ATLANTA, Dec. 19, 2003 — Energy merchant Mirant Corp. has reached a $3.66 million settlement with the Federal Energy Regulatory Commission (FERC) related to its California operations.
The settlement related to electricity ancillary services it offered in California. Mirant, which filed for Chapter 11 bankruptcy protection in July, said the settlement was much less than the $28 million originally requested by California.
Mirant’s senior vice president and general counsel Doug Miller said the settlement is not an admission of guilt and the company settled to save time and money on further litigation.
“As we have clearly stated in the past, Mirant operates by the rules,” Miller said. “We are confident our actions complied with the market rules set by the California Independent System Operator (Cal ISO) and by FERC.”
Ancillary services are various types of generation capacity held for contingency purposes, such as the loss of a critical generation or transmission facility. Ancillary services act as replacement reserves for the Cal ISO to operate its system reliably for the people of California.
This settlement represents a prudent business decision for Mirant. Due to the time and expense involved in protracted litigation, Mirant determined that it would be expeditious to settle the matter and move on.
Mirant settled with FERC for $3.66 million, which is a fraction of the approximately $28 million alleged by the California parties in the original claim made against the company. The settlement is subject to approval by the Bankruptcy Court.
