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Reliant agrees to refund $13.8 million to California
Friday January 31, 2003
By MARK SHERMAN
Associated Press Writer
WASHINGTON (AP) Reliant Energy agreed Friday to refund $13.8
million to settle claims that employees withheld power for two days
to drive up prices in California, the latest evidence that energy
companies manipulated the state's power supply, federal energy
regulators said.
The refund covers two days in June 2000, when transcripts of
telephone calls between Reliant employees show that employees held
back power to California's newly deregulated market.
The transcripts were posted on the Web site of the Federal
Energy Regulatory Commission, which announced the refund. The
amount reflects the most money Reliant could have made by keeping
power from the market, FERC said.
Houston-based Reliant admitted no wrongdoing in the agreement
but said a senior official who directed traders to withhold power
is no longer with the company. The company also called the June
2000 actions ``an isolated situation.''
California Public Utilities Commission President Michael Peevey
welcomed the refund and said he hopes energy regulators ``continue
with that trend'' in other investigations of California's energy
crisis in 2000 and 2001.
The settlement is separate from another proceeding at FERC in
which California is seeking $8.9 billion from a number of firms for
excessive power prices. A FERC judge has said companies charged
$1.8 billion too much, but he did not consider evidence of
manipulation.
FERC is expected to make a final decision on the larger refund
issue in the spring.
Reliant cooperated with the investigation that resulted in
Friday's agreement, FERC said.
In one transcript, an unidentified Reliant trader said, ``We
decided that the prices were too low on the daily market, so we
shut down everything except'' one plant.
``Excellent. Excellent,'' a colleague replied.
In the same conversation, the two employees bragged about
keeping an enormous amount of power from being supplied. ``We
pulled about 2,000 megs off the market,'' said one person.
The other replied, ``That's sweet.''
The transcripts do not contain the names of the employees.
Two-thousand megawatts is enough to power 1.5 million homes.
Friday's announcement was an outgrowth of an ongoing
investigation into possible manipulation of the deregulated
California market. In May, FERC released internal Enron Corp. memos
that described trading schemes known as ``Get Shorty'' and ``Fat
Boy'' designed to boost prices.
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On the Net:
Federal Energy Regulatory Commission: http://www.ferc.gov
Reliant: http://www.reliantresources.com
(Copyright 2003 by The Associated Press. All Rights Reserved.)
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