Energy Firm, State Complete Settlement
California Atty. Gen. Bill Lockyer decided Friday to complete a settlement that calls for the state to drop price-gouging lawsuits against Williams Cos. in exchange for concessions on long-term electricity contracts valued at more than $1.8 billion.
The tentative agreement was threatened after disclosures last month that Williams may have conspired with AES Corp. to cut power supplies to California in early 2000.
But after lawyers from Lockyer’s office made three trips to Williams’ Tulsa, Okla., headquarters to conduct interviews with 45 Williams employees and review 300 boxes of documents, “we came out of our due-diligence period still feeling comfortable with the agreement,” Lockyer spokesman Tom Dresslar said.
Williams spokeswoman Julie Gentz said concluding the settlement was “a significant milestone for the company.”
Williams will shave as much as $1.4 billion off a $4.3-billion contract to supply electricity to California and will provide more than $400 million in other concessions.
The state will drop its civil lawsuits against Williams.
The AES-Williams matter, involving taped conversations between traders cutting deals to shut down one power plant and to prolong maintenance on another, was investigated by the Federal Energy Regulatory Commission. Williams settled the inquiry without admitting wrongdoing by agreeing to pay $8 million.
The stock prices of most major power suppliers to California rose after a decision Thursday by a FERC judge that California utilities owe generators $1.2 billion after accounting for $1.8 billion in refunds that generators owe utilities.
On the New York Stock Exchange, Williams gained 48 cents to $2.82 and AES rose 4 cents to $3.25. Among other firms, Reliant Resources Inc. jumped 50 cents to $2.75; Dynegy Inc. added 15 cents to $1.05.
