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(RIVERSIDE, Calif.) – Attorney General Bill Lockyer announced today the successful criminal conviction of a nursing home administrator who failed to comply with the state's elder and dependent adult abuse mandatory reporting law.

Monday, April 22, 2002
Contact: (415) 703-5837

(SACRAMENTO) – Attorney General Bill Lockyer announced today the first settlements of enforcement complaints from the state's investigation into illegal electricity pricing practices in California, resulting in payments of $8.5 million by San Jose-based Calpine and Maryland-based Constellation and special financing for the energy retrofitting of schools and other public buildings.

"Today's settlements are the latest developments in our energy investigation into power companies for illegal electricity pricing practices during the state's recent energy crisis," Lockyer said. "These settlements end our enforcement claims against Calpine and Constellation who were willing to renegotiate their long-term contracts with the state and who were alleged to have committed smaller violations compared to other energy companies. What's more, the settlements provide a way to help retrofit our schools, hospitals and other public buildings with alternative energy technologies like solar power to reduce their dependence on existing electricity power grids."

Under the settlements, Calpine will pay the Attorney General a total $6 million over two and a half years and Constellation will pay $2.5 million. Of the total, $1.5 million from Calpine and $1.25 million from Constellation will be placed in a special fund to be created for the retrofitting of public buildings using solar or other alternative energy technology. The remainder of the payments will be used to reimburse the state for energy investigation costs. The settlements were negotiated separately from the new long-term contracts with Calpine and Constellation announced by the Governor, the California Public Utilities Commission, the Department of Water and Power and Electricity Oversight Board.

"These enforcement settlements are important in holding energy companies accountable for taking unfair advantage of Californians during the energy crisis," Lockyer said. "We appreciate Calpine and Constellation taking this step and providing California with a unique opportunity to weave together effective energy conservation with leading alternative energy technology so that public buildings can become more independent of traditional electricity power sources."

Lockyer noted that the first round of settlements avoid what otherwise would likely be lengthy legal battles with the two power companies that could take years to resolve. He added that the settlements offer a model approach to settle energy company claims that will benefit the state through the retrofitting of schools.

The Attorney General earlier this month filed complaints in San Francisco Superior Court against Mirant, Williams, Powerex, Coral and Reliant, alleging that these five power companies made hundreds of thousands of illegally priced energy sales in the California electricity market in violation of the state's Unfair Competition Act. The complaints are part of an expected series against power companies believed to have engaged in unfair business practices by charging rates that under the Federal Power Act were unjust, unreasonable and illegal. In March, the Attorney General asked the Federal Energy Regulatory Commission to order expanded refunds for California because power companies since at least May 2000 failed to file their rates and allow public review as required by law.

The Attorney General also filed in March state court complaints against Dynegy, Reliant, Mirant and Williams, alleging that these four major wholesale power companies engaged in the so-called double-selling of power in flagrant violation of rules designed to ensure the safe and reliable operation of the high-voltage transmission system serving California and unjustly profiting by charging millions of dollars for emergency generating capacity that the companies never provided as promised. Last week, the Attorney General filed antitrust claims in federal court against Reliant and Mirant seeking divestiture of power plants to end their illegal control of electricity supplies used to drive up prices in California. The complaints contend the power companies were able to exercise market power to illegally limit competition and raise prices in California's energy crisis. In other developments from the Attorney General's energy investigation, a hearing is set Tuesday in federal bankruptcy court on the Attorney General's state unfair business practices complaint against Pacific Gas & Electric Corp. The complaint filed in San Francisco Superior Court alleges that PG&E Corp. drained the assets of its California utility and put billions of dollars into unregulated affiliates in violation of its agreement to ensure the viability of the utility and protect ratepayers. The case was transferred to the federal bankruptcy court under a procedural motion by PG&E. The Attorney General is seeking to have the case returned to state court to address violations of California's unfair business practices law.

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