California has won a long-running battle with BC Hydro over high prices charged for electricity during an energy crisis, and it will cost the government utility three-quarters of a billion dollars.
BC Hydro’s Powerex energy-trading unit has been pursued for more than a decade by California, which also went after dozens of other electricity suppliers.
Hydro has agreed to pay $750 million US to settle the case: a $477 million credit for monies owed by California buyers to Powerex, plus $273 US million in cash. Powerex says it will result in a loss of $101 million Canadian this year.
California claims Powerex engaged in market manipulation during power crises in 2000 and 2001. But under the settlement, Hydro and Powerex admit no wrong-doing.
Hydro and the provincial government say the settlement protects BC from a potential $3.2-billion legal liability, $50-million in future legal costs, and $125 million per year in interest.
The deal comes days before a US regulatory hearing into the case.