Williams In Energy Deal With CaliforniaNov 11, 2002 | FT.com
Williams, the Oklahoma energy marketing company, has reached an agreement with California intended to resolve claims and litigation related to the state's energy crisis of 2000 and 2001.
The deal will give the state cash payments of $150m, savings of more than 25 per cent on long-term power price contracts originally valued at $4.3bn, and six turbine generators.
Williams also agreed to help with the attorney general's investigations into the causes of the crisis, and increase electricity supplies.
The agreement was announced after Williams, and other suppliers to California, including Reliant Resources, Duke Energy and Mirant, said they had received subpoenas from the Justice Department related to their role in the state's power market.
The compensation and price reductions will help reduce the burdens on state finances, which are being used to buy electricity on the wholesale market.
Until Monday Williams was one of the largest power companies still at odds with Californian authorities which claim the state suffered billions of dollars in losses because of widespread market manipulation.
Steve Malcolm, chairman and chief executive, said the settlement ended "numerous legal entanglements". A conclusion was within reach, he said, which would allow the company to move forward.
In late trading Williams' stock gained about 15 per cent. At the official close Reliant shares were down 14 per cent, Duke was 8 per cent lower, and Mirant had lost 15 per cent.