Reliant Energy Settles Price Gouging Claims for $460 MillionAug 16, 2005 | www.Newsinferno.com
Q. When is an energy crisis really not a crisis? A. When it is little more than the product of corporate greed on the part of the energy company itself.
California based Reliant Energy Inc. has agreed to pay a total of $460 million to settle a lawsuit that claimed it cheated consumers by artificially manipulating electricity prices during the so-called California energy crisis in 2000 and 2001.
Of that sum, $453 million is headed to California Consumers and Pacific Gas & Electric and $7 will go to consumers in Washington and Oregon.
The law suit alleged that Reliant intentionally held back electricity and natural gas during the energy “crisis.” As energy bills soared uncontrollably, California consumers were faced with rolling blackouts and the state’s two largest utility companies were forced into bankruptcy.
According to the settlement, Southern California Edison customers will have their monthly bills subsidized by $130 million and beginning in January, 2006, Pacific Gas & Electric, California's largest utility, will receive $230 million. This includes $185 million for electricity overcharges and $40 million for natural-gas overcharges and manipulation.
California Attorney General William Lockyer stated: "This settlement holds Reliant accountable for its substantial role in the rip-off that was the energy crisis." Reliant "ran roughshod over California consumers, taxpayers and businesses,"
Two years ago Reliant also paid close to $14 million to settle charges brought by the Federal Energy Regulatory Commission that Reliant traders actually shut down some of the company’s California plants in order to inflate energy prices.