Posted on 01/31/2003 5:16:30 PM PST by NormsRevenge
Edited on 04/12/2004 5:47:48 PM PDT by Jim Robinson. [history]
WASHINGTON(AP) - Reliant Energy agreed Friday to refund $13.8 million to settle claims that employees withheld power for two days to drive up prices in California, the latest evidence that energy companies manipulated the state's power supply, federal energy regulators said.
(Excerpt) Read more at sacbee.com ...
Give it to me! I need it more than dizzy Davis!
"Excellent. Excellent," a colleague replied.
In the same conversation, the two employees bragged about keeping an enormous amount of power from being supplied. "We pulled about 2,000 megs off the market," said one person.
The other replied, "That's sweet."
Call Gray Davis what you want but even he rises above these low-life scum bags.
No he's not my hero but your appologies for corrupt, unethical behavior from energy companies to screw innocent citizens is obvious. Davis didn't do anything to himself, everything he does and all the underhanded double dealing behavior by your corporate gods is/was done to us...not Davis.
I know you have problems connecting dots, but actions like this could go right back to why Buck Knives, for example, might be leaving the state...you might also notice the state they chose for their possible move (Idaho) is NOT deregulated...They may think they'll save money on electricity but they haven't got their heating bill yet.
And as to rate payer price caps and no longterm contracts, those were instituted by (R)Pete Wilson's deregulation...in fact this entire mess can be directly tied to his deregulation scam
So if I'm burglarized because I left my doors un-locked it's my fault?...It's amazing how so called conservatives like to use liberal thinking when it's convenient.
To: lewislynn
Once again, you're blaming the firemen for the fire.
130 posted on 01/16/2003 7:05 AM PST by snopercod (Repeal the 17th Amendment!)
[ Post Reply | Private Reply | To 128 | View Replies | Report Abuse ]
Hypocrite!
The individuals could have been the scum of the earth, but I always hate to jump to judgement on things taken out of context. It would be interesting to know more of the details and why the plant ultimate refused to follow the request to stay off line and why the plant restarted, if this is the situation, I remember.
While I really doubt that the following even came close to happening, it does show how the words might have a much different meaning, depending on the context.
"We decided that the prices were too low on the daily market, so we shut down everything except" (one plant)the reason being that we have exceeded our NOx pollution limites and we will be fined several hundred thousand dollars we can't collect with the price caps. The plant operators also told us that there are some vibration problems and if they do bring up the other plants that we could be faced with a huge maintenance penalty if things breaks because of our order to fire the plants up. Therefore after considering everything, it is my opinion to shut all of them down, but one. "Excellent. Excellent," ..analysis of the situation. It is analysis like this that keeps us from loosing our shirt to those .......#@%*&!'s. "We pulled about 2,000 megs off the market," ...and I feel bad about it, but at least we were able to keep one plant on at a cost that shouldn't bankrupt our firm. I feel like I have at least helped out with that one that didn't have vibration problems and that we did the right thing. "That's sweet." You showed compansion. Good job and great analysis.
I doubt that the above happened. I also expect that there was some evil in the hearts of the traders who were singled out as responsible for the fines. I am just saying that "out of context quotes" can be lined up to make a staint sound like a devil.
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Here's some better information from the Houston Chronicle:
Reliant Resources agreed to pay $13.8 million to California customers to settle allegations that it intentionally shut down power plants for two days to drive up power prices.
The case against the Houston power company was backed up by transcripts of Reliant employees talking about how they were taking power off the electric market to drive up prices.
In one case, an unnamed trader bragged that the plant shutdowns turned a $3 million loss into a more than $4 million profit.
It was done, said one plant operator, "more for some market manipulation attempts on our part" than for needed repairs.
The company said its actions didn't violate the laws or regulations at the time, and there was no evidence of any other such move during the California energy crisis.
This is the first settlement from an inquiry the Federal Energy Regulatory Commission began a year ago into California trading strategies used by Enron Corp. and others. A full report is due by the end of March.
Williams Cos. settled similar allegations made against it in 2001 by forgoing $8 million in payments.
The FERC has approved the Reliant settlement, which will be paid to those who were customers of the now-defunct California Power Exchange on June 21-22, 2000.
The power exchange, a clearinghouse set up for the wholesale buying and selling of electricity, was driven out of the power trading business by huge losses because it couldn't cover the cost of the surge in electric prices during that period.
Reliant said it discovered this situation when it reviewed the tapes of all the phone conversations from its trading operations.
The conversations during this two-day period were the only such incidents found in a review of trading records, said Reliant spokesman Richard Wheatley.
The company brought this matter to FERC. He declined to identify any of the parties involved, but said a vice president involved is no longer with the company.
While these actions were not in violation of laws or regulations at the time, the company said, "The conduct of the Reliant traders involved in this matter was not in keeping with how Reliant operates or the expected behavior of its employees."
"While it is not evident that the traders' actions had any impact on the market, the payment and other conditions attached to the agreement were established to resolve any concerns regarding their actions," the company said in a written statement.
Bryan Lee, a FERC spokesman, would not say if any other similar deals were in the works with other companies.
"We have an ongoing investigation that this sprang from," Lee said.
There have long been complaints by Californians that power trading firms were rigging the market by shutting down plants to artificially create shortages.
The admissions would seem to back that claim, but only covered one company's behavior over a short period of time when prices were moderate and there were no power shortages, said Wheatley.
This deal spurred top California politicians to renew their demands for billions from power companies, which they blame for the energy crisis.
Sen. Diane Feinstein said the Reliant settlement proves market manipulation was not an isolated incident, "but rather was a part of a larger strategy to increase energy prices, sometimes with the knowledge of energy company executives."
The California Democrat has proposed legislation to increase the regulation of energy markets and raise the penalties when someone is caught.
Among those with the most at stake was the Independent System Operator, better known as the ISO. That agency, which runs most of the state power grid, stepped in to stabilize the market when the power exchange could no longer afford to buy the power needed to keep the lights on.
"The ISO has been saying as far back as late 2000 that market participants were withholding power from the market" either by shutting plants down or setting prices that were unrealistically high, said ISO spokesman Gregg Fishman. "In that sense it is good to see the FERC acting on that knowledge."
Transcripts of conversations among Reliant employees showed that before the shutdowns, traders were talking about the possibility of losses on their trades because prices were not as high as they'd expected.
That suddenly changed after the units were shut down, causing prices to jump and wiping out those losses.
In a transcript posted on the commission's Web site, one Reliant trader told another his team had lost $3 million at the beginning of the week.
"We decided as a group that we were going to make it go back up, so we turned like almost every plant off," the trader said, according to the transcript. "It worked. Prices went back up. Made back about $4 million, actually more than that, $5 million."
An unnamed trader told a co-worker that a manager in the division knew about the decision to cut supplies, adding, "We made all the money back and he thought that, I mean he just thought that was the coolest strategy ever."
As part of the settlement, Reliant must retain an independent engineering company for two years, which will determine whether any outages at Reliant's California plants are legitimate.
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