Supplier refuses Tacoma Power

Energy: Move comes after utility seeks refunds

Les Blumenthal; The News Tribune

WASHINGTON - One of Tacoma Power's main suppliers refused to sell electricity to the utility a day after Tacoma Power officials told federal regulators that the supplier should refund money for overcharges on previous sales, Tacoma Power officials said.

"It is outrageous that such retaliatory actions would be taken by any entity licensed or otherwise authorized in the public interest to engage in wholesale energy transactions," said Phil Chabot, a Washington, D.C., lawyer representing Tacoma Power, in a letter to Federal Energy Regulatory Commission Judge Curtis Wagner Jr.

Neither Chabot nor Mark Crisson, superintendent of Tacoma Power, would identify which of the suppliers had refused to sell power. Crisson would only say it was a "frequent supplier" that had sold the utility a "big chunk" of electricity.

On Monday the utility, in an affidavit submitted to Wagner, claimed that it was owed almost $72 million by 32 power generators and marketers for overcharges between October 2000 and May.

The alleged overcharges came at a time when wholesale power prices had jumped tenfold and Tacoma Power imposed a 50-percent surcharge on its customers.

Northwest utilities, including Tacoma, Seattle City Light and the Snohomish County Public Utility District, told Wagner they were owed a total of $680 million in refunds. But Tacoma was the only utility to publicly submit a list of companies they felt had overcharged.

According to the list, the biggest refund Tacoma thought it was due was from Avista Energy of Spokane, for $27.2 million. Others on the list included TransAlta, a Canadian company, $10.5 million; PPL Montana, almost $8.9 million; and Enron, almost $2.6 million. Tacoma said it was also owed major refunds from Puget Sound Energy, Chelan PUD, Eugene Water & Electric Board, Grant County PUD, Idaho Power and the Northern California Power Authority.

An electricity trader, acting on behalf of the supplier, told a Tacoma Power trader that his company no longer wanted to do business with the utility, Crisson said.

"It appears it may have been a single trader and not company policy," Crisson said. "But we are very concerned about this."

In his letter to Wagner, Chabot said Tacoma had simply followed the judge's request for information on possible overcharges when it submitted the list of the 32 power suppliers. The refusal to supply electricity by one of them came 24 hours later, he said.

"It is astounding that such actions would be taken and threats made even before the city had made any formal claim for refunds," Chabot wrote. "But it would be tragic if such conduct were allowed to deprive consumers in Tacoma or elsewhere any financial relief to which they might be lawfully entitled."

Crisson said other companies on the list also had expressed dismay over being identified, but only one refused to sell Tacoma power.

"Some of the companies on that list felt it was a claim, an allegation, that we were trying to drag them before the public inquisitor," Crisson said. "We were just trying to comply with the judge's request."

The Federal Energy Regulatory Commission has broad jurisdiction over power suppliers, though Chabot, in an interview, wouldn't spell out specifically what could be done to a company that refused to sell electricity.

In his letter, Chabot asked Wagner or the commission to issue an order "prohibiting any wholesale energy provider from making such threats, refusing to engage in transactions or charging any additional premium with respect to the purchasing entities in this proceeding."

If the judge or the commission refuses to act, Chabot said Tacoma could file a formal complaint or pursue other legal actions under such laws as the federal Fair Trade Act.

Late Thursday, Wagner recommended to the commission that a hearing be held to further explore California's claim that it is owed $8.9 billion.

After overseeing 15 days of negotiations to try to settle the various claims, Wagner admitted that too little attention had been paid to Northwest issues.

"There was little time to address the issues raised by the Pacific Northwest parties," Wagner said Thursday. "They did not have the data on what they were owed, nor the amount of refunds due them."

Earlier, Wagner suggested that he would recommend the Northwest talks continue, but he didn't repeat that comment Thursday and left the situation in limbo.

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-- Martin Thompson (mthom1927@aol.com), July 13, 2001