Utility Exec Rejects the Governor’s Criticism

The top executive of a Houston-based energy company singled out for criticism this week by Gov. Gray Davis defended his company Friday and warned that the governor’s rhetoric will ultimately hurt California.

“On Wednesday we were called obstructionist,” said Joe Bob Perkins, chief executive of Reliant Energy, which bought five Southern California power plants when the state launched deregulation in 1998.

“I don’t think it’s obstructionist to supply record amounts of power from old plants in order to keep the lights on,” Perkins said. “I don’t think it’s obstructionist to invest more than $80 million in 2000 alone to upgrade the plants and reduce emission levels. I don’t think it’s obstructionist to continue to run our facilities at times when there’s been no guarantee of payment.”

In a telephone conference call with reporters, Perkins said, “California officials must lessen the rhetoric and focus on efforts to mitigate the impacts of summer blackouts.”

Perkins said threats of windfall profits taxes and plant seizures could scare off substantial business from California.

For months, Davis has disparaged private power plant owners in California as gougers and profiteers, but until last week he did not single out individual companies.

Last Thursday, after state power buyers paid an extraordinary $1,900 per megawatt-hour, Davis broke the confidentiality he had maintained on state power purchases and named Reliant as the seller.

Reliant has sued to get out of its obligation to sell power to the state and refused to discuss forgiving some portion of the $307 million it is owed by California utilities.

“They’re one of only a couple of generators that say absolutely no way, no how are they going to negotiate for anything less than 100%,” Davis spokesman Steve Maviglio said after the Reliant executive’s remarks.

The governor’s recent attack has made some Reliant officials wonder if he is building a case to seize control of its power plants. Davis has threatened to commandeer plants to bring down wholesale power costs.

Perkins said his company set a high price last week to discourage the state from buying the power, which was produced at a small, inefficient plant near Santa Barbara that cannot run more than nine days a year because of air pollution regulations.

Reliant officials said they wanted to reserve the plant for use later this summer.

Maviglio said Reliant’s argument “defies logic.”

“When you make a bid . . . you want somebody to buy the power.”