Utility demands refund from Kaiser
Suit says firm should pay $60 million for overcharge
John Stucke
Staff writer
Clark Public Utilities claims it was overcharged for electricity during last year's energy crisis and wants a $60 million refund from Kaiser Aluminum Corp.
The Vancouver-based utility issued $100 million in bonds to pay for a two-month supply of energy. About two-thirds of the money went to Kaiser.
For the 155,000 ratepayers served by Clark, paying back the bonds will cost, on average, about $2 more per month for the next 10 years, said spokesman Mick Shutt.
Kaiser called Clark's suit baseless.
"There's absolutely no basis for this kind of claim," said Kaiser spokesman Scott Lamb.
In late 2000 and through most of 2001, Kaiser curtailed operations at its Mead and Tacoma smelters. The company employed the Bonneville Power Administration to resell its allotment of federal electricity into the soaring energy market and collected about $485 million. The whopping profits earned Kaiser criticism and government reviews, but the company has steadfastly maintained it did nothing wrong.
U.S. Sens. Maria Cantwell and Patty Murray have urged an investigation into the energy sales, contending that Kaiser misspent the power remarketing proceeds.
Now Clark is claiming that Kaiser failed to obtain authorization from the Federal Energy Regulatory Commission to sell the power. It claims Kaiser enjoyed a $60 million profit on two months' worth of power that should have cost $4 million.
Kaiser has since filed for bankruptcy. That has forced Clark to first ask the bankruptcy judge to lift a stay against other actions so that the utility can file a complaint requesting FERC review the case and find the sales illegal.
Lamb said the request is unmerited.
"It wasn't even Kaiser that sold the power to Clark. It was BPA who resold our power to Clark," Lamb said. "Under the term of our contract with BPA, we returned the power, they sold it and the proceeds came back."
Also, Lamb said, FERC lacks jurisdiction over such power sales.
He added: "Here's a final point. Clark County was a willing purchaser from BPA. In fact, a representative of the county the utility serves said at the time it was a good deal."
Clark first sought a refund from Kaiser last year, but the request was rejected by an administrative law judge.