Feds file motion to dismiss gaming claims against Los Angeles power utility

Associated Press

LOS ANGELES — The Federal Energy Regulatory Commission filed a motion Friday to dismiss claims that the Los Angeles Department of Water and Power illegally manipulated the power market to profit during the state’s energy crisis.

The commission identified LADWP in June as one more than 60 companies that may have illegally manipulated the market using questionable marketing strategies during the crisis. The utility was ordered to “show cause” and provide documentation explaining why it should not have to return profits from those trades.

The motion to dismiss the claims was expected, said Randy Howard, a spokesman for the utility.

“They reviewed four different gaming practices,” said Howard, the utility’s director of corporate communications. “After looking at all the information provided, they determined there was no basis for those allegations.”

A consumer advocacy group said the worst abuses in the energy crisis camefrom the private sector of the energy industry, but that FERC should remain skeptical of the public utility.

“Unless they can prove without a shadow of a doubt they (LADWP) were not involved in the manipulation and price gouging, they should remain in the investigation,” said Douglas Heller, senior consumer advocate for the Foundation for Taxpayer and Consumer Rights.

The 2000-2001 power crisis led to rolling blackout in some parts of the state and soaring energy bills for consumers. Market manipulation in the deregulated market was a key factor and FERC has estimated that illegal trading cost the state billions of dollars.

FERC commissioners are expected to rule on the motion in the coming months.

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