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Public Policy by Settlement of Litigation: A Case Study

Public Policy by Settlement of Litigation: A Case Study Abstract In 2002, the California Public Utilities Commission alleged that a group of energy sellers had overcharged California ratepayers by approximately $14 billion. The case went to trial and was dismissed, appealed, and ultimately remanded to the Federal Energy Regulatory Commission. It remained there until March 2012, when the CPUC and the Dynegy parties, a subset of the original group of defendants, announced that a settlement agreement had been reached wherein the California ratepayer claims (alleged to be almost $1 billion) would be dismissed. In return, NRG, successor to the Dynegy parties, would: 1) pay the CPUC $20 million and 2) invest $102.5 million in California to expand its electric vehicle charging infrastructure. We view NRG’s required investment as a subsidy equal to the expected value of the CPUC’s claims against the Dynegy parties. The agreement and the legal process by which it was arrived at have important legal, economic, and public policy implications. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png California Journal of Politics and Policy de Gruyter

Public Policy by Settlement of Litigation: A Case Study

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Publisher
de Gruyter
Copyright
Copyright © 2014 by the
ISSN
2194-6132
eISSN
1944-4370
DOI
10.1515/cjpp-2013-0035
Publisher site
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Abstract

Abstract In 2002, the California Public Utilities Commission alleged that a group of energy sellers had overcharged California ratepayers by approximately $14 billion. The case went to trial and was dismissed, appealed, and ultimately remanded to the Federal Energy Regulatory Commission. It remained there until March 2012, when the CPUC and the Dynegy parties, a subset of the original group of defendants, announced that a settlement agreement had been reached wherein the California ratepayer claims (alleged to be almost $1 billion) would be dismissed. In return, NRG, successor to the Dynegy parties, would: 1) pay the CPUC $20 million and 2) invest $102.5 million in California to expand its electric vehicle charging infrastructure. We view NRG’s required investment as a subsidy equal to the expected value of the CPUC’s claims against the Dynegy parties. The agreement and the legal process by which it was arrived at have important legal, economic, and public policy implications.

Journal

California Journal of Politics and Policy – de Gruyter

Published: Oct 1, 2014

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