Westerners are stuck paying $3 billion to energy companies that colluded to gang-rape the free market. California, Washington, and Nevada were planning to return the money to customers, but the Supreme Court recently ruled that the industry manipulated the market, fair and square.

The California Public Utilities Commission and state officials believed that crisis-era pacts with San Diego-based Sempra Energy and others were costing consumers an extra $1.45 billion to $3.08 billion — an amount they had hoped to return to electricity customers, possibly by reducing or eliminating future charges.

A Washington utility had hoped to get relief from a nine-year power contract with Morgan Stanley Capital Group. Under that contract, the Snohomish County Public Utility District is paying $105 a megawatt-hour, well above the historic norm for the Pacific Northwest of $24 a megawatt-hour, but also well under the $3,300 a megawatt-hour hit at the peak of the energy crisis that spread beyond California’s borders, according to the court’s synopsis.

Justice Scalia scolded the states for whining about “buyer’s remorse.” Roger Berliner, a lawyer for Nevada utility Sierra Pacific Resources, applauded the Justice for his unrivaled ability to blind himself to reason:

“It was the failure of regulators to protect consumers from market manipulation” that caused the utilities to overpay for power. I don’t think the court appreciated the extent to which the dysfunction in the market made it impossible for there to be just and reasonable contracts.”

Supreme Court deals blow to states on electricity [Los Angeles Times]

(Photo: Getty)

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