Avangrid says FERC rules in favor in California energy crisis litigation

Avangrid announced that the Federal Energy Regulatory Commission issued a decision in favor of Avangrid Renewables, LLC, an indirect, wholly-owned subsidiary of Avangrid, in the litigation related to the California energy crisis of 2000-2001. The case was originally brought in 2002 by two California agencies with respect to a long-term power purchase agreement entered into by Iberdrola Renewables, LLC, as seller, and the California Department of Water Resources, or CDWR, as purchaser, alleging that the terms and conditions of the power purchase agreement were unjust and unreasonable. On December 20, 2023, FERC issued an Order on Initial Decision that reversed in part, and affirmed in part, the Presiding Judge’s Initial Decision. Specifically, FERC found that, while Renewables is a proper party to the proceedings, the Mobile-Sierra presumption attaches to its contract, and the Mobile-Sierra presumption is not overcome or avoided with regard to it. Consequently, FERC found that the contract is just and reasonable and refunds for Renewables’ contract are not warranted. “We’re very pleased that FERC agreed with us that we entered into the bilateral power purchase contracts appropriately and complied with all applicable legal standards and requirements,” said Pedro Azagra, Avangrid CEO. “We’ve consistently argued that the power purchase contracts were negotiated between sophisticated parties and did not impose an excessive burden on customers.”