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Appeals court sides with California in fight over prices during state's energy crisis

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SAN FRANCISCO — A federal appeals court on Wednesday sided with California in its attempt to win hundreds of millions of dollars in refunds from energy sellers accused of overcharging utilities during the state's energy crisis more than a decade ago.

The Federal Energy Regulatory Commission improperly dismissed the claim by California officials, a panel of the 9th U.S. Circuit Court of Appeals ruled. The 9th Circuit ordered the commission to reconsider its decision using a previous ruling by the court as guidance.

Mary O'Driscoll, a spokeswoman for the commission, said as a policy it does not comment on court cases.

California officials had argued for a refund on the grounds that energy sellers failed to file required information with the commission during the energy crisis that would have allowed the commission to monitor prices in the state's energy market.

Those prices skyrocketed, and the state's electricity market was plagued by power shortages in 2000 and 2001. The state itself bought billions of dollars' worth of electricity to keep the lights on.

In Wednesday's ruling, the 9th Circuit ordered the commission to review reports filed by the sellers to determine whether their rates were "just and reasonable" and didn't mask manipulation or accumulation of market power.

"We look forward to a restart of evidentiary hearings at FERC, FERC's strict adherence to the court's instructions, and the speedy grant of refunds to California consumers for the unlawful rates charged," said Kristin Ford, a spokeswoman for the California Department of Justice.

California has already settled claims against more than 60 energy sellers in connection with the energy crisis, resulting in billions of dollars in refunds to California consumers, Ford said.

An administrative law judge sided with the state two years ago in a separate case, determining that more than a dozen electricity wholesalers artificially drove up energy prices. The judge issued a recommendation that officials said could result in another $1.6 billion in refunds from energy wholesalers.

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