What's Happening in the Northwest
[April 2003]

FERC's Chief Administrative Law Judge ruled on April 9, 2003 that the proposed settlement submitted on January 31, 2003, by the FERC trial staff and Avista Corporation and Avista Energy, Inc. (Avista) in Docket No. EL02-115-000 could not yet be certified to the full Commission. The proposed settlement appears to conflict with the Commission's investigative staff's March 26, 2003 Final Report on Price Manipulation in Western Markets (see What's Happening at FERC, April 2003). The proposed settlement reports that the Commission trial staff investigation of Avista's activities uncovered no evidence that any Avista representative knowingly participated in improper trading strategies or that Avista engaged in any effort to manipulate the Western markets during 2000 and 2001.

On the other hand, the March 26 Final Report indicates possible misconduct by Avista during these periods in three areas: ratchet or megawatt laundering, sell back of ancillary services, and counter-flow revenues from cut schedules in real time. The Commission trial staff will file a supplement to the proposed settlement addressing these issues by May 15. A prehearing conference will be held on May 20 to discuss whether the settlement, as supplemented, can be certified to the Commission by the Chief Judge. If it cannot, the Chief Judge will establish an expedited trial schedule.

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