Calpine (CPN)

[rayrohn]

someone should update the Ibox lol

chart way out of date



this might change thing down the road also:::::
I think lol


DOW JONES NEWSWIRES
February 19, 2008 2:33 p.m.


By Mark H. Anderson
Of DOW JONES NEWSWIRES


WASHINGTON (Dow Jones)--The U.S. Supreme Court on Tuesday indicated it isn't likely to order federal energy regulators to revise long-term wholesale energy contracts signed by several Western utilities during the 2000-2001 energy crisis.

The high court heard arguments from utilities in California, Nevada and Washington state over a series of legal appeals requesting refunds from contracts signed with power sellers, including the power marketing unit of Morgan Stanley (MS), a unit of Allegheny Energy Inc. (AYE) and several other energy companies.

The energy companies reached long-term agreements to provide power at set prices at a time when Western utilities were responding to chaos in the spot electricity markets. After the crisis subsided, the utilities decided the contracts were set at unreasonably high prices that violated federal law. The Federal Energy Regulatory Commission, which oversees electricity prices, declined to order changes in the contracts.

At oral arguments Tuesday, several justices bristled at the idea the contracts could be discarded, absent evidence that the power sellers engaged in market manipulation that impacted the contract prices.

"Didn't your clients know that the market was chaotic at the time they entered into this long-term contract?" Justice Antonin Scalia asked Christopher Wright, the Washington, D.C.-based attorney representing the utilities. "Wasn't that the very reason you entered into the long-term contract?"

Wright responded that the utilities didn't have a choice if they wanted to get wholesale electricity for their operations.

"We didn't have any alternative because of the market manipulation," Wright said.

Justice David Souter asked a series of pointed questions of Wright and, one by one, dismissed the legal reasons the utilities are using to try to overturn the contracts.

Along with Souter and Scalia, Justices Samuel Alito and Anthony Kennedy also posed skeptical questions of the idea the contracts could be abandoned. Justices John Paul Stevens and Ruth Bader Ginsburg appeared more sympathetic.

Chief Justice John Roberts Jr. and Justice Stephen Breyer were recused from the case; both have large public stock portfolios.

Walter Dellinger, the Washington, D.C., attorney representing the power sellers, said FERC was correct when it refused to lower the contract prices because the sanctity of long-term contracts helps stabilize and build the energy industry.

"If you are going to have, as the commission has said, the kind of investment in building of infrastructure to produce energy, people are going to have to be able to rely upon long-term contracts," Dellinger said.

The two appeals before the Supreme Court involve contract disputes in Washington state, California and Nevada utility districts over only a small amount of the refunds being sought by utility districts.

Related cases - on hold at the Supreme Court pending the outcome of the granted appeals - involve a request for $1.4 billion in refunds from Sempra Energy (SRE) by the California Public Utilities Commission.

The Ninth U.S. Circuit Court of Appeals in San Francisco ruled that FERC should reconsider its decision to leave the power contracts intact and suggested guidelines the agency should use in doing so.

U.S. Deputy Solicitor General Edward Kneedler said that ruling should be overturned, even though the government didn't initially think the Ninth Circuit holding posed a problem for how it regulates power contracts.

"Now that the court has granted review we urge affirmance of FERC's position in this case," Kneedler said. He said FERC determined a change in the challenged power contracts wasn't "necessary in the public interest" under federal law.

The cases are Morgan Stanley Capital Group v. Snohomish County Washington Public Utility District No. 1, 06-1457, and American Electric Power Service Corp. v. Snohomish County Washington Public Utility District No. 1, 06-1462.

A decision is expected by July 2008.