Feds indict first company for market manipulation in California energy cri

[Judi Lynn]

Feds indict first company for market manipulation in California energy crisis
Associated Press
Posted Friday, April 09, 2004

WASHINGTON - A subsidiary of Reliant Resources Inc. and four of its employees were indicted Thursday on charges of driving up prices during the 2000-2001 California energy crisis. It's the first company to face criminal charges in the case.

The six-count indictment returned by a federal grand jury in San Francisco and released by the Justice Department in Washington stems from allegations that the unit of Houston-based Reliant, Reliant Energy Services Inc., illegally manipulated prices during June 2000 by shutting down four of its five power plants during a two-day period to create a phony shortage.

The price of electricity rose through the remainder of the week after that action, according to the indictment. Artificially inflated spot prices were then posted for market participants throughout California, including Pacific Gas & Electric Co. in San Francisco.

Once those prices were inflated, the indictment says Reliant Energy Services then sold power at the higher prices, costing electricity purchasers some $32 million in overpayments. The indictment says the intent was to reverse Reliant's losing financial position due to previously low electricity prices.
(snip/...)

http://www.dailyherald.com/business/business_story.asp?intid=3808656

[joeunderdog]

1. Next will be a conviction and a $38 fine.

The Governator will make sure everyone makes nice with his backer$.

[Moderator]

2. Please discuss here

http://www.democraticunderground.com/discuss/duboard.php?az=show_topic&forum=102&topic_id=473571