Attorney General Lockyer Will Seek FERC Rehearing; Files Complaints Against Eight More Power Companies for Illegal Profiteering in California's Energy Crisis

Monday, May 20, 2002
Contact: (415) 703-5837, agpressoffice@doj.ca.gov

(SACRAMENTO) – Attorney General Bill Lockyer said today he will press the Federal Energy Regulatory Commission to order refunds for electricity overcharges in California and filed civil complaints against eight more wholesale power companies over alleged price-gouging during the state's energy crisis.

"FERC's decision today recognizes our argument that power companies failed to file detailed price reports as required by law and that these are serious violations," Lockyer said. "Unfortunately, FERC has refused to order refunds for California for what FERC itself calls serious violations. We intend to ask FERC to reconsider and order the refunds."

The Attorney General in March asked FERC to order expanded refunds going back before October 2000 because power companies had failed to file transaction-specific reports for review by FERC and the public as required by the Federal Power Act. In its ruling Thursday, FERC declined to order the expanded refunds but directed power companies file detailed reports on the prices being charged for electricity.

"Had the transaction-specific reports been required earlier and rate caps been applied, FERC could have prevented the price gouging in California and protected against the market manipulation schemes we now know by such names as Fat Boy, Wash Sales and Death Star," Lockyer said.

In addition to attacking illegal profiteering by power companies through FERC, the Attorney General on Thursday filed complaints in state court against eight more power companies for allegedly charging illegal rates for wholesale electricity during California's energy crisis. The complaints were filed in San Francisco Superior Court against BP Energy, Idaho Power, Merrill Lynch Capital Services, Portland General Electric, Puget Sound Energy, TransAlta, TransCanada and Tuscon Electric.

Similar complaints were filed in April against Reliant, Mirant, Williams, Powerex, Coral Power. The power companies are alleged to have engaged in hundreds of thousands of illegally priced sales from early 2000 through 2001 in violation of the state's unfair business practices law, which could result in civil penalties of up to $2,500 per violation. The complaints contend that by violating the Federal Power Act the energy companies engaged in unlawful and unfair competition in California, which is prohibited by state Business and Professions Code section 17200. The state law considers unlawful, unfair or fraudulent business practices to be unfair competition. The complaints could result in civil penalties of more than $1 billion.

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