California official sues energy companies for unfair business practices

by Ann de Rouffignac
OGJ Online

HOUSTON, May 3 -- California Lt. Gov. Cruz Bustamante and assembly member Barbara Matthews (D-Tracy) filed suit as individuals and on behalf of the general public in California seeking unspecified damages from the "unlawful and fraudulent" sale of electricity by out-of-state generators.

The suit filed Wednesday in Los Angeles Superior Court names Williams, Mirant Corp., Reliant Energy Inc, Duke Energy Inc., and Dynegy Inc. and individual company CEOs and other executives as defendants.

The companies own or control 19 gas-fired generation plants in California.

The plaintiffs allege the increase in the total energy bill for California is the result of the defendants' antitrust and unlawful fraudulent and unfair business practices. Consumers paid or will pay $5 billion for power in 1998, $7 billion in 1999, $28 billion for 2000, and a projected $70 billion for 2001, according to the complaint.

The suit alleges that each defendant company "acted with the anticompetitive purpose of using economic and physical withholding of electricity from the California electric generation market in order to derive monopoly profits."

Reliant Energy spokesman Richard Wheatley said these allegations and the entire lawsuit are "false, defamatory and without merit."

Gov. Gray Davis commended Bustamante and Matthews for "opening a second front in the California war against price gougers."

At a time California needs added power supplies, the rhetoric and legal actions could spawn unintended consequences. At least two generators are deliberating whether to go forward with new California power projects until the "negative atmosphere" stops.

Mirant Corp. planned to expand two existing power plants which are in the permitting stages. But the projects will not go forward until the company "reassesses the economic climate" in California, said Mirant spokesman Chuck Griffin.

Reliant Energy Inc. has discretionary capital of $1.4 billion to spend through 2003 on power projects to serve the power-starved western grid. One of the projects could be located within the state of California.

"California officials wallowing in the negative atmosphere discourage companies from bringing discretionary capital into the state," said Wheatley. He added the lawsuit clearly demonstrates the lack of focus on the real issues by California officials, and shows they have no understanding of how the electricity markets function.

Executives named include Keith Bailey, CEO of Williams; A.W. Dahlbert of Southern Co.; S. Marce Fuller, CEO of Mirant; Steve Letbetter, Reliant's CEO; Richard Priory, CEO of Duke Energy Corp.; and Dynegy's CEO Charles (Chuck) Watson.

The lawsuit alleges the individual corporate executives were "motivated to engage in unlawful acts and practices" for personal gain. "They personally profit through their stock options, personal compensation packages, and increases in the value of the stock they own in their respective companies."

Contact Ann de Rouffignac at

Sponsored by FLSmidth

Related Articles

Duke Energy Renewables' begins Phase I of North Carolina solar power project

SunEnergy1 has begun installing JinkoSolar panels at the Duke Energy (NYSE: DUK) Renewables-owned Capital Partners Solar Project in Pasquotank County, North Carolina.

Duke Energy Progress seeks FERC approval to acquire NCEMPA generation assets for $1.2B

Duke Energy (NYSE: DUK) Progress filed an asset purchase agreement (APA) approval request with the Federal Energy Regulatory Commission (FERC) to acquire the North Carolina Eastern Municipal Power Agency's (NCEMPA) generating assets for approximately $1.2 billion.

Follow Power Engineering on Twitter

Products Showcase

Dynamic Fluoride Ion cleaning DFIC of industrial natural gas turbines Hi-Tech Furnace Systems

Dynamic Fluoride Ion Cleaning of IGT Parts

The Dynamic Fluoride Ion Cleaning (DFIC) Process from Hi-Tech Furnace Systems is able to clean deep, narrow cracks of oxides by cycling between negative, atmospheric, and positive pressure.

Latest News

Shutterstock coal production trucks

Weekly Coal Production

The Weekly Coal Production shows how much coal is being produced across the U.S.

Federal Reserve Bank of Dallas Weekly Economic Indicators financial business

The Federal Reserve Bank of Dallas' Economic Indicators

The Federal Reserve Bank of Dallas offers a glimpse into how the markets are doing domestical...

Kvaerner awarded contract for gas-fired power plant in Delaware

Kvaerner North American Construction Inc. and its joint venture partner, Parsons Brinckerhoff...

Canadian Solar purchases two solar projects

Canadian Solar Inc. has acquired a majority interest in two utility-scale solar power project...

Operators Restart Unit 2 at PPL Susquehanna

Unit 2 at the PPL Susquehanna nuclear power plant near Berwick, Pa. resumed generating electr...

Settlement agreement limits cost recovery at Edwardsport

The Indiana Utility Regulatory Commission (IURC) on Dec. 27 modified and approved a settlemen...

Toshiba in talks to sell portion of Westinghouse nuclear unit

Toshiba Corp is in talks  to sell up to 16% of its stake in the Westinghouse Electric Co...

Utah nixes nuclear waste storage facility

Plans to park radioactive waste at a storage facility in Utah have been officially called off.

Archived Articles

2000 | 2001 | 2002 | 2003 | 2004 | 2005 | 2006 | 2007 | 2008 | 2009 | 2010 | 2011 | 2012 | 2013

Power Engineering Current Issue

Volume 118, Issue 3

Power Industry Wire News

UGE International Reports Third Quarter 2014 Financial Results

UGE International Reports Third Quarter 2014 Financial Results

Canadian Overseas Petroleum Limited Liberia Update

Canadian Overseas Petroleum Limited Liberia Update

American Leisure Holdings, Inc. Announces Letter of Intent to Acquire Wroblewski Oil and Gas Company

American Leisure Holdings, Inc. Announces Letter of Intent to Acquire Wroblewski Oil an...

Blue Earth Completes $10 Million Private Placement

Blue Earth Completes $10 Million Private Placement

Energy Services Company ENSERVCO to Present at LD Micro Conference

Energy Services Company ENSERVCO to Present at LD Micro Conference

Power Engineering

Article Archives for Power Engineering Magazine

Continuing Education

Professional Development Hours

To access a course listing associated to a specific topic listed below, click on the topic of choice from the list below.

Latest Energy Jobs

View more Job Listings >>

Power Engineering Newscasts

EPA chief: carbon caps will boost economy
Australia, Russia enter nuclear power agreement with Argentina
Largest battery energy storage in North America now operational
EPA chief: carbon caps will boost economy Largest battery energy storage in North America now operational Australia, Russia enter nuclear power agreement with Argentina Texas’ Panda Temple combined cycle plant up and running
Siemens agrees to acquire Dresser-Rand
Safety concrete poured at UAE nuclear reactor power project
Foster Wheeler to upgrade natural gas-fired power plant’s emission controls
GE, TransCanada partner on natural gas turbine design
Energy storage global market to grow to $15.6B by 2024; DOE awards $2M to support taller wind turbine towers; Hinkley Point C nuclear project have financial incentives approved; N.J. company building waste-to-energy project in Ireland