Attorney General Lockyer Asks Federal Court to End Illegal Market Control of Power Plants Used to Drive Up Prices in California's Energy Crisis

Monday, April 15, 2002
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(SACRAMENTO) – Attorney General Bill Lockyer today filed antitrust lawsuits against Mirant and Reliant, asking the federal court to order the two major energy companies to divest power plants to end their illegal control of electricity supplies used to drive up prices in California's recent energy crisis.

"Our investigation discovered that these major power companies were able to raise prices by illegally taking advantage of their control of California's electricity markets," Lockyer said. "The antitrust lawsuits filed today are aimed at restoring real competition by requiring these energy companies to sell off some of their power plants."

Filed in the federal court in San Francisco, the complaints charge Reliant and Mirant with acquiring an excessive number of California power plants in violation of federal antitrust laws. The complaints state that Reliant and Mirant, two of the largest energy companies in the world, controlled too much of California's available electricity supply, which allowed them to illegally exercise market power, limit competition and raise prices.

Mirant's California plants generate 3,056 megawatts of electricity and control 44% of the northern California electricity market. Reliant's California plants generate 3,776 megawatts of electricity and control 28% of the southern California electricity market.

Attorney General Lockyer noted that other antitrust lawsuits may be filed as the state's investigation into California's energy crisis continues. The complaints against Mirant and Reliant, filed under Section 7 of the federal Clayton Act governing mergers and Section 17200 of the California Business and Professions Code, seek divestiture and monetary relief, including damages, restitution, civil penalties and disgorgement of illegal profits.

The attorney general also filed a state court complaint against Reliant, alleging that the power company made thousands of illegally priced energy sales in violation of California's Unfair Competition Act. Similar complaints were filed last week against Mirant, Williams, Powerex and Coral Power over illegally priced sales from early 2000 through 2001. State law provides penalties of up to $2,500 per violation.

These complaints are the latest resulting from the Attorney General's investigation into potential illegal conduct by power companies and others during California's energy crisis.

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