Reliant Energy to Refund $13.8 Million

Reliant Energy agreed Friday to refund $13.8 million for withholding power to drive up prices in California in 2000, the latest evidence that energy companies manipulated the state’s power supply.

The refund covers two days in June 2000, when transcripts of telephone calls between Reliant employees show that employees withheld power to drive up prices in California’s newly deregulated market. The transcripts were posted on the Web site of the Federal Energy Regulatory Commission, which announced the refunds.

The amount reflects the most money Reliant could have made by keeping power from the market, FERC said in a statement.

California Public Utilities Commission President Michael Peevey 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 a FERC proceeding in which California is seeking $8.9 billion 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 of manipulation, FERC said.

In one call, 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 to the state. “We pulled about 2,000 megs off the market,” said one.

“That’s sweet,” the other said.

Two thousand megawatts is enough to power 1.5 million homes.

Houston-based Reliant admitted no wrongdoing, but said that the senior official who directed traders to withhold power is no longer with the company. Reliant called the June 2000 actions “an isolated situation.”