October 17, 2003—The Federal Energy Regulatory Commission (FERC) recently approved a settlement between the commission’s enforcement staff and Houston-based Reliant Energy Services Inc., and the company’s five California-based generating subsidiaries, which resolves matters relating to California’s electricity crisis in 2000 and 2001. The proceeds of the settlement to resolve pending cases stemming from a FERC staff investigation of the West’s energy problems could total $50 million.
The settlement agreement, FERC’s largest ever, addresses allegations regarding potentially manipulative bidding practices in the California markets, including economic withholding, physical withholding of generation, and a FERC staff finding that Reliant attempted to manipulate prices at an electricity trading hub near the California border.
The agreement does not resolve any liabilities Reliant may have in the overall California refund case, which is an ongoing proceeding before FERC. Also separate from the agreement is a pending settlement between Reliant and FERC trial staff involving alleged market gaming.
Reliant did not admit to the violations in agreeing to the settlement.
