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 annd@pennwell.com

Sponsored by FLSmidth

Related Articles

Nuclear Energy Institute NEI nuclear power plants capacity factor generation electricity South Texas Project Braidwood Palo Verde Hope Creek St. Lucie Three Mile Island Surry Peach Bottom Perry Farley Susquehanna Grand Gulf Seabrook Oconee

NEI: U.S. nuclear power plants operated at record capacity factor in 2014

One hundred U.S. nuclear power plants generated electricity at a capacity factor of 92 percent in 2014, according to statistics from the NEI.

Duke Energy to build solar power facility at North Carolina military camp

Follow Power Engineering on Twitter

Latest News

 Indian Point nuclear Unit 3 down for $50mn refueling outage

Indian Point nuclear Unit 3 down for $50mn refueling outage

Entergy (NYSE: ETR)’s Indian Point nuclear power plant Unit 3 in New York shut down for a pla...
 Parties argue Clean Power Plan legality at federal appeals court

Parties argue Clean Power Plan legality at federal appeals court

The nation's largest coal producer, Peabody Energy (NYSE: BTU), filed comments on Feb. 27 at ...
 ERCOT expects enough power generation to meet spring, summer demand

ERCOT expects enough power generation to meet spring, summer demand

Grid operator Electric Reliability Council of Texas (ERCOT) said the region will have suffici...
 Plant Vogtle nuclear reactors expected to cost $7.5bn

Plant Vogtle nuclear reactors expected to cost $7.5bn

Georgia Power, a subsidiary of Southern Co. (NYSE: SO), filed documents with the state of Geo...
 Bushehr nuclear power plant shut down for maintenance

Bushehr nuclear power plant shut down for maintenance

The Bushehr nuclear power plant in Iran shut down for maintenance.

 Exelon proposes Low Carbon Portfolio Standard, touts importance of nuclear

Exelon proposes Low Carbon Portfolio Standard, touts importance of nuclear

Exelon (NYSE: EXC) and Illinois lawmakers filed legislation for a plan that would reduce carb...
 Limerick nuclear unit back online after brief outage

Limerick nuclear unit back online after brief outage

Workers at the Limerick nuclear power plant in Pennsylvania brought Unit 1 back online after ...
 NRC increases oversight of Palisades nuclear power plant

NRC increases oversight of Palisades nuclear power plant

The U.S. Nuclear Regulatory Commission (NRC) has increased its oversight of the Palisades Nuc...

Power Engineering Current Issue

01/01/2015
Volume 119, Issue 1
1501pe-cover-lg

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.

Archived Articles

2000 | 2001 | 2002 | 2003 | 2004 | 2005 | 2006 | 2007 | 2008 | 2009 | 2010 | 2011 | 2012 | 2013 | 2014 | 2015

Power Industry Wire News

Department of Defense Supports Neumedicines With Groundbreaking Grant for Surgical Site Infection Therapy

Department of Defense Supports Neumedicines With Groundbreaking Grant for Surgical Site...

Range Declares Quarterly Dividend

Range Declares Quarterly Dividend

Magnum Hunter Resources Declares Monthly Cash Dividend on Series C Preferred Stock, Series D Preferred Stock and Series E Preferred Stock

Magnum Hunter Resources Declares Monthly Cash Dividend on Series C Preferred Stock, Ser...

People Power Enables Developers and Manufacturers to Quickly Control New Devices From a Smartphone With Launch of FabrUX

People Power Enables Developers and Manufacturers to Quickly Control New Devices From a...

Nouria Energy Selects CBX for C-Store Design Development

Nouria Energy Selects CBX for C-Store Design Development

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 >>