleared so far.