OREANDA-NEWS. California and the state's major electric utilities have prevailed in their legal efforts to get the Federal Energy Regulatory Commission (FERC) to take another look at electricity wholesalers' data reporting violations during the 2000-01 western energy crisis.

The US 9th Circuit Court of Appeals last week agreed with those groups that FERC had "erred" in how it structured a review into whether those data violations led to excessive rates that would be subject to refunds. Electric wholesalers are required to file quarterly reports with transaction-specific data, but non-compliance with that rule was frequent during the energy crisis.

FERC began its review after the same appeals court more than a decade ago faulted the agency for dismissing complaints about reporting FERC violations. California and the utilities believe that untimely and improper filing of the transactional data allowed wholesalers to accumulate market power and charge excessive rates.

The review into transaction violations is separate from other proceeding at the agency that have ordered electricity wholesalers to pay millions of dollars in refunds for anomalous bidding and other illegal behavior during the western energy crisis.

FERC after the earlier court ruling started to look into whether reporting violations had masked an accumulation of market power. But the agency chose to use a "hub-and-spoke" test of market share as a precondition for refunds, prompting the lawsuit from the California groups. They argue there is a broader link between deficient reporting, market functions and market power that FERC did not consider through its precondition.

The 9th Circuit did not weigh in on the merits of that alleged link, but said the agency erred by treating the widespread reporting violations as a "mere compliance issue." It ordered FERC to review the transactional reports to see if a just and reasonable price was charged by each seller. To avoid "double recovery" of penalties, the court said the agency could use its discretion not to issue fines when it was appropriate.