Williams settles overcharge suit

Tuesday, May 1st 2001, 12:00 am
By: News On 6

WASHINGTON (AP)_ Williams Co., a major power supplier for California, has agreed to refund $8 million to settle a federal investigation into alleged improper charges for electricity.

The agreement settles the only enforcement action involving alleged overcharges in California's hot power markets taken so far by the Federal Energy Regulatory Commission.

Separately, the agency is negotiating with a number of power suppliers in seeking $124.5 million in refunds because of overcharges, but these negotiations do not involve any enforcement actions.

Williams, although agreeing to make a refund to the state of California, did not admit to any wrongdoing. The investigation of the company, based in Tulsa, Okla., involved alleged overcharges in California last year.

Williams spokeswoman Paula Hall-Collins said in a statement Tuesday that the settlement ``provided the best opportunity for Williams to move forward instead of engaging in a lengthy and costly hearing process.''

She said the company believes a full hearing would have cleared the company of charges by FERC investigators that Williams, along with AES Southland Corp., of Arlington, Va., had improperly manipulated power supplies in the spring of 2000 to boost prices.

``We're willing to settle this matter in order to turn our full attention to help shape solutions to energy issues facing California,'' she said.

FERC earlier this year cited Williams and AES Southland, owner of two California power plants, in connection with sales in April and May 2000 of electricity from the two AES plants.

Williams was the marketer of the electricity from the two AES plants at Alamitos and Huntington Beach, Calif.

The investigation focused on allegations that Williams and AES had withheld power by shutting down the two plants, forcing the state's power grid managers to buy power from Williams at more than 10 times the normal rate.

AES, which made no additional money off the power sales and is not involved in the refund agreement, all along has claimed the plant shutdowns were justified and proper.

Nevertheless, FERC investigators concluded that Williams, which was the marketer for electricity from the two AES plants, received about $10.8 million in additional revenue ``as a result of the unavailability'' of the two plants.

The settlement also concludes FERC's investigation of AES Southland in connection with the incidents.