By Miriam Raftery
Photo: McCain Valley in San Diego’s East County, site of Iberdrola’s planned Tule Wind energy project
April 14, 2016 (Sacramento) – California’s Public Utilities Commission announced yesterday that an administrative law judge for the Federal Energy Regulatory Commission has ruled that Iberdrola Renewables LLC and Shell Energy North America defrauded California state officials out of $1.1 billion on the heels of the Enron energy scandal.
Iberdrola, a Spanish energy corporation, recently won approval from the federal government to build the controversial Tule Wind project in McCain Valley in a federal recreation area.
Shell and Iberdrola conned state officials during negotiations over long-term energy deals, judge Steven Glazer found. Iberdrola overcharged by $371 million, while Shell’s contract was $779 million too high, leaving California’s ratepayers footing the bill.
The schemes date back to the 2001 energy crisis following deregulation in the era of Enron market manipulation, rolling blackouts and soaring energy prices. Since then, several other energy companies have been held accountable, forced to pay refunds to California utility customers.
Seeking to ease that crisis, the state negotiated long-term contracts on behalf of California utilities, paying high prices for long term stability. But state regulators successfully argued that those contracts were negotiated under duress and manipulated by the energy giants.
CPUC Commissioner Florio voiced gratitude that the judge “agreed that FERC has a duty to vindicate the public interest and protect consumers from exorbitant overcharges that Shell and Iberdrola pocketed due to the worst electricity crisis and market meltdown in modern history,” the Sacramento Bee reported after the ruling.