Williams Questioned in California Outages

Friday, March 16th 2001, 12:00 am

By: News On 6

OKLAHOMA CITY (AP) -The U.S. Federal Energy Regulatory Commission has asked an Oklahoma-based company and its partner to explain why they should not refund $10.86 million to California utilities.

The commission says its preliminary investigation raised serious questions about whether Williams Energy Marketing and Trading and AES Southland Inc. deliberately shut down two electric generating plants in California to vastly increase the price for electricity from their other plants.

Williams Energy, a subsidiary of Williams Cos. of Tulsa and California-based AES have denied the allegation.

The commission issued a show-cause order Wednesday giving the two companies 20 days to explain why they shouldn't issue the refund.

The commission said ``Williams had a financial incentive to prolong any outages'' of two AES-owned plants last April and May. Williams had a contract to market all of the power generated by AES plants.

``Williams received more revenues as a result of the respective outages,'' the commission said.

Instead of receiving about $63 per megawatt-hour if the two plants had been operational, Williams received about $750 per megawatt-hour by selling electricity from other AES plants, federal officials reported.

``Once all the facts are on the table, we are confident it will be clear that Williams conducts business legally, within the terms of our contracts and tariff obligations,'' said Bill Hobbs, president of Williams Energy.

AES said the plants were taken off line for repairs.

The commission's preliminary probe was prompted by a request from the California Independent System Operator, which manages the state's power grid.